Definition:

Market Segmentation can be defined as the process of dividing a market into distinct subsets of
consumers with common needs or characteristics and selecting one or more segments to target
with a distinct marketing mix. Segmentation studies are designed to discover the needs and wants
of specific groups of consumers, so that specified goods and services can be developed and
promoted to satisfy each group’s needs.

Earlier Mass Marketing was done – that is offering the same product and marketing mix to all
consumers. In Mass Marketing, the seller engages in the mass production, mass distribution
and mass promotion for one product for all the buyers.

Need of Segmentation:
Consumer needs differs
Differentiation helps products compete
Segmentation helps identify media

Benefits of Segmentation:

Both sides of the market place, consumer and the marketer benefit from market segmentation.
- Consumers receive products targeted to their specific needs.
- Marketers are able to offer differentiated products, increasing profits, market share, etc.
- Retailers, industrial manufacturers, and the media have all benefited from market
segmentation.
Retailers benefit from market segmentation. One company, such as Gap, is able to deliver their
goods through a diversity of stores, Gap, Super Gap, Gap Shoe, etc., depending on the segment
and product line.

Industrial, not-for-profit, and even the media also use market segmentation.
More and more businesses today are using database marketing programs to find out who their
best customers are, and these firms will then divide their customer base into segments.