A customer segment refers to a specific group of consumers who share similar characteristics, needs, or behaviors. Businesses identify these segments to tailor their products, services, and marketing strategies effectively. By understanding the unique preferences of each segment, companies can enhance customer satisfaction and loyalty. Segmentation can be based on various factors, including demographics, psychographics, geography, and buying behavior. For example, a company might target young professionals in urban areas or families looking for budget-friendly options. This focused approach helps businesses allocate resources efficiently and improve overall performance.