Why is it desirable to segment markets?

The Nature of Market Segmentation
Why is it desirable to segment markets? Many owners and managers of hos¬pitality organizations ask this question. Often, they believe that they need to appeal to all potential customers, and that by segmenting the market they will weaken their competitive position and profits. They believe that if they seg¬ment the market and target their marketing and promotional efforts to just a few selected segments, their sales volume will fall. This approach is short¬sighted and fails to consider the reasons underlying a market segmentation approach. The basic premise of segmentation is to allocate limited resources so that return on investment can be maximized.