What is Market Segmentation?

Apart from the highly specialized companies which deal with very few customers, companies have to find their buyers. Because Markets consist of buyers, and buyers differ in one or more ways. They may differ in their wants, resources, locations, buying attitudes and buying practices. This means that there must be some way of splitting up the overall market into smaller, and into more manageable portions. This is done by segmentation. Through market segmentation, companies divide large, heterogeneous markets into smaller segments that can be reached more efficiently and effectively with products and services that match their unique needs.



The concept of market segment is based on the fact that the market of commodities are not homogeneous but they are heterogeneous. Market represent a group of customer having common characteristics but two customer are never common in their nature, habits, hobbies income and purchasing techniques.

And According to Philip Kotler, "Market segmentation is
sub-dividing a market into distinct and homogeneous subgroups of customers, where any group can conceivably be selected as a target market to be met with distinct marketing mix."

              Market Segmentation is a method of "dividing a market (Large) into smaller groupings of consumers or organisations in which each segment has a common characteristic such as needs or behavior." and its objective is to design a marketing mix that precisely matches the expectation of customers in the targeted segment.

Segmentation is the single most important aspect of promotion, perhaps even of marketing today. It is the foundation which enables promotional campaigns to be constructed effectively and efficiently.

Marketing is consumer centered. It is marketing's job to identify specific consumer needs, and to satisfy those needs through the creation of a "package", making it available to the identified consumers and making the same consumers (and associated customers) aware that the package exists.

Obviously it is wasteful to make a product available when there is no consumer need; equally obviously there is no point in advertising a service in media that are not seen by the target consumers/customers.

It follows that it is necessary to examine a potential market to identify the particular parts of it that share a common need, have a similar psychological make-up and can be reached with both promotion and product.

When this is done you have segmented the market.

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