Which term describes the process of dividing a market into groups with common needs?

• A. Positioning
• B. Branding
• C. Segmentation
• D. Targeting

Answer: (C)

Segmentation focuses on dividing a market into groups that share common needs or characteristics so a company can tailor its offerings to each group. This is the best answer because it directly describes creating distinct, purpose-driven groups that a business can address with targeted products and messages, which is the starting point for a effective marketing plan. After segmentation, the next steps are targeting and positioning: targeting involves choosing which of these segments to pursue, and positioning is about how the product is perceived within the minds of those chosen segments. By contrast, branding is about the overall identity and promise of the product, not the process of dividing the market, and positioning is about how you frame the product for a specific segment once you’ve identified them. For example, a brand might segment by age and lifestyle, target a particular group, and then position a product as the best fit for that group’s needs.