Market Segmentation

Market segmentation — the disaggregation of markets into clusters of buyers with similar tastes, preferences and purchasing behaviour — is now firmly established in marketing theory and practice (Wind 1978). It is widely regarded as an essential component of the process of marketing strategy formulation, since it is the means of identifying and defining customer targets. In this way, market segmentation assists in structuring and focusing an organisation’s marketing management activities. It is therefore not surprising that it ‘is one of the most talked about and acted upon concepts in marketing’ (Green and Kreiger, 1991). It can be regarded as a compromise between the convenience of mass marketing and the costly and generally impractical approach of marketing offerings suited to the idiosyncrasies of each individual buyer.