Market Segmentation

Markets consist of buyers, and buyers are different in one or more ways. They can differ in their desires, locations, buying attitudes, resources, and buying practices. Through market segmentation, companies divide big, heterogeneous markets into minor segments that may be reached more efficiently and effectively with services and products that match their exclusive needs. Today Companies recognize that they cannot appeal to all of the buyers in the marketplace, or at least not to all of the buyers in the similar way. Buyers are too numerous, too widely scattered, and too varied in their requirements and buying practices.  Moreover,  the  companies  themselves  differ  widely  in  their  abilities  to  serve different segments of the market. Instead than trying to compete in complete market, sometimes against superior competitors, each company ought to identify the parts of the market that it may serve best and most profitably.

Therefore, most of the companies are more selective regarding the customers with whom they desire to connect. Most have moved away from mass marketing & toward market segmentation and targeting- recognizing market segments, choosing one or more of them, and developing products and marketing programs tailored to each.  Instead of scattering their marketing efforts firms are focusing on the buyers who have bigger interest in the values they create best.