MARKET SEGMENTATION The basic goal of market segmentation (subdividing a market) is to determine the target market. Because some markets are so complex and composed of people with different needs and preferences, markets are typically subdivided so that promotional efforts can be customized-tailored to fit the particular submarket or segment. For most products, the total potential market is too diverse or heterogeneous to be treated as a single market. To solve this problem, markets are divided into submarkets called market segments. Market segmentation is defined as the process of dividing a large market into smaller segments of consumers who have similar characteristics, behaviors, wants, or needs. The resulting segments are homogenous with respect to characteristics that are most vital to the marketing efforts. That means that members of the segment have enough in common with each other that customized messages can be more effective. This segmentation may be made based on gender, age group, purchase occasion, or benefits sought. Or they may be segmented strictly according to their needs or preferences for particular products. The Internet has revolutionized the way
markets are segmented because so much more data are available on consumers’ interests and purchase behavior.