Marketers usually divide the heterogeneous market for any product into segments with relatively more homogeneous characteristics, since this helps in evolving effective marketing programme, which in turn, will help proper utilization of that market.
This process of disaggregating a market into a number of sub-markets is known as market segmentation.
In a nutshell, market segmentation rests on the recognition that
- Any market is made up of several sub-markets or sub-groups of consumers, distinguished from one another by their varying needs and buying behaviour.
- It is feasible to disaggregate the consumers into segments in such a manner that in need, characteristics and buying behaviour, the members would vary significantly among segments, but would be homogeneous within each segment.