- noun the dividing of the market or consumers into certain categories according to their buying habits
- (written as Market Segmentation)The act of dividing an overall market into groups, or segments, of consumers with similar characteristics such as age, region of residence or average health status. It is usually done in order to engage in price discrimination in price-searchers' markets. Prices in the markets with less elastic demand tend to be higher. In order to work effectively, the segments need to be such that resale is not possible from low-price to high-price segments (parallel trade), so segmentation is likely to be seen when there is price-searching and the product is highly perishable, transport costs are high, or where, if segments correspond to ju risdictions, suppliers have managed to 'capture' regulatory agencies and create barriers to entry.
- noun the division of the market or consumers into categories according to their buying habits