Market segmentation describes the division of an overall market for one activity type into several submarkets (segments). The segments should be as clear as possible from each other and be homogenous in themselves.
This means that the overall market is divided into homogeneous groups or "segments" according to specific criteria. Outline criteria can be: buyer groups, sales channels, solution technologies, products/services ... A segment should be homogeneous in itself. The main purpose of the market segmentation is to uncover differences between customers in order to draw conclusions for segment-specific marketing programs. Different criteria can be created for this. For example, customer groups can be subdivided according to sociographic factors (place of residence, age, gender, marital status, household size, education, occupation, income, etc.), psychographic (interest, values, norms) and behavioral factors.
The goal of market segmentation is to identify the most attractive segments with the highest profit potential and to develop and implement strategies that are specifically tailored to the respective needs and behaviors of these segments.