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A widely circulated statistic in the consumer marketing world is that approximately 2 in 10 new packaged goods succeed.

Put another way, 8 out of 10 entries fail to achieve the goals their manufacturers set for them. Even if the success rate for new consumer package goods were twice what the marketing facts of life indicate, the failure rate would still be quite grim. Many of the research tools used by sophisticated consumer marketing companies for new product development fall into the broad category referred to as "market segmentation." Recently some of these segmentation techniques have come under considerable fire. In this article I shall review and evaluate some of the more popular of these techniques. In addition, I shall discuss "product segmentation, a new approach with which I have been working. As will become apparent, most segmentation techniques have applicability for some uses, but not for others. We shall be primarily concerned with the use of segmentation for new product development.