Which term refers to the division of a market into different customer segments?

• A. Opportunity cost
• B. Price discrimination
• C. Product differentiation
• D. Market segmentation

Answer: (D)

Verified step by step guidance

1. Understand the concept of dividing a market into different customer segments based on characteristics such as preferences, demographics, or behaviors.
2. Recall that 'Opportunity cost' refers to the value of the next best alternative foregone, which is unrelated to dividing markets.
3. Recognize that 'Price discrimination' involves charging different prices to different customers for the same product, but it does not necessarily involve segmenting the market itself.
4. Know that 'Product differentiation' means making a product distinct from competitors' products, which is different from dividing the market into segments.
5. Identify that the term 'Market segmentation' specifically refers to the process of dividing a market into distinct groups of buyers with different needs or characteristics.