Segmentation research in the marketing literature is reviewed, focusing on a discussion of proposed bases and methods. Classifications of segmentation bases and of segmentation methods are provided. Segmentation bases are reviewed in terms of their ability to generate segments that conform to five criteria for effective segmentation. Segmentation methods are discussed according to the classification provided, and areas in which substantial progress has been made are identified. The recent research thrust towards methods for segmentation, and especially the so called latent class methods suggests the onset of a turbulent change in segmentation theory and practice.