Long Tails and Niche Markets
Joi's posted a link to this Wired article about "The Long Tail", and puts it much better than I managed to when I was stumbling through similar lines of thought:
"He explains that online sales show that the market size of stuff below the break even threshold for physical distribution is often larger than the market for the "hits" that make it into stores. He calls this "The Long Tail". We can essentially double the market for most content by figuring out ways to help people find the stuff they are looking for in the long tail and deliver it online."
If you help everyone find their own niche, you'll appeal to larger audience than if you just target the top N folks. I guess this is what segmentation is all about; I've just picked up a copy of Tomi Ahonen's new book on 3G Marketing, and it's got quite a bit on this topic tucked away.