Final answer:
Market segmentation is the process of dividing a broad target market into smaller, more homogeneous groups or segments based on certain characteristics. It helps marketers understand their customers better and tailor their marketing strategies accordingly.
Step-by-step explanation:
Market segmentation is the process of dividing a broad target market into smaller, more homogeneous groups or segments based on certain characteristics such as demographics, psychographics, behaviors, or needs. This allows marketers to better understand their customers and tailor their marketing strategies and offerings to meet their specific needs and wants.
While market segments may differ in size and potential, the purpose of market segmentation is to identify distinct groups of customers with similar characteristics, not to assume that all segments are of equal size or potential.