Certified Nonprofit Professional Practice Exam

What is the process of dividing a nonprofit organization's stakeholder groups into homogeneous subsets for marketing purposes called?

1. Target marketing

2. Segmentation

3. Audience profiling

4. Market classification

The correct answer is: Segmentation

The process of dividing a nonprofit organization's stakeholder groups into homogeneous subsets for marketing purposes is called segmentation. This is a crucial strategy as it allows organizations to better understand the distinct needs, motivations, and behaviors of different groups within their broader audience. By identifying these subsets, nonprofits can develop tailored marketing strategies that resonate more deeply with each group. Segmentation enhances communication effectiveness, enabling targeted messaging that addresses the specific interests and concerns of each subset. This, in turn, leads to improved engagement and a stronger connection with stakeholders, which is vital for building support and achieving organizational goals. While other terms like target marketing, audience profiling, and market classification may also involve categorization, they typically refer to specific applications or contexts within marketing rather than the foundational process of dividing the audience into meaningful groups.