ABSTRACT
This chapter describes the strategic importance of market segmentation. It discusses the importance of market definition and structure. The chapter also discusses the objectives of segmentation, the bases for segmenting markets, and the implementation of a segmentation strategy. Market definition and market segmentation are concepts of strategic importance to organizations and widely accepted by both academics and practitioners. According to K. Sausen, T. Tomczak, and A. Herrmann, strategic market segmentation represents the strategic intent of market segmentation to ensure that the objective of market segmentation is consistent with the firm's overall business and marketing strategy. At the same time, it ensures that a firm's operational capabilities in marketing, sales and market research can fulfil the strategic intent of market segmentation. Therefore strategic market segmentation can be considered as the glue between a firm's marketing strategy and operational segmentation. It ensures a fit between segmentation objectives and a company's competencies, facilitating a successful implementation of market segmentation.
