What process divides a broad market into smaller subsets of consumers with similar needs and wants?

The process that divides a broad market into smaller subsets of consumers with similar needs and wants is known as market segmentation. This strategic approach allows companies to identify specific groups within the larger market, making it possible to tailor products, services, and marketing campaigns to better meet the distinct preferences and requirements of each segment.

By grouping consumers based on shared characteristics such as demographics, psychographics, behavior, or needs, businesses can effectively address the unique desires of different segments, thus enhancing customer satisfaction and loyalty. Market segmentation forms the foundation for more focused marketing strategies and is crucial for optimizing resource allocation and improving overall marketing effectiveness.

In contrast, market targeting refers to selecting specific segments to focus on, market analysis involves examining market conditions and trends, and market positioning relates to how a product or service is perceived relative to competitors in the minds of consumers. Each of these processes is interconnected but serves different purposes within the overall marketing strategy.