Explain the relationship between market segmentation and strategic expansion.

Market segmentation allows companies to divide their audience into distinct groups based on specific characteristics:

• Targeted Strategy: Each segment receives customized offerings, boosting satisfaction.

• Efficient Resource Use: Focus marketing and R&D on high-potential groups.

• Better Positioning: Tailor brand messaging to specific demographics or behaviors.

• Product Diversification: Create variations of a product for different market needs.

• Risk Reduction: Spreading focus across segments can protect against downturns in any one area.

Example: Nike segments its market by sport, gender, and performance level—allowing precise expansion in categories like running, basketball, and lifestyle wear.

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