What is the process of dividing a market into subgroups with distinct needs called?

• A. Targeting
• B. Positioning
• C. Market Research
• D. Segmentation

Answer: (D)

Dividing a market into subgroups with distinct needs is segmentation. It focuses on identifying groups that differ in characteristics, preferences, or behavior so you can design products and marketing messages that fit each group. This matters because not all customers have the same requirements, so tailoring offerings increases relevance and effectiveness. After segmentation, a firm chooses which segments to target and then positions its product in the minds of those customers. Market research is the data-gathering step used to inform segmentation decisions, helping to uncover differences among potential groups.