Market segmentation is an integral part of a company's marketing strategy. It is the process of breaking down a larger target market into smaller, more homogeneous groups of customers that you can more efficiently market to. Both consumer-oriented and business-oriented companies should segment customers using one of several common approaches.
A target market is a specific group of people that you have determined to be part of your customer base. These projections are based on demographic studies and market research done with various sample groups. There are several factors used in determining a target market.