Business leads are made up of market segmentation and targeting the market. The term ‘market’, refers to the aggregate of all demand for a particular product or service, arising from the aggregate of all consumers- existing and potential for the product.

Markets vary widely from one to another, since the consumers who constitute the markets vary widely in their characteristics. Even a specific market for a given product is not totally homogeneous. When a market is split up into several smaller units, each with homogeneous characteristics, it facilitates the effective tapping of the market.

Market segmentation is the process of disaggregating the total market for a given product into a number of sub-markets. This is very important in getting business leads. The heterogeneous market is broken up in the process into a number of fairly homogeneous units.

The process is based on the recognition that any given market or consumer group is made up of a number of subgroups distinguished by varying needs and buying behaviors. In addition, it is feasible to disaggregate the consumers into suitable segments in such a manner that the characteristics of the segmented groups would vary significantly among segments, but would also be identical within segments.

Market segmentation confers several benefits on the business firms. In the first place, it helps distinguish one customer group from another within a given market, thereby enabling a business to decide which segment of the market should form the target market. It also enables the effective crystallization of the specific needs of the buyers in the target market, and facilitates an in-depth study of the characteristics of the buyers.

When the buyers are approached after careful segmentation, responses that are predictable would be forthcoming for them. This would help the business firms in developing their marketing program on a predictable and reliable base.