The goal of market segmentation is to:

• A. set a single price for all consumers in the market
• B. eliminate competition by merging all firms in a market
• C. identify and target specific groups of consumers with similar needs or characteristics
• D. maximize total market output regardless of consumer preferences

Answer: (C)

Verified step by step guidance

1. Understand the concept of market segmentation: it involves dividing a broad consumer or business market into sub-groups of consumers based on shared characteristics or needs.
2. Recognize that the purpose of market segmentation is to allow firms to tailor their marketing strategies and products to specific groups, rather than treating the market as homogeneous.
3. Eliminate options that do not align with this purpose, such as setting a single price for all consumers or eliminating competition by merging firms, as these do not reflect segmentation goals.
4. Focus on the option that highlights identifying and targeting specific groups of consumers with similar needs or characteristics, which aligns with the definition and purpose of market segmentation.
5. Conclude that the goal of market segmentation is to better meet consumer preferences by customizing marketing efforts, rather than maximizing total market output without regard to consumer differences.