Professional Documents
Culture Documents
Market Segmentation PDF
Market Segmentation PDF
Market segmentation is a process of dividing a heterogeneous market into relatively more homogenous
segments based on certain parameters like geographic, demographic, psychographic, and behavioural. It is the
activity of dividing a broad consumer or business market, normally consisting of existing and potential
customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics.
In dividing or segmenting markets, researchers typically look for common characteristics such as shared needs,
common interests, similar lifestyles, or even similar demographic profiles. The overall aim of segmentation is
to identify high yield segments – that is, those segments that are likely to be the most profitable or that have
growth potential – so that these can be selected for special attention (i.e. become target markets). Many
different ways to segment a market have been identified. Business-to-business (B2B) sellers might segment the
market into different types of businesses or countries. While business-to-consumer (B2C) sellers might
segment the market into demographic segments, lifestyle segments, behavioural segments, or any other
meaningful segment.
Contents
Definition and brief explanation
History
Criticisms
Market segmentation strategy
Segmentation, targeting, positioning
Identifying the market to be segmented
Bases for segmenting consumer markets
Geographic segmentation
Demographic segmentation
Psychographic segmentation
Behavioural segmentation
Other types of consumer segmentation
Selecting target markets
Criteria for evaluating segment attractiveness
Developing the marketing program and positioning strategy
Basis for segmenting business markets
Use in customer retention
Segmentation: algorithms and approaches
A-priori segmentation
Post-hoc segmentation
Statistical techniques used in segmentation
Data sources used for segmentation
Companies (proprietary segmentation databases)
See also
References
External links
History
The business historian, Richard S. Tedlow, identifies four stages in
the evolution of market segmentation:[4]
Evidence of early marketing segmentation has also been noted elsewhere in Europe. A study of the German
book trade found examples of both product differentiation and market segmentation in the 1820s.[9] From the
1880s, German toy manufacturers were producing models of tin toys for specific geographic markets; London
omnibuses and ambulances destined for the British market; French postal delivery vans for Continental Europe
and American locomotives intended for sale in America.[10] Such activities suggest that basic forms of market
segmentation have been practised since the 17th century and possibly earlier.
Contemporary market segmentation emerged in the first decades of the twentieth century as marketers
responded to two pressing issues. Demographic and purchasing data were available for groups but rarely for
individuals and secondly, advertising and distribution channels were available for groups, but rarely for single
consumers. Between 1902 and 1910, George B Waldron, working at Mahin's Advertising Agency in the
United States used tax registers, city directories, and census data to show advertisers the proportion of
educated vs illiterate consumers and the earning capacity of different occupations, etc. in a very early example
of simple market segmentation.[11][12] In 1924 Paul Cherington developed the 'ABCD' household typology;
the first socio-demographic segmentation tool.[11][13] By the 1930s, market researchers such as Ernest Dichter
recognised that demographics alone were insufficient to explain different marketing behaviours and began
exploring the use of lifestyles, attitudes, values, beliefs and culture to segment markets.[14] With access to
group-level data only, brand marketers approached the task from a tactical viewpoint. Thus, segmentation was
essentially a brand-driven process.
Wendell R. Smith is generally credited with being the first to introduce the concept of market segmentation
into the marketing literature in 1956 with the publication of his article, "Product Differentiation and Market
Segmentation as Alternative Marketing Strategies."[15] Smith's article makes it clear that he had observed
"many examples of segmentation" emerging and to a certain extent saw this as a "natural force" in the market
that would "not be denied."[16] As Schwarzkopf points out, Smith was codifying implicit knowledge that had
been used in advertising and brand management since at least the 1920s.[17]
Until relatively recently, most segmentation approaches have retained a tactical perspective in that they address
immediate short-term decisions; such as describing the current “market served” and are concerned with
informing marketing mix decisions. However, with the advent of digital communications and mass data
storage, it has been possible for marketers to conceive of segmenting at the level of the individual consumer.
