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MARKET SEGMENTATION:
In simple terms market segmentation may be defined as a process of dividing a market into different sub-markets on the basis of some definite criteria.

ADVANTAGES OF MARKET SEGMENTATION :
(1) Significant Increase in Sales:
Naturally, there will be a significant increase in sales, if needs and preferences of a particular group of buyers are studied systematically and a sales promotion campaign appealing to them is forcefully launched. A producer who sells in a general market to all groups of buyers cannot influence them so successully and therefore his market is bound to be limited.
(2) Proper Market Strategy:
If a limited group of buyers is to be served, it is possible to frame a suitable advertisement and publicity to appeal to the group in question most effectively. For example, the companies making jeans pants can attract the youth and the adolescent through impressing upon them the charm of current fashions.
(3) Production According to Needs:
The needs of the distinct group of buyers can be determined and only these products can be produced which can meet those needs effectively. Thus, the modern concept of marketing can materialise.
(4) Specialisation in Management:
The management of different market segments can be entrusted to different sales managers and advantages of specialisation can be obtained. Each sales manager, being familiar with the peculiarities and preferences of the group of customers assigned to him, can satisfy their needs most efficiently.
(5) Information on Market Opportunities:
On the basis of the knowledge of distinct characteristics of each group of customers, it can be easily judged whether there is any possibility of introducing a new product and risks of business can be reduced. Moreover, through a careful study of different market segments, information can be obtained about market segments in which there are profitable opportunities of sales of the existing product.
(6) Adjustments to Changing Circumstances: When a producer produces for one or two market segments only, he can be in close contact with customers therein. He can be well-informed of the change in their needs and preferences. Therefore, he can immediately change production and sales policies in accordance with the change in market conditions. The result is that he can successfully stand in competition against the rival firms.
(7) Beneficial to Customers:
Each group of customer gets a product according to its needs. In addition, the average cost of production declines due to the increase in efficiency and also due to the economies of large scale production. The customers also get the benefit in the form of lower prices.
(8) Beneficial to Society:
The producers are in constant search for new products which can better satisfy the needs of a limited group of buyers. Thus, new products are continuously produced and put in the markets, so that buyers can enjoy a high and varied standard of living.
(9) Better Use of Resources:
In underdeveloped countries, there is a shortage of capital and natural resources, Hence it is in the interest of the nation that they are efficiently utilised. Market segmentation helps in the efficient utilisation of available resources because production takes place in conformity with the needs of the people in each market segment.
(10) Beneficial to Small Firms:
Small firms can concentrate on the production and sale of goods meant for only a distinct small group of buyers and stand in competition against the big firms. This cannot be possible in the absence of market segmentation because small firms with limited resources cannot be expected to satisfy the whole multitude of buyers in a large market.

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