The process of defining and subdividing a large homogenous market into clearly identifiable segments having similar needs, wants, or demand characteristics. Its objective is to design a marketing mix that precisely matches the expectations of customers in the targeted segment.
Few companies are big enough to supply the needs of an entire market; most must breakdown the total demand into segments and choose those that the company is best equipped to handle.
Four basic factors that affect market segmentation are
- clear identification of the segment,
- measurability of its effective size,
- its accessibility through promotional efforts, and
- its appropriateness to the policies and resources of the company.
Use market segmentation in a sentence