Introducing customer segmentation

In this section, we will cover customer segmentation in detail. Initially, I provided just a brief introduction of customer segmentation so that you could understand the term a bit. Here, we will understand a lot more about customer segmentation, which will help us further when we build the customer segmentation analysis.

As mentioned earlier, customer segmentation is a process where we divide the consumer base of the company into subgroups. We need to generate the subgroups by using some specific characteristics so that the company sells more products with less marketing expenditure. Before moving forward, we need to understand the basics, for example, what do I mean by customer base? What do I mean by segment? How do we generate the consumer subgroup? What are the characteristics that we consider while we are segmenting the consumers? Let's answers these questions one by one.

Basically, the consumer base of any company consists of two types of consumers...