Value Chain Glossary: Segment (Market Segmentation)
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Segment (Market Segmentation)
Process of dividing a homogeneous market into groups of consumers having similar wants, needs or demand characteristics. Consumers within market segments have common requirements and present similar benefits and risks for those selling to them. Segmentation can go on to divide the market into distinct groups based on (a) behavioral (b) demographic, (c) psychographic, and (d) geographical differences. Thorough market segmentation helps firms understand their consumer base and better tailor their products and services to meet consumer demand. Information gleaned from market segmentation can also shed light on opportunities for upgrading to meet changing market demand. The more knowledge firms have about the market the better they will be able to compete.
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