Extensive data is now available to support segmentation at very narrow groups or even for the single customer,
allowing marketers to devise a customised offer with an individual price which can be disseminated via real-
time communications.[18] Some scholars have argued that the fragmentation of markets has rendered
traditional approaches to market segmentation less useful.[19]
Criticisms
The limitations of conventional segmentation have been well documented in the literature.[20] Perennial
criticisms include:
Market segmentation has many critics. But in spite of its limitations, market segmentation remains one of the
enduring concepts in marketing and continues to be widely used in practice. One American study, for
example, suggested that almost 60 percent of senior executives had used market segmentation in the past two
years.[28]
In consumer marketing, it is difficult to find examples of undifferentiated approaches. Even goods such as salt
and sugar, which were once treated as commodities, are now highly differentiated. Consumers can purchase a
variety of salt products; cooking salt, table salt, sea salt, rock salt, kosher salt, mineral salt, herbal or vegetable
salts, iodised salt, salt substitutes, and many more. Sugar also comes in many different types - cane sugar, beet
sugar, raw sugar, white refined sugar, brown sugar, caster sugar, sugar lumps, icing sugar (also known as
milled sugar), sugar syrup, invert sugar, and a plethora of sugar substitutes including smart sugar which is
essentially a blend of pure sugar and a sugar substitute. Each of these product types is designed to meet the
needs of specific market segments. Invert sugar and sugar syrups, for example, are marketed to food
manufacturers where they are used in the production of conserves, chocolate, and baked goods. Sugars
marketed to consumers appeal to different usage segments – refined sugar is primarily for use on the table,
while caster sugar and icing sugar are primarily designed for use in home-baked goods.
Main Strategic Approaches to Segmentation[30]
Number of Segmentation
Comments
segments strategy
Undifferentiated
Zero Mass marketing: no segmentation
strategy
Niche marketing: focus efforts on a
One Focus strategy
small, tightly defined target market
Two or Differentiated Multiple niches: focus efforts on 2
more strategy or more, tightly defined targets
Even simple products like salt, which
One-to-one marketing: customise might be considered as
Thousands Hypersegmentation the offer for each individual commodities, are highly
customer
differentiated in practice.
A basic approach is to first assess the size of the broad population, then estimate the percentage likely to use
the product or service and finally to estimate the revenue potential.
Where:
The major challenge with the Bass model is estimating the parameters for p and q. However, the Bass model
has been so widely used in empirical studies that the values of p and q for more than 50 consumer and
industrial categories have been determined and are widely published in tables.[35] The average value for p is
0.037 and for q is 0.327.
For example, although dress size is not a standard base for segmenting a market, some fashion houses have
successfully segmented the market using women's dress size as a variable.[39] However, the most common
bases for segmenting consumer markets include: geographics, demographics, psychographics, and behaviour.
Marketers normally select a single base for the segmentation analysis, although, some bases can be combined
into a single segmentation with care. For example, geographics and demographics are often combined, but
other bases are rarely combined. Given that psychographics includes demographic variables such as age,
gender, and income as well as attitudinal and behavioural variables, it makes little logical sense to combine
psychographics with demographics or other bases. Any attempt to use combined bases needs careful
consideration and a logical foundation.
Segmentation
Brief explanation of base (and example) Typical segments examples
base
Young, Upwardly-mobile, Prosperous,
Quantifiable population characteristics. ( age, Professionals (YUPPY); Double Income No
Demographic gender, income, education, socio-economic Kids (DINKS); Greying, Leisured And
status, family size or situation). Moneyed (GLAMS); Empty- nester, Full-
nester
Physical location or region ( country, state, New Yorkers; Remote, outback Australians;
Geographic
region, city, suburb, postcode). Urbanites, Inner-city dwellers
Geo-
Combination of geographic & demographic Rural farmers, Urban professionals, 'sea-
demographic or
variables. changers', 'tree-changers'
geoclusters
Lifestyle, social or personality characteristics. Socially Aware; Traditionalists,
Psychographics (typically includes basic demographic Conservatives, Active 'club-going' young
descriptors) professionals
Purchasing, consumption or usage behaviour. ( Tech-savvy (aka tech-heads); Heavy users,
Needs-based, benefit-sought, usage occasion, Enthusiasts; Early adopters, Opinion
Behavioural
purchase frequency, customer loyalty, buyer Leaders, Luxury-seekers, Price-conscious,
readiness). Quality-conscious, Time-poor
The same consumer changes in their Actively shopping, just entering into a life
Contextual and attractiveness to marketers based on context change event, being physically in a certain
situational and situation. This is particularly used in digital location, or at a particular retailer which is
targeting via programmatic bidding approaches known from GPS data via smartphones.
