Market segmentation involves dividing a heterogeneous market into homogeneous subgroups. It is based on the recognition that markets contain different customer groups with distinct needs, characteristics and behaviors. The key objectives of market segmentation are to identify specific customer segments, understand their unique needs and develop tailored marketing strategies for each segment. Common approaches to segmentation include mass marketing, product differentiation and target marketing. Markets can be segmented based on geographic, demographic, psychographic and behavioral factors. The main benefits of effective segmentation include better understanding customer needs, more efficient resource allocation and increased sales and profits.