Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common characteristics, needs and priorities and then implementing strategies to target their needs and desires using product development and adjustment strategies and media channels to best reach them.

To develop an effective segmentation strategy, a company must study actual and potential customers, but also competitors and their strategies as well. In order to learn how companies do it, review the PRIZM Premier Segmentation Model explained in the textbook. Claritas originally developed the model; for many years it was marketed by A.C. Nielsen, a leading marketing research company. To learn more about the model, we would like you to review the following sources:

• Claritas
• A.C. Nielsen

Now, we would like you to think about some particular geographic area in the U.S. or abroad (for example, a particular zip code). If you as a marketer obtained socio-economic characteristics of your area and PRIZM profiles of the most typical segments, what would it tell you about the area? Can you think about businesses that can be more successful than others when selling their products (services) to those segments? Why? How can the PRIZM Segmentation (or any other similar) tool be used for developing a sound segmentation strategy for businesses?