Final answer:
The answer is Market segmentation, which means directing a company's efforts to specific customer groups. Product differentiation is an action to make products seem different, but it's not the defined term. Focusing on core competencies often leads to more successful product differentiation and market segmentation strategies.
Step-by-step explanation:
This involves directing a company's efforts towards serving one or more groups of customers sharing common needs or characteristics.
Product differentiation is closely related but distinct; it involves any action that firms take to make consumers perceive their products as different from their competitors'. Firms can create differentiated products through various means, like altering physical aspects, changing the location from which the product is sold, modifying intangible aspects, and influencing consumer perceptions.
In the realm of business strategy, focusing on core competencies—the areas where a business excels and can outperform competitors—often leads to greater success than attempting to offer a wide range of products. This strategic focus allows a company to serve its target market segments more effectively.