Final answer:
Market segmentation is the process of categorizing customers into groups with similar needs, wants, and characteristics, and the statement is true. It can be based on demographic, geographic, psychographic, and behavioral factors, helping businesses to tailor their marketing strategies effectively.
Step-by-step explanation:
True: Market segmentation is indeed the process of dividing the market into distinct groups of customers based on their needs, wants, and characteristics. This strategy allows businesses to target different segments with specific marketing mixes tailored to meet the unique demands of each group. By doing so, companies can create more effective marketing campaigns, develop better product offerings, and improve overall customer satisfaction.
There are several bases on which market segmentation can be done, including but not limited to demographic, geographic, psychographic, and behavioral segmentation. Demographic segmentation divides the market based on variables like age, gender, income, education, and family size. Geographic segmentation involves segmenting the market based on location such as region, city, or country. Psychographic segmentation considers the lifestyle, values, and personality of consumers. Lastly, behavioral segmentation is based on user behavior, including usage rate, brand loyalty, and benefit sought.
Each of these segments helps businesses to focus their marketing efforts more precisely, which can lead to a higher return on investment and can help them to stand out in competitive markets.