The resources of any given firm are usually limited. As such, no firm can normally afford to attack the entire market without any delimitation whatsoever. It would be better if the efforts are concentrated on the most productive and profitable segments of the market. By focusing sharply on each of the different customer groups within a market, market segmentation would make the marketing effort more efficient and economical.

It will ensure that the marketing effort is concentrated on well defined and carefully chosen market segments, instead of being frittered away over irrelevant segments or unproductive and unprofitable territories and markets. As a matter of fact, some marketing experts have described market segmentation as the strategy of dividing the markets in order to conquer them.

Through segmentation the marketing man can continuously look for the differences among the customer groups and decide on appropriate strategies. Segmentation help assess how far the existing offers in the market from competitors match the needs of the customer segments. Thereby segmentation also helps the marketing man spot the relatively less satisfied segments and make a business success by satisfying such segments.

Segmentation brings benefits not only to the firm but also to customers. When market segmentation reaches higher levels of sophistication and perfection, customers and companies can choose each other for mutual benefit and satisfaction. They can rely on each others discrimination. The firm can anticipate the future wants of customers and the customers can anticipate the future capabilities of the firm.

Market targeting is the process of fixing ones target market. It should not be considered synonymous with market segmentation. The two concepts are significantly different from each other. Market segmentation is actually the prelude to target market selection. The marketing man normally carries out several tasks in addition to segmentation before selecting the target market.