what is market segmentation? what is market segmentation? the promotion of a particular product or company by means of advertising and distinctive design. a process through which broader, larger, more heterogeneous markets are divided into narrower, smaller, more homogeneous market segments a tool that firms manage with the intent of creating hopefully-differentiating value for the branded products they make and market. an image and set of benefits or problem-solving values, that presumably is associated with branded products.