The breaking of market into smaller units consisting of people with similar tastes and behaviour is called:
The breaking of market into smaller units consisting of people with similar tastes and behaviour is called:
Options
Official answer
(c) Segment — Segmentation is the process of dividing a heterogeneous market into smaller, homogeneous units called segments, made up of people with similar tastes, needs, and behaviour.
Marking scheme
- 1.1 mark: Selecting option (c) Segment. No mark for any other option or for writing only 'segmentation' without identifying it as a segment/unit.
Hint
The question asks for the name of the smaller unit created after dividing the market — not the name of the process itself.
Quick oral answer
The correct answer is (c) Segment. A segment is the smaller homogeneous unit formed when a large heterogeneous market is divided on the basis of similar tastes, needs, or behaviour.
Common mistakes
- 1.Selecting 'Positioning' because students recall the STP framework but mix up segmentation (dividing) with positioning (placing a brand image in the consumer's mind).
- 2.Selecting 'All of the above' (option d) without recognising that only the term 'Segment' specifically refers to the smaller homogeneous unit that results from dividing the market.
- 3.Confusing 'segmentation' (the process) with 'segment' (the resulting unit) — the question asks for the name of the smaller unit, not the name of the overall process.
Analysis and explanation
The question asks for the name given to a smaller, homogeneous unit of a larger market — the answer is "segment."
Concept
- A total market is heterogeneous (buyers differ widely in needs, income, tastes).
- Market segmentation is the process of dividing this heterogeneous market into smaller groups.
- Each resulting smaller group of people with similar needs, tastes and behaviour is called a segment.
- Segmentation is Step 1 of the STP framework: Segmentation → Targeting → Positioning.
Common mistakes
- Confusing the process (segmentation) with its output (a segment) — the question specifically asks for the smaller unit, so the answer must be "segment," not "segmentation."
- Naming a basis of segmentation (e.g., "demographic") instead of the term for the resulting group.
Real-world
- A company that skips proper segmentation and markets a luxury product to every income group wastes advertising spend and dilutes its message; precise segmentation lets a brand tailor its marketing mix to each group's needs.
Previously asked
Define market segmentation.
The process of dividing a heterogeneous market into homogeneous sub-groups is called: (a) Targeting (b) Positioning (c) Segmentation (d) Branding
What is the basis of demographic segmentation?
Interesting facts
Coca-Cola operates in over 200 countries and uses geographic and demographic segmentation so precisely that it offers different formulations and pack sizes in different markets — for example, smaller bottles in price-sensitive markets like rural India.
Netflix uses behavioural segmentation powered by algorithms that analyse over 300 billion data events per day to group users into thousands of micro-segments called 'taste communities', tailoring content recommendations for each.
The concept of market segmentation was formally introduced by Wendell R. Smith in his 1956 article in the Journal of Marketing, but businesses had informally practised it for centuries through bespoke tailoring and custom manufacturing.
Question details
Q2 of 31 questions
- Board
- CBSE
- Class
- Class 10
- Subject
- Marketing and Sales
- Year
- 2019
- Section
- Section A
- Marks
- 1
- Type
- MCQ
- Chapter
- Market Segmentation
- Topic
- Segmentation Basics
- Bloom's level
- remember
- Syllabus topic
- Unit 2: Market Segmentation — Concept and Definition of a Market Segment
- Updated
- 2026-02-19
- Author
- Padhantu
- Reviewed by
- Padhantu
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Frequently asked questions
What is market segmentation?
Market segmentation is the process of dividing a large, heterogeneous market into smaller, more homogeneous groups of consumers who share similar needs, characteristics, tastes, or buying behaviour.
What are the main bases for segmenting a market?
Markets can be segmented on the basis of geography (region, climate), demographics (age, gender, income), psychographics (lifestyle, values), and behaviour (usage rate, brand loyalty, occasions).
What is the difference between a market segment and a niche market?
A market segment is a broadly identified sub-group within a larger market, while a niche market is an even more narrowly defined sub-group with a very specific set of needs, usually smaller in size and less competitive.