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Market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers into sub-groups of consumers (known as segments) based on some type of shared characteristics such as common needs; common interests, similar lifestyles or even similar demographic profiles. The overall aim of market segmentation is to identify high yield segments – that is, those segments that are likely to be the most profitable or that have growth potential so that these can be selected for special attention i.e become target markets).

In this step marketers are looking for a means of achieving similarity within the segments and differences between segments. The bases are as follows;


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