Describe how companies approach market segmentation and why market segmentation might be an attractive business strategy. Why do companies segment the market? What approaches can be used to segment the market? How can this lead to competitive advantage? Market segmentation is attractive to businesses because they can group customers based on their needs so that they can serve them better and add more value than their competitors. There are several ways to approach business segmentation, including standardization, segmentation, and focus strategy. The standardization strategy consists of manufacturing a product that serves everyone, it is generally a mass product. It is usually associated with low-cost products and services. It follows the low cost – high volume strategy. It attempts to achieve economies of scale through high volume demands. Segmentation strategy involves creating a different product for each market segment. For example, in the HVAC industry, there may be different product variations to serve cold and hot regions, industrial markets, light commercial and residential markets. This involves custom features and functions and leverages that value to generate a higher price. With this approach and strategy, it is difficult to achieve economies of scale and keep production and delivery costs low. Concentration strategy involves creating niche products aimed at a particular application or a specific market segment. This strategy has a higher cost structure because it involves new technologies, innovation and R&D. It is difficult to achieve economies of scale with this strategy because