A market segment = a group of people with shared needs.
By segmenting your market, you will find it easier to communicate. You can create propositions, key messages, offers etc for each market segment. As your messages are in line with the market segment, you will get more response and make more sales.
Here are two examples of market segments:
* Independent professionals, working in the Thames Valley, looking for more clients (B2B marketing)
* Fashion conscious 18 – 24 year old ABC1 women living in Chelsea (Consumer marketing)
Ideally, you should use a CRM (Customer Relationship Management System) to manage your customer database and segments.
For further information, here is a Wikipedia article.