Customer segmentation is a process used for customer mapping which enables marketers to create groups of customers who have similar interests, age, gender, location, purchasing power etc. This helps marketers create targeted product or services for each group of customers along with customized marketing/promotional campaigns.
Marketers who can identify under-served segments can develop unique products/services for that segment, thus taking a lead in comparison to their competitors. This focus of each group of customers can help marketers develop pricing strategies for maximum effectiveness for both high and low profit consumers. Organizations can also use customer segmentation to allocate their resources into various sections like product/service development, marketing, promotion, distribution and after sales support.
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