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VLANs breaks Broadcast domain and Divide your network logically on the basis of departments or group.
VLAN is used to break the chaos of brodcast. VLAN is ued to move the traffic to the switch ports where it is suppose to go and not to the entire switch. only same VLAN user will have their traffic and other VLAN users will not be affected of traffic. By VLAN we can easily track down which port is causing or producing more traffic hence In Switching environment, VLAN plays very important role.
Yes Brother Rahel Islam is very correct . We also tel to the questioner that if Broadcast domain become larger then lots of issue will arise among no 1 is performance issue as technical your switch or switches ARP entry will be bigger as well mac table will be larger so cause lots of broadcast multicast , some time its call broadcast storm along other issues like security , easy to lunch various type of security attack like arp poisoning , mac spoofing , man in middle etc etc
