A segment is a selection of your Contact list, based on common attributes.
You can add Tags to your contact list that defines each contact, for example your tag could be based on an industry sector, location, the products or services they buy from you or to identify new leads from your existing clients or customers.
You can have as many tags as you need or like. One contact will often fall into multiple segments. You decide how many segments you want and you decide on what the tags are called,
You can then use tags to select an audience for a targeted email campaign.
Further Reading: