A tag is used to label users with different elements of the app's business logic.
For example, if your app is intended for pet owners, you can define the different pets as tags ("Dog", "Cat", “Parrot” etc.) and then label users with different tags, depending on the pets they own.
Tags are a useful way to create Segments: Groups of devices that share the same parameters (in this case, the tag values).
You can then send Push notifications to the relevant segments (for example, one notification for dog owners and another for cat owners).
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