Market segmentation is the process of dividing a broad market, normally consisting of existing and potential customers, into subsets of consumers (known as segments), that have, or are perceived to have, common needs, interests, and priorities. The aim of segmentation is to identify high yield segments - that is, those segments that are likely to be the most profitable or that have growth potential - so that these can be selected for special attention (i.e. target markets). There are many ways to segment a market. Business-to-business sellers might segment the market into different types of businesses, or countries. While marketers of consumer goods might segment the market into demographic segments, lifestyle segments, behavioral segments or any other meaningful segment. Market segmentation assumes that different market segments require different marketing programs - that is different offers, prices, promotion, distribution or some combination of marketing variables. Market segmentation is designed to identify the most profitable segments and profile target segments. Insights from segmentation analysis are subsequently used to support marketing strategy development and planning. Many marketers use the S-T-P approach; Segmentation→ Targeting → Positioning to provide the framework for marketing planning objectives. That, is a market is segmented, one or more segments are selected for targeting, and products or services are positioned in a way that resonates with the target markets. Depending on company philosophy, resources, product type or market characteristics, a businesses may develop an undifferentiated approach or differentiated approach. In an undifferentiated approach (also known as mass marketing), the marketer ignores segmentation and develops a product that meets the needs of the largest number of buyers. In a differentiated approach the firm targets one or more market segments, and develops separate offers for each segment. In consumer marketing, it is difficult to find examples of undifferentiated approaches. Even goods such as salt and sugar, which were once treated as commodities, are now highly differentiated. Consumers can purchase a variety of salt products; cooking salt, table salt, sea-salt, rock salt, kosher salt, mineral salt, herbal or vegetable salts, iodized salt, salt substitutes and if that is not enough choice, at the brand level, gourmet cooks are likely to make a major distinction between Maldon salt and other competing brands.
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