Market segmentation is the process of dividing a broad consumer or business market into smaller, more defined groups of consumers who have similar needs, characteristics, or behaviors. This allows companies to tailor their products, services, and marketing strategies to meet the specific needs of each segment more effectively. Common bases for segmentation include demographics (age, gender, income), psychographics (lifestyle, values), geography (location), and behavior (purchase history, usage rates). By targeting specific segments, businesses can optimize their marketing efforts, improve customer satisfaction, and increase their overall market share.