Expanding the Scope of Segmentation Research

Abstract

MARKET segmentation helps the firm gear a specific product to the likes or requirements of a particular target group. For many companies, it is far better to capture bigger pieces of fewer markets than to scramble about for a smaller share of every market in sight. The segmentation concept would be more meaningful to management if research were to cover the entire scope of the problem. This means the inclusion in the initial survey of productspecific measures on both psychographics and communications behavior in addition to the standard attitudinal and usage data. After the segments have been selected, a second-phase research should be conducted to estimate the response elasticities of different submarkets to the firm's communication mix. In this way, management will be in a firm position to evaluate the profitability of the segmentation strategy. Most of the research undertaken at present does not adopt this two-fold approach. Even the initial survey is often unsatisfactory. In some cases, the criteria employed for grouping consumers are so general that they cannot discriminate among users of various brands within a product category. In other cases, these bases are so specific that they ignore the different nuances of consumer behavior and thus are not very helpful for developing marketing strategies. A brief review of the published literature on the subject brings these problems out clearly and sets the stage for a detailed discussion of the proposed two-phase approach. A case history from the food industry illustrates the usefulness of this procedure. Pitfalls in Existing Methods

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