The following sections provide a detailed description of the most common forms of consumer market
segmentation.
Geographic segmentation
Geographic segmentation divides markets according to geographic criteria. In practice, markets can be
segmented as broadly as continents and as narrowly as neighborhoods or postal codes.[40] Typical geographic
variables include:
Country Brazil, Canada, China, France, Germany, India, Italy, Japan, UK, US
Region North, North-west, Mid-west, South, Central
Population density: central business district (CBD), urban, suburban, rural, regional
City or town size: under 1,000; 1,000–5,000; 5,000–10,000 ... 1,000,000–3,000,000 and over
3,000,000
Climatic zone: Mediterranean, Temperate, Sub-Tropical, Tropical, Polar
The geo-cluster approach (also called geodemographic segmentation) combines demographic data with
geographic data to create richer, more detailed profiles.[41] Geo-cluster approaches are a consumer
classification system designed for market segmentation and consumer profiling purposes. They classify
residential regions or postcodes on the basis of census and lifestyle characteristics obtained from a wide range
of sources. This allows the segmentation of a population into smaller groups defined by individual
characteristics such as demographic, socio-economic, or other shared socio-demographic characteristics.
Geographic segmentation may be considered the first step in international marketing, where marketers must
decide whether to adapt their existing products and marketing programs for the unique needs of distinct
geographic markets. Tourism Marketing Boards often segment international visitors based on their country of
origin.
A number of proprietary geo-demographic packages are available for commercial use. Geographic
segmentation is widely used in direct marketing campaigns to identify areas that are potential candidates for
personal selling, letter-box distribution, or direct mail. Geo-cluster segmentation is widely used by
Governments and public sector departments such as urban planning, health authorities, police, criminal justice
departments, telecommunications, and public utility organisations such as water boards.[42]
Demographic segmentation
Segmentation according to demography is based on consumer- demographic variables such as age, income,
family size, socio-economic status, etc.[43] Demographic segmentation assumes that consumers with similar
demographic profiles will exhibit similar purchasing patterns, motivations, interests, and lifestyles and that
these characteristics will translate into similar product/brand preferences.[44] In practice, demographic
segmentation can potentially employ any variable that is used by the nation's census collectors. Typical
demographic variables and their descriptors are as follows:
Age: Under 5, 5–8 years, 9–12 years, 13–17 years, 18–24, 25–29, 30–39, 40–49, 50–59,
60+[45]
Gender: Male, Female[46]
Occupation: Professional, self-employed, semi-professional, clerical/ admin, sales, trades,
mining, primary producer, student, home duties, unemployed, retired[47]
Socio-economic: A, B, C, D, E, or I, II, III, IV or V (normally divided into quintiles)[48]
Marital Status: Single, married, divorced, widowed
Family Life-stage: Young single; Young married with no children; Young family with children
under 5 years; Older married with children; Older married with no children living at home, Older
living alone[49]
Family size/ number of dependants: 0, 1–2, 3–4, 5+
Income: Under $10,000; 10,000–20,000; 20,001–30,000; 30,001–40,000, 40,001–50,000 etc.
Educational attainment: Primary school; Some secondary, Completed secondary, Some
university, Degree; Post graduate or higher degree
Home ownership: Renting, Own home with mortgage, Home owned outright
Ethnicity: Asian, African, Aboriginal, Polynesian, Melanesian, Latin-American, African-
American, American Indian, etc.
