Market segmentation is a process in which enterprises divide the whole market into different consumer groups according to different consumer demands. Its objective basis is: the heterogeneity of consumer demand. The main basis of market segmentation is the customer base with consistent demand in heterogeneous markets, and the essence is to seek homogeneity in heterogeneous markets.

The concept of market segmentation was put forward by Wendell R.Smith, an American marketing scientist, in 1956. According to consumers' desires and demands, the whole market that enterprises are difficult to serve because of their large scale is divided into several sub-markets with common characteristics. The consumer groups in the same sub-market are called target consumer groups, and the consumer groups in these target sub-markets are the focus groups relative to the mass market.

After market segmentation, the market segmentation is more specific and it is easier to understand the needs of consumers. Enterprises can determine their own service targets, that is, the target market, according to their own business philosophy, policies, production technology and marketing strength. Aiming at the smaller target market, it is convenient to formulate special marketing strategies.

At the same time, in market segments, information is easy to understand and feedback. Once the demand of consumers changes, enterprises can quickly change their marketing strategies and formulate corresponding countermeasures to adapt to the changes in market demand and improve their adaptability and competitiveness.