Describe how businesses approach segmentation in market. Why market segmentation could help businesses to achieve the goals of their strategies? What approaches can be used to segment the market? How can this lead to competitive advantage?
Market segmentation is the activity of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers based on some type of shared characteristics. There are four types of market segmentation and they include demographic segmentation, psychographic segmentation and behavioral segmentation. Market segmentation is good because it enhances profits for business, retain more customers, targets marketing communication and facilitates more opportunities for growth.