GCSE Business 2025 – 400 Free Practice Questions to Pass the Exam

Market segmentation is the process of dividing a market into distinct groups of buyers based on different needs or characteristics. This approach allows businesses to tailor their products, services, and marketing strategies to meet the specific preferences of each segment. By understanding the different segments within a market, companies can focus their resources more effectively, catering to the unique demands of each group, which can lead to improved customer satisfaction and increased sales.

When a market is segmented, businesses can identify which groups of customers are most likely to respond positively to their offerings. This targeted strategy facilitates not only a more efficient allocation of marketing budgets but also fosters stronger connections with customers, as products and messaging can be adapted to their specific needs and preferences. Overall, market segmentation is a foundational concept in marketing that enhances a company's ability to compete effectively in its chosen markets.