Segmentation is essentially the identification of subsets of buyers within a market who share similar needs and who demonstrate similar buyer behavior. The world is made up from billions of buyers with their own sets of needs and behavior.
Segmentation aims to match groups of purchasers with the same set of needs and buyer behavior.
Such a group is known as a 'segment'. Segmentation is a form of critical evaluation rather than a prescribed process or system, and hence no two markets are defined and segmented in the same way. The are many ways that a segment can be considered. A company will evaluate each segment based upon potential business success. The Segmentation Matrix Business Battlemap is a useful segmentation tool.