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market segmentation

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The division of a market into homogeneous groups of consumers, each of which can be expected to respond to a different marketing mix. There are numerous ways of segmenting markets, the more traditional being by age, sex, family size, income, occupation, and social class; more recently geodemographic segmentation, which identifies housing areas in which people share a common lifestyle and will be more likely to buy certain types of products, has become more popular. Another frequently used method is benefit segmentation. Once a segment has been identified, the marketer can then develop a unique marketing mix to reach it, for example by advertising only in the newspapers read by that market segment. Therefore, to be of practical value a market segment must be large enough to warrant the development costs.

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