Question

A firm that wants to develop a deeper understanding of its customers may optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups. This is ________.

1) Market segmentation
2) Product differentiation
3) Cost leadership
4) Diversification

Answer 1

Market segmentation is a strategy that helps firms develop a deeper understanding of their customers and optimize profitability, revenue, and customer satisfaction.

Step-by-step explanation:

The subject of this question is Business, as it relates to a firm's strategy to understand its customers.

The firm can optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups. This strategy is called market segmentation, which involves dividing the target market into smaller, distinct segments based on shared characteristics such as demographics, behaviors, or needs.

By tailoring their products, marketing campaigns, and services to these specific customer segments, the firm can better meet their needs and preferences, ultimately driving higher profitability, revenue, and customer satisfaction.