A concept-based introduction to market segmentation is provided in this instructional module for undergraduate and graduate transportation-related courses. The material can be used in many disciplines including engineering, business, marketing, and technology. The concept of market segmentation is primarily a transportation planning technique by which the needs of a specific locale or population are systematically determined and compared to existing services within the same locale to identify unmet transportation needs. The unmet needs are used as the basis for targeting new or modified services. A series of steps for segmenting a region or population are outlined, and problems and issues that arise throughout the process are discussed. To illustrate the market segmentation approach, characteristics of various segments (e.g., commuters, transportation handicapped) are discussed, as well as major issues involved in transportation for different groups. Identifying market segments and their needs often involves data collection from various sources, including regional/local planning data and social service agencies. To assess existing services, operational characteristics may be studied as well as cost effectiveness measures. An eight-page bibliography is appended. (SW)