What does market segmentation involve?

Market segmentation involves dividing a broader target market into smaller categories that share similar characteristics or needs. This process allows businesses to tailor their marketing strategies, products, and services to specific groups, ensuring that they meet the distinct needs and preferences of each segment. By understanding the different segments within a market, companies can develop more effective marketing campaigns, enhance customer satisfaction, and increase their competitiveness.

Segmenting a market can be done based on various criteria, such as demographics, psychographics, geographical location, and behavioral factors. This approach helps businesses to allocate resources more efficiently and create more targeted marketing messages, ultimately leading to higher conversion rates and customer loyalty.

In contrast, the other options do not align with the concept of market segmentation. Creating a universal product for all customers does not recognize the diversity in customer needs, while determining pricing strategies and promoting products through digital marketing are essential marketing functions but are not directly related to the act of segmenting a market.