Market segmentation is the first step in defining and selecting a target market to pursue. Basically, market segmentation is the process of splitting an overall market into two or more groups of consumers. Each group (or the market segment) should be similar in terms of certain characteristics or product needs.
“Market segmentation is based upon developments on the demand side of the market and represents a rational and more precise adjustment of product and marketing effort to consumer or user requirements.” (Smith, 1956)
“Market segmentation is the process of splitting customers, or potential customers, in a market into different groups, or segments, within which customers share a similar level of interest in the same. or comparable. set of needs satisfied by a distinct marketing proposition” (McDonald & Dunbar, 2004)
“Market segmentation involves aggregating, prospective buyers into groups that (1) have common needs and (2) will respond similarly to a market action.” (Kerin, 2011)