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Segmentation is a technique by which a market or a set of customers is partitioned to meet a strategic or tactical objective.
Market segmentation can be conducted using a number of approaches including demographic, geographic, attitudinal, psychographic, and behavioral. Customer segmentation is often used for tactical objectives, and is used most frequently in direct marketing.
The underpinnings of market segmentation exist in microeconomic theory that allows optimization of demand by creating oligopolistic conditions. By segmenting the market, a company can develop an offer that is distinct from others tailoring the offering to the needs of a specific group or market segment. By doing this, it offers a value that is so different from competing offers that it creates near monopoly conditions and so it is better equipped to command a higher price or claim superiority in the newly s