Religion: Catholic, Protestant, Muslim, Jewish, Buddhist, Hindu, Other
The use of multiple segmentation variables normally requires analysis of databases using sophisticated
statistical techniques such as cluster analysis or principal components analysis. These types of analysis require
very large sample sizes. However, data collection is expensive for individual firms. For this reason, many
companies purchase data from commercial market research firms, many of whom develop proprietary software
to interrogate the data.
The labels applied to some of the more popular demographic segments began to enter the popular lexicon in
the 1980s.[50][51][52] These include the following:[53][54]
DINK: Double (or dual) Income, No Kids, describes one member of a couple with
above-average household income and no dependent children, tend to exhibit
discretionary expenditure on luxury goods and entertainment and dining out
GLAM: Greying, Leisured and Moneyed. Retired older persons, asset rich, and high
income. Tend to exhibit higher spending on recreation, travel, and entertainment
GUPPY: (aka GUPPIE) Gay, Upwardly
Mobile, Prosperous, Professional;
blend of gay and YUPPY (can also
refer to the London-based equivalent of
YUPPY)
MUPPY: (aka MUPPIE) Mid-aged,
Upwardly Mobile, Prosperous,
Professional
Preppy: (American) Well educated,
well-off, upper-class young persons; a
graduate of an expensive school. Often
distinguished by a style of dress. Visualisation of two approaches to demographic
SITKOM: Single Income, Two Kids, segmentation using one and two variables. On the
Oppressive Mortgage. Tend to have left, a single variable (age) is used. On the right,
very little discretionary income, struggle two variables (income and occupation) are used to
to make ends meet form the segments.
Tween: Young person who is
approaching puberty, aged
approximately 9–12 years; too old to be considered a child, but too young to be a
teenager; they are 'in between'.
WASP: (American) White, Anglo-Saxon Protestant. Tend to be high-status and
influential white Americans of English Protestant ancestry.
YUPPY: (aka yuppie) Young, Urban/ Upwardly-mobile, Prosperous, Professional. Tend
to be well-educated, career-minded, ambitious, affluent, and free spenders.
Psychographic segmentation
While many of these proprietary psychographic segmentation analyses are well-known, the majority of studies
based on psychographics are custom designed. That is, the segments are developed for individual products at a
specific time. One common thread among psychographic segmentation studies is that they use quirky names to
describe the segments.[56]
Behavioural segmentation
Behavioural segmentation divides consumers into groups according to their observed behaviours. Many
marketers believe that behavioural variables are superior to demographics and geographics for building market
segments[57] and some analysts have suggested that behavioural segmentation is killing off demographics.[58]
Typical behavioural variables and their descriptors include:[59]
Note that these descriptors are merely commonly used examples. Marketers customise the variable and
descriptors for both local conditions and for specific applications. For example, in the health industry, planners
often segment broad markets according to 'health consciousness' and identify low, moderate, and highly health
conscious segments. This is an applied example of behavioural segmentation, using attitude to product or
service as a key descriptor or variable which has been customised for the specific application.
Purchase/usage occasion
Purchase or usage occasion segmentation focuses on analyzing occasions when consumers might purchase or
consume a product. This approach customer-level and occasion-level segmentation models and provides an
understanding of the individual customers’ needs, behaviour, and value under different occasions of usage and
time. Unlike traditional segmentation models, this approach assigns more than one segment to each unique
customer, depending on the current circumstances they are under.
Benefit-sought
Benefit segmentation (sometimes called needs-based segmentation) was developed by Grey Advertising in the
late 1960s.[61] The benefits-sought by purchasers enables the market to be divided into segments with distinct
needs, perceived value, benefits sought, or advantage that accrues from the purchase of a product or service.
