Segmentation can be defined as a process of dividing a heterogeneous market into small group of customers who have homogenous requirement or demand. Market segmentation is defined as “the process of taking the total, heterogeneous market for a product and dividing it into several submarkets or segments, each of which tends to be homogeneous in all significance.Segmentation is quite essential for the effective marketing of the product which can be done with the help of 5 different ways which are geographic, demography, usage sought, psychographic and usage rate. Profitability, accessibility, measurability are the three key elements of effective segmentation of the market.Different strategy can be used by the market while segmenting the market. They can use single trait or multiple traits of the customers in doing so. But due to the effectiveness in the long run, multiple segmentation approach is used by many marketers.Geographic segmentation mainly focuses on the geographic location of the customers; Demographic segmentation relies on demographic factors such as age, gender, education level, life cycle stage and so on. Psychographic segmentation is based on the personality, motives and lifestyle of the customers. While in case of benefit sought segmentation, customers are segmented on the basis of type of benefits which the customers are looking from the product. The rate of consumption is the basis of the segmentation of market when it comes to rage rate segmentation.There is a close interrelation between segmentation, positioning and targeting. Once a market is segmented into different smaller segments, the marketer can decide which segment of the market he wants to entertain of fulfill the demand of. Once the segment is selected, targeting strategies are decided so that the customers can be attracted. As we know there are number of competitors in any market, thus to avoid competition in the market, the marketer develops the positioning strategy. Positioning is the process of developing a unique image in the mind of the customers against thee competitor.