Definition and Analysis of Market Segmentation

Author: Haris Giannopoulos

The introduction of the term ‘‘market segmentation’’ was first cited by Wendell Smith in 1956. Smith defined market segmentation as ‘‘ viewing a heterogeneous market as a number of smaller homogeneous markets, in response to differing preferences, attributable to the desires of consumers for more precise satisfaction on their varying wants’’( Smith, 1956).

While there have been numerous attempts to redefine the concept, Smith’s original definition remains appealing. For example there is a clear connection between the words of Smith and those of Jobber after 50 years. As Jobber(2004), states ‘‘ to implement the marketing concept and successfully satisfy customer needs, different product and service offerings must be made to the diverse customer groups that typically comprise a
market.’’  The technique that marketers use in order to simplify the diverse nature of markets into sub-markets or segments is called ‘‘Market Segmentation’’. Jobber(2004),
defines market segmentation as ‘‘the identification of individuals or organizations with similar characteristics that have significant implications for the determination of marketing strategy.’’

Furthermore, segmentation has been defined by Kotler as “the subdividing of a market into distinct subsets of customers, where any subset may conceivably be selected as a target market to be reached with a distinct marketing mix’’ (Kotler, 1980).

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