Marketers using benefit segmentation might develop products with different quality levels, performance,
customer service, special features, or any other meaningful benefit and pitch different products at each of the
segments identified. Benefit segmentation is one of the more commonly used approaches to segmentation and
is widely used in many consumer markets including motor vehicles, fashion and clothing, furniture, consumer
electronics, and holiday-makers.[62]
Loker and Purdue, for example, used benefit segmentation to segment the pleasure holiday travel market. The
segments identified in this study were the naturalists, pure excitement seekers, escapists.[63]
Attitudinal segments
Attitudinal segmentation provides insight into the mindset of customers, especially the attitudes and beliefs that
drive consumer decision-making and behaviour. An example of attitudinal segmentation comes from the UK's
Department of Environment which segmented the British population into six segments, based on attitudes that
drive behaviour relating to environmental protection:[64]
Greens: Driven by the belief that protecting the environment is critical; try to conserve
whenever they can
Conscious with a conscience: Aspire to be green; primarily concerned with wastage; lack
awareness of other behaviours associated with broader environmental issues such as climate
change
Currently constrained: Aspire to be green but feel they cannot afford to purchase organic
products; pragmatic realists
Basic contributors: Sceptical about the need for behaviour change; aspire to conform to
social norms; lack awareness of social and environmental issues
Long-term resistance: Have serious life priorities that take precedence before a behavioural
change is a consideration; their everyday behaviours often have a low impact on the
environment, but for other reasons than conservation
Disinterested: View greenies as an eccentric minority; exhibit no interest in changing their
behaviour; may be aware of climate change but have not internalised it to the extent that it
enters their decision-making process.
In addition to geographics, demographics, psychographics, and behavioural bases, marketers occasionally turn
to other means of segmenting the market, or to develop segment profiles.
Generational segments
A generation is defined as "a cohort of people born within a similar span of time (15 years at the upper end)
who share a comparable age and life stage and who were shaped by a particular span of time (events, trends,
and developments)."[65] Generational segmentation refers to the process of dividing and analyzing a
population into cohorts based on their birth date. Generational segmentation assumes that people's values and
attitudes are shaped by the key events that occurred during their lives and that these attitudes translate into
product and brand preferences.
Demographers, studying population change, disagree about precise dates for each generation.[66] Dating is
normally achieved by identifying population peaks or troughs, which can occur at different times in each
country. For example, in Australia the post-war population boom peaked in 1960,[67] while the peak occurred
somewhat later in the US and Europe,[68] with most estimates converging on 1964. Accordingly, Australian
Boomers are normally defined as those born between 1945–1960; while American and European Boomers are
normally defined as those born between 1946–64. Thus, the generational segments and their dates discussed
here must be taken as approximations only.
Cultural segmentation
Cultural segmentation is used to classify markets according to the cultural origin. Culture is a major dimension
of consumer behaviour and can be used to enhance customer insight and as a component of predictive models.
Cultural segmentation enables appropriate communications to be crafted for particular cultural communities.
Cultural segmentation can be applied to existing customer data to measure market penetration in key cultural
segments by product, brand, channel as well as traditional measures of recency, frequency, and monetary
value. These benchmarks form an important evidence-base to guide strategic direction and tactical campaign
activity, allowing engagement trends to be monitored over time.[71]
Cultural segmentation can be combined with other bases, especially geographics so that segments are mapped
according to state, region, suburb, and neighborhood. This provides a geographical market view of population
proportions and may be of benefit in selecting appropriately located premises, determining territory boundaries,
and local marketing activities.
Census data is a valuable source of cultural data but cannot meaningfully be applied to individuals. Name
analysis (onomastics) is the most reliable and efficient means of describing the cultural origin of individuals.
The accuracy of using name analysis as a surrogate for cultural background in Australia is 80–85%, after
allowing for female name changes due to marriage, social or political reasons, or colonial influence. The extent
of name data coverage means a user will code a minimum of 99 percent of individuals with their most likely
ancestral origin.
