Market Segmentation

The concept of market segmentation is based on the fact that the markets are not homogeneous but are heterogeneous. Market represents a group of customer having common characteristics but two customers are never common in their nature, habits, hobbies income and purchasing techniques. They differ in their behavior and buying decisions. The main purpose of market segmentation is to set up separate programmes or strategies to all segments so that maximum satisfaction to consumers of different segments may be provided. It is used to increase sales for particular segment.




Market Segmentation is the process of dividing an entire market into different consumer segments in which each segment has a common characteristic such as needs or behavior.

It is a strategy of “divide and conquer”. In other words, it is a marketing strategy that divides a broad target market into subsets of consumers, businesses, or countries that have, or are perceived to have, common needs, interests, and priorities and then designing and implementing strategies to target them.  The term ‘Market Segmentation’ has been defined by several authors as follows:

  • Philip Kotler: “Market Segmentation is the sub-dividing of a market into homogeneous subsets of customers, where any subset may conceivably be selected on a market target to be reached with a distinct marketing mix.”
  • William J. Stanton: “Market Segmentation consists of taking the total heterogeneous market for a product and dividing into several sub-markets or segments, each of which tends to be homogeneous in all significant aspects.”
  • Webster: “Market Segmentation is a method for achieving maximum market response from limited marketing resources by recognizing differences in the response characteristics of various parts of the market. It is a strategy of divide and conquer that adjusts marketing strategy to inherent differences in buyer behaviors.”

Objective of Market Segmentation

The objective of market segmentation is to determine the differences among the purchasers of a product and to divide these purchasers on the basis of these differences into several groups so that different marketing programmes, policies and strategies may be prepared for every group of consumers and maximum satisfaction may be provided to maximum consumers and the purpose of earning of maximum profits may be achieved. The purpose of marketing segmentation has been defined by several authors as follows:

  • Prof Esmond Pearce: “The purpose of market segmentation is to determine the difference among the purchasers which may affect the choice of market area or marketing methods.”
  • Philip Kotler: “The purpose of market segmentation is to determine difference among the buyers which may be consequential in choosing among them or marketing to them.”