Judging the quality of customer segments: segmentation effectiveness

Sally Dibb · Lyndon P. Simkin

50 citations0/0 files storedJournal of Strategic Marketing

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Customer churn and segmentation Marketing and Advertising Strategies Consumer Market Behavior and Pricing

Abstract

Market segmentation is well established in marketing theory and applied by organisations from all industry sectors. Despite widespread use, developing and implementing segmentation schemes is rarely problem free. Testing the quality and robustness of segments is one of the difficulties which marketers face. The literature describes segment quality criteria which are intended to help with this task, yet there is little evidence of their deployment and efficacy in practice. Using a longitudinal case study from the Eastern European mobile phone market, the practical application, impact and efficacy of these segment quality criteria are examined. The findings reveal the value of combining ‘hard’ statistical and ‘soft’ segment quality criteria to test the validity and robustness of segmentation outputs prior to implementing the segmentation. Implications from this case for managers seeking to select and deploy suitable quality criteria are considered.

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References

1984Case Study Research: Design and Methods 1991Case Study Research: Design and Methods 2004Case Study Research 1972Principles of Marketing 1997Market Segmentation: Conceptual and Methodological Foundations 1978Issues and Advances in Segmentation Research 2002Exploring the Phenomenon of Customers' Desired Value Change in a Business-to-Business Context 2000Market Segmentation

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