Explain the necessary requirements for effective market segmentation, including the criteria that should be used when determining which segments a business should pursue. Discuss the benefits of market segmentation and provide two examples to illustrate your ideas. In replies to peers, provide additional examples that support the ideas that were presented.

Explanation:

Market segmentation can be defined as the research used by a company to divide its customers into groups according to their characteristics, such as income, age, preferences, behaviors, etc. The purpose of market segmentation is to use the different segments to carry out advertising campaigns and optimize products and services for different customers.

The necessary requirements for an effective market segmentation, is that the segmentation is:

Measurable:  The segmentation variables must be related to the purchase of a product.

Accessible: The segments of characteristics and behaviors should help the organization to identify the best way to reach its potential customers.

Substantial: The identified segment must be able to consume its products.

Action: The segment should show a positive response when exposed to the offer offered in the market.

Two examples of companies that used market segmentation to achieve strategic advantages are the beauty and clothing sector, which are able to direct their business strategy to meet the specific needs of each market segment and thus achieve better results in relation to the positioning of branding, creating value, reducing unnecessary costs, increasing profitability, etc.