Group of persons for whom a firm creates and maintains a product mix that specifically fits the needs and preferences of that group. For example, the furniture market can be divided into segments described as Early American, contemporary, or traditional. A marketer may choose to target the entire furniture market with the generalized product, promotion, distribution, and pricing strategy meant to appeal to everyone, or may go after one segment of the furniture market with a customized strategy or several segments of the furniture market with more than one strategy. 

Market segments can be defined in several other ways besides product types — for example, consumer types, channels of distribution, or price levels. Consumer market segments are defined in terms of geographic (place of purchase or use), demographic (age, income, occupation of consumer), and psychographic (buying motives, product usage level, lifestyle) criteria. 

Selecting a target market segment for a product rather than attempting to sell to the entire market can be a more efficient use of promotion dollars, because a greater market share can be achieved by capturing most or all of a segment via a carefully directed marketing plan that reaches precisely the right people with the right message than by trying to capture market share with a generic approach. It is also a better use of production resources if they can be concentrated on a single product and/or package, thus experiencing economies of scale. For example, a factory that only makes metal bed frames can operate with less equipment, expertise, and materials than a similar size company that makes metal bed frames, sofa beds, dining room tables, and office furniture. 

Target marketing makes better use of distribution dollars as well, enabling marketers to concentrate on developing working relationships with department store chains or on developing a business to business sales force, but not both.