Markets can be defined as groups of people or organizations that have resources that could be exchanged for distinct benefits. Market segmentation is one strategy for market management and involves describing the market in terms of the subgroups that compose it so that exchanges with those subgroups can be more effectively promoted or facilitated. If market segmentation is to be successfully employed in the diffusion of educational innovations, dissemination strategists must understand not only the procedures necessary to isolate and focus attention on target segments, but also the constraints imposed by the educational environment that distinguish it from other private and public sector marketing environments. The effectiveness of market segmentation in disseminating three educational innovations (Minicourses; Man: A Course of Study; and Individually Guided Education) was tested in a field study using 72 schools in Chicago and California that had participated in a previous and related project. While the small sample size precluded conclusive results, enough information was gathered to prepare a guide to use of market segmentation for educational innovations. This document describes the experiment and its findings and presents the guidelines developed as a result. (Author/PGD)