im not sure,but i think market segmentation refers to dividing the market into groups.for eg,you'll divide the market into groups of children,adults and the elderly,and then your product line will target these market segments.a product for children obviously wont be sold in the market for the elderly.
im just making a guess btw.i took my maketing course some 3 semesters back but i dont remember all of it.i did study market segmentation,but i could be totally wrong with my explanation.do check it with someone else too.