The total market for many of the products is not homogeneous but too much heterogeneous because people

have different needs and wants and therefore,

marketer cannot derive maximum benefit from an analysis of marketing as a whole. For example, there may be total market for textiles, electrical appliances,
refrigerators, etc., but within the total for each of these products, there might actually exist many sub-markets which differ virtually from each other.

Under textile markets, in one section of the population, there might be huge demand for cotton textile, in another for synthetic fibre textiles and yet in another
for pure silk garments. This diversity may be due to differences in income of the people, taste, fashion buying habits or motives, etc. Further no two customers
are identical in their demand.

Therefore, to take advantage of this situation, the marketers may divide the total market into smaller groups of consumers on the basis of significant difference
in buyer characteristics or buyer responses to marketing programs.

By tailoring product designs, pricing policies, promotion and distribution channels to meet the needs of these small groups’ marketers often gain a competitive
advantage. This kind of marketing strategy is also consistent with the marketing concept, which requires the identification of the consumer wants and needs
and development of marketing programs to satisfy them.

According to Stanton, “Market segmentation consists of taking the total heterogeneous market for a product and dividing it into several sub-markets or
segments each of which tends to be homogeneous in all significant aspects.”

Market segmentation is the process of dividing a potential market into distinct sub-markets of consumers with common needs and characteristics. Market
segmentation is the starting step in applying the marketing strategy. Once segmentation takes place, the marketer targets the identified customer groups with
proper marketing-mix so as to position the product/band/company as perceived by the target segments.

From the perspective of the marketing manager, market segmentation involves two closely related areas. First, the total market for any product can be sub-
divided or segmented into groups of potential customers who are homogeneous with respect to certain wants or desires. Second, it might be advantageous to
the organisation to serve one or more of these market segments.

Market segments are large identifiable groups like customers interested in personal computer, laptop, tablet, etc. It is possible that a market creates a niche.
Niche is a narrowly defined group of customers that have a distinct and complex set of needs.