Final answer:
Market segmentation requires segments to be distinguishable and responsive to specific marketing strategies, known as product differentiation. It helps create monopolistic competition and can lead to oligopoly based on brand identity.
Step-by-step explanation:
The segmentation requirement that segments should be easy to distinguish from each other and should respond differently to other market segments in terms of marketing strategies refers to the need for product differentiation.
This is a critical concept for firms in competitive markets where the perceived demand for a product influences how it competes. Product differentiation is any action firms take to make consumers perceive their products as different from competitors'.
This differentiation creates monopolistic competition and can even influence the structure of the market, potentially leading to an oligopoly if brand recognition and marketing play a significant role.
Variety in styles, flavors, locations, and characteristics contributes to product differentiation because it enables consumers to recognize important differences and choose based on personal preferences or needs.
This requirement of differentiation helps companies target specific segments effectively, allowing them to employ unique marketing strategies that resonate with those specific groups.