Final answer:
Nested approach is a market segmentation strategy that involves using multiple levels of segmentation to divide a target market. Understanding this model helps industrial organizations effectively segment their markets based on various criteria.
Step-by-step explanation:
Nested approach is a market segmentation strategy in which multiple levels of segmentation are used to further divide a target market. By understanding this model, an industrial organization can effectively segment its markets based on various criteria such as demographics, psychographics, behavior, and geography.
For example, a car manufacturer may use a nested approach to segment its markets. At the broadest level, they may divide the market into segments based on geographical regions. Then, within each region, they may further divide the market based on demographics such as age, income, and occupation. This allows the manufacturer to tailor their marketing strategies and products to different segments of customers.
Understanding the nested approach model helps industrial organizations to identify and target specific market segments more effectively. It allows them to allocate their resources efficiently and create customized marketing strategies that resonate with different customer segments.