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Segmentation is creating customer clusters based on shared traits, such as behaviour and consumption patterns. This helps businesses to better understand and target their customers with more personalised marketing messages, products, and services.

Segmentation can be based on a wide range of criteria, such as demographics (age, gender, income), psychographics (lifestyle, values, personality), and behaviour (purchase history, website activity). By segmenting their target audience, businesses can tailor their marketing efforts to meet the specific needs and preferences of each group, resulting in higher engagement, conversion rates, and customer loyalty.