The segmentation process begins by grouping: market offerings with similar sales potential. customers with similar lifetime values. competitors with similar needs and preferences. customers with similar needs and preferences. customers with similar demographic profiles.

The segmentation process begins by grouping : customers with similar needs and preferences and customers with similar demographic profiles. The segmentation is done to understand the product or service needs and buying behavior of different groups in the market. Customers belonging to the same segment show similar characteristics so a product offering or service can be developed customized for that particular segment. Various market segments can be based on gender, age, lifestyle, family size or a particular location etc.