WHAT MARKET

SEGMENTATION

IS, AND WHAT IT ISN'T

Geraldine Fennell, Consultant

Joel Saegert, The University of Texas at San Antonio
Robert J. Hoover, Texas A&M University-Corpus Christi
Abstract
Segmentation variables identify kinds of demand (user wants) that a producer may
consider responding to. Nevertheless, authors of textbooks in marketing and consumer behavior regularly include, as "bases for segmentation," variables that do
not yield groups that are homogeneous as regards demand within a product market. A study conducted to illustrate market segmentation research, which operationalized user wants as concerns/interests relevant to engaging in the focal
task/interest, also included some textbook "bases for segmentation." Factor followed by cluster analyses show that individuals identified by each of the
"segmentation variables" available for study are heterogeneous as regards concemslinterests.
Introduction
The essential idea of market segmentation is this

Demand within a product rnar-

ket is heterogeneous (Smith 1956), a notion that is directly relevant to product

policy.

As regards product policy, management has the option or choosing the at-

tributes of its offering a) in light of, or b) without regard to, the nature of demand
in its product market, and the existing state of want satisfaction.

Accordingly,

market segmentation is about a) subdivisions orb) a market, and it raises a number

of distinct issues" How is a market to be defined? How is heterogeneous demand
within a product market to be described? Given that producers have competitors,
and demand within a product market is heterogeneous, how is management to
choose a kind of demand to respond to?

In their presentations on the subject,

most authors of textbooks in marketing or consumer behavior do not address such

questions, or deal with the relevant issues, explicitly or even implicitly.
treatments

include

a figure

that

contains

a wide
155

variety

of so-called

Instead,
"Bases

for