Final answer:
The use of product knowledge in market segmentation based on consumer awareness is true. Product knowledge is essential for aligning marketing strategies with customer awareness levels and ensuring market transactions are efficient and well-informed.
Step-by-step explanation:
When considering the question of whether the variable used to choose a marketing approach is product knowledge when market segmentation is based on how aware and informed the consumers are, the answer is True. In market segmentation that focuses on customer awareness and information levels, product knowledge becomes a critical factor. Companies tailor their marketing strategies to various segments according to the customers' understanding and familiarity with the products.
For a market to reach equilibrium, it is essential for both sellers and buyers to have full information regarding the product's price and quality. A lack of this information can lead to inefficient market transactions or poor decision-making, as parties are less than 100% certain about the qualities of what they are buying or selling. Overcoming these gaps of knowledge through marketing efforts that educate and inform can be very influential for the success of transactions, thus confirming the integral role of product knowledge in market segmentation based on consumer awareness.