Online market segmentation is similar to the traditional approaches in that the segments should be identifiable,
substantial, accessible, stable, differentiable, and actionable.[72] Customer data stored in online data
management systems such as a CRM or DMP enables the analysis and segmentation of consumers across a
diverse set of attributes.[73] Forsyth et al., in an article 'Internet research' grouped current active online
consumers into six groups: Simplifiers, Surfers, Bargainers, Connectors, Routiners, and Sportsters. The
segments differ regarding four customers' behaviours, namely:[74]
For example, Simplifiers make over 50 percent of all online transactions. Their main characteristic is that they
need easy (one-click) access to information and products as well as easy and quickly available service
regarding products. Amazon.com is an example of a company that created an online environment for
Simplifiers. They also 'dislike unsolicited e-mail, uninviting chat rooms, pop-up windows intended to
encourage impulse buys, and other features that complicate their on- and off-line experience'. Surfers like to
spend a lot of time online, thus companies must have a variety of products to offer and constant update,
Bargainers are looking for the best price, Connectors like to relate to others, Routiners want content and
Sportsters like sport and entertainment sites.
When a marketer enters more than one market, the segments are often
labeled the primary target market, secondary target market. The
primary market is the target market selected as the main focus of
marketing activities. The secondary target market is likely to be a
segment that is not as large as the primary market, but has growth
potential. Alternatively, the secondary target group might consist of a
small number of purchasers that account for a relatively high In targeting, a group of consumers is
proportion of sales volume perhaps due to purchase value or purchase selected to become the focus of the
frequency. marketing program
There are no formulas for evaluating the attractiveness of market segments and a good deal of judgment must
be exercised.[76] Nevertheless, a number of considerations can be used to assist in evaluating market segments
for overall attractiveness. The following lists a series of questions that can be asked.
According to advertising guru, David Ogilvy, "Positioning is the act of designing the company’s offering and
image to occupy a distinctive place in the minds of the target market. The goal is to locate the brand in the
minds of consumers to maximise the potential benefit to the firm. A good brand positioning helps guide
marketing strategy by clarifying the brand’s essence, what goals it helps the consumer achieve, and how it
does so in a unique way."[77]
1. Against a competitor
2. Within a category
3. According to product benefit
4. According to product attribute
5. For usage occasion
6. Along price lines e.g. a luxury brand or premium brand
7. For a user
8. Cultural symbols e.g. Australia's Easter Bilby (as a culturally appropriate alternative to the
Easter Bunny).
The most widely used bases for segmenting business markets are:
Geographic segmentation occurs when a firm seeks to identify the most promising
geographic markets to enter. Business can tap into business census type products published
by Government departments to identify geographic regions that meet certain predefined
criteria.
Key firmographic variables: standard industry classification (SIC); company size (either
in terms of revenue or number of employees), industry sector or location (country and/or
region), usage rate, purchase frequency, number of years in business, ownership
factors and buying situation
This analysis of customer lifecycles is usually included in the growth plan of a business to determine which
tactics to implement to retain or let go of customers.[84] Tactics commonly used range from providing special
customer discounts to sending customers communications that reinforce the value proposition of the given
service.
A-priori segmentation
A priori research occurs when "a theoretical framework is developed before the research is conducted".[86] In
other words, the marketer has an idea about whether to segment the market geographically, demographically,
psychographically or behaviourally before undertaking any research. For example, a marketer might want to
learn more about the motivations and demographics of light and moderate users in an effort to understand what
tactics could be used to increase usage rates. In this case, the target variable is known – the marketer has
already segmented using a behavioural variable – user status. The next step would be to collect and analyze
attitudinal data for light and moderate users. The typical analysis includes simple cross-tabulations, frequency
distributions and occasionally logistic regression or one of a number of proprietary methods.[87]
The main disadvantage of a-priori segmentation is that it does not explore other opportunities to identify
market segments that could be more meaningful.
Post-hoc segmentation
In contrast, post-hoc segmentation makes no assumptions about the optimal theoretical framework. Instead, the
analyst's role is to determine the segments that are the most meaningful for a given marketing problem or
situation. In this approach, the empirical data drives the segmentation selection. Analysts typically employ
some type of clustering analysis or structural equation modeling to identify segments within the data. Post-hoc
segmentation relies on access to rich datasets, usually with a very large number of cases and uses sophisticated
algorithms to identify segments.[88]
The figure alongside illustrates how segments might be formed using clustering; however, note that this
diagram only uses two variables, while in practice clustering employs a large number of variables.[89]
Marketers often engage commercial research firms or consultancies to carry out segmentation analysis,
especially if they lack the statistical skills to undertake the analysis. Some segmentation, especially post-hoc
analysis, relies on sophisticated statistical analysis.
