Market segmentation is the process by which a diverse market is divided into a number of distinct sub-markets (Walker and Mullins). The objective is to identify groups of customers with similar needs and characteristics so that they can be served effectively (Jobber, 2007). By grouping together with similar needs, market segmentation provides a commercially viable method of serving these customers which enables consumer needs to be more closely matched. Consequently, firms and organizations can improve their marketing effort by developing specific products or services for particular segments.
Four advantages are visible for us. Market segmentation provides the basis for the selection of target markets (Jobber, 2007). A target market can be seen as a chosen segment of market that a company has decided to serve. Because customers in the target market segment have similar needs and characteristics, understanding of its customers will be improved so that a single marketing mix strategy can be developed to match those requirements. For example, the success of Carphone Warehouse, which supplies mobile phones, was originally based on the founder Charles Dunstone’s realization. The main suppliers were targeting large corporate clients (顾客). His vision was to be the first to allow customers to visit a shop and see what mobile phones were available. By providing selected offerings for selected groups (target markets) in an effective an efficient way, marketers not only build enhanced customer relationships and improved brand loyalty but