Final answer:
The first major marketing decision a retailer must make is segmentation, which allows understanding of different customer groups before targeting and positioning their products in the market.
Step-by-step explanation:
The first major marketing decision that a retailer must take is likely segmentation. Before a business can begin to target specific customers or decide how to position itself in the market, it must first segment the market to understand the diverse customer groups that exist. This process involves dividing the broader market into smaller groups with similar needs or characteristics. Once segmentation is completed, the retailer can then decide which segment(s) to target and how to position and differentiate their product accordingly. Product differentiation is indeed a crucial step, but it typically comes after segmentation when a retailer has decided whom to serve. Product differentiation refers to any action that firms do to make consumers think their products are different from their competitors'.