Marketers use a variety of data sources for segmentation studies and market profiling. Typical sources of
information include:[101][102]
Internal sources
Customer transaction records e.g. sale value per transaction, purchase frequency
Patron membership records e.g. active members, lapsed members, length of membership
Customer relationship management (CRM) databases
In-house surveys
Customer self-completed questionnaires or feedback forms
External sources
Commissioned research (where the business commissions a research study and maintains
exclusive rights to the data; typically the most expensive means of data collection)
Data-mining techniques
Census data (population and business census)
Observed purchase behaviours
Government agencies and departments
Government statistics and surveys (e.g. studies by departments of trade, industry, technology,
etc.)
Omnibus surveys (a standard, regular survey with a basic set of questions about demographics
and lifestyles where an individual can add specific sets of questions about product preference
or usage; generally lower cost than commissioned survey methods)
Professional/Industry associations/Employer associations
Proprietary surveys or tracking studies (also known as syndicated research; studies carried out
by market research companies where business can purchase the right to access part of the
data set)
Proprietary databases/software[103]
See also
Marketing § Segmentation
Market analysis § Market segmentation
Attitudinal targeting
Behavioural targeting
Demographic profile
Demographic targeting
Geo-targeting
Geodemographic segmentation
Mass marketing
Marketing strategy
Microsegment
Niche market
Persona
Positioning (marketing)
Precision marketing
Precision marketing
Product differentiation
Psychographics
Sagacity segmentation
Segmenting and positioning
Serviceable available market
Target audience
Targeted advertising
Total addressable market
References
1. Pride, W., Ferrell, O.C., Lukas, B.A., Schembri, S., Niininen, O. and Cassidy, R., Marketing
Principles, 3rd Asia-Pacific ed, Cengage, 2018, p. 200
2. Madhavaram, S., & Hunt, S. D., "The Service-dominant Logic and a Hierarchy of Operant
Resources: Developing Masterful Operant Resources and Implications for Marketing Strategy, "
Journal Of The Academy Of Marketing Science, Vol. 36, No. 1, 2008, pp 67-82.
3. Dickson, Peter R.; Ginter, James L., "Market Segmentation, Product Differentiation, and
Marketing Strategy, " Journal of Marketing, Vol. 51, No. 2, 1987, p. 1
4. In New and Improved: The Story of Mass Marketing in America, Basic Books, N.Y. 1990 pp. 4–
12, Richard Tedlow outlines first three stages: fragmentation, unification and segmentation. In a
subsequent work, published three years later, Tedlow and his co-author thought that they had
seen evidence of a new trend and added a fourth era, termed Hyper-segmentation (post
1980s); See Tedlow, R.A. and Jones, G., The Rise and Fall of Mass Marketing, Routledge,
N.Y., 1993, Chapter 2
5. Fullerton, R., "Segmentation in Practice: An Overview of the Eighteenth and Nineteenth
Centuries," in Jones, D.G.B. and Tadajewski, M. (eds), The Routledge Companion to Marketing
History, Oxon, Routledge, 2016, p. 94
6. Alberti, M. E., "Trade and Weighing Systems in the Southern Aegean from the Early Bronze
Age to the Iron Age: How Changing Circuits Influenced Glocal Measures," in Molloy, B. (ed.), Of
Odysseys and Oddities: Scales and Modes of Interaction Between Prehistoric Aegean
Societies and their Neighbours, [Sheffield Studies in Aegean Archaeology], Oxford, Oxbow, (E-
Book), 2016
7. Cox, N.C. and Dannehl, K., Perceptions of Retailing in Early Modern England, Aldershot,
Hampshire, Ashgate, 2007, pp. 155–59
8. McKendrick, N., Brewer, J. and Plumb, J.H., The Birth of a Consumer Society: The
Commercialization of Eighteenth Century England, London, 1982.
9. Fullerton, R.A., "Segmentation Strategies and Practices in the 19th-Century German Book
Trade: A Case Study in the Development of a Major Marketing Technique", in Historical
Perspectives in Consumer Research: National and International Perspectives, Jagdish N.
Sheth and Chin Tiong Tan (eds), Singapore, Association for Consumer Research, pp 135-139
10. Pressland, David, Book of Penny Toys, Pei International, 1991; Cross, G., Kids' Stuff: Toys and
the Changing World of American Childhood, Harvard University Press, 2009, pp 95-96
11. Jones, G.D.B. and Tadajewski, M. (eds), The Routledge Companion to Marketing History,
Oxon, Routledge, 2016, p. 66
12. Lockley, L.C., "Notes on the History of Marketing Research", Journal of Marketing, Vol. 14, No.
5, 1950, pp. 733–736
13. Lockley, L.C., "Notes on the History of Marketing Research", Journal of Marketing, vol. 14, no.
5, 1950, p. 71
14. Wilson B. S. and Levy, J., "A History of the Concept of Branding: Practice and Theory", Journal
of Historical Research in Marketing, vol. 4, no. 3, 2012, pp. 347-368; DOI:
10.1108/17557501211252934
15. Cano, C., "The Recent Evolution of Market Segmentation Concepts and Thoughts Primarily by
Marketing Academics," in E. Shaw (ed) The Romance of Marketing History, Proceedings of the
11th Conference on Historical Analysis and Research in Marketing (CHARM), Boca Raton, FL,
AHRIM, 2003.
16. Smith, W.R., "Product Differentiation and Market Segmentation as Alternative Marketing
Strategies," Journal of Marketing, Vol. 21, No. 1, 1956, pp. 3–8 and reprinted in Marketing
Management, vol. 4, no. 3, 1995, pp. 63–65
17. Schwarzkopf, S., "Turning Trade Marks into Brands: How Advertising Agencies Created
Brands in the Global Market Place, 1900–1930" CGR Working Paper, Queen Mary University,
London, 18 August 2008
18. Kara, A. and Kaynak, E., "Markets of a Single Customer: Exploiting Conceptual Developments
in Market Segmentation", European Journal of Marketing, vol. 31, no. 11/12, 1997, pp. 873–
895, DOI: https://dx.doi.org/10.1108/03090569710190587
19. Firat, A.F. and Shultz, C.J., "From Segmentation to Fragmentation: Markets and Marketing
Strategy in the Postmodern Era," European Journal of Marketing, vol. 31 no. 3/4, 1997, pp 183-
207
20. Hoek, J., Gendall, P. and Esslemont, D., Market segmentation: A search for the Holy Grail?,
Journal of Marketing Practice Applied Marketing Science, Vol. 2, no. 1, pp. 25–34, 1996
21. Addison, T. and O'Donohue, M., "Understanding the Customer’s Relationship With a Brand:
The Role of Market Segmentation in Building Stronger Brands," Market Research Society
Conference, London, 2001, Online: http://www.warc.com/fulltext/MRS/49705.htm
22. Kennedy, R. and Ehrenberg, A., "What’s in a brand?" Research, April, 2000, pp 30–32
23. Bardakci, A. and Whitelock, L., "Mass-customisation in Marketing: The Consumer Perspective,"
Journal of Consumer Marketing vol. 20, no.5, 2003, pp. 463–479.
24. Smit, E. G. and Niejens, P. C., 2000. "Segmentation Based on Affinity for Advertising," Journal
of Advertising Research, vol. 40, no. 4, 2000, pp. 35–43.
25. Albaum, G. and Hawkins, D. I., "Geographic Mobility and Demographic and Socioeconomic
Market Segmentation," Journal of the Academy of Marketing Science, vol. 11, no. 2. 1983, pp.
97–114.
26. Blocker, C. P. and Flint, D. J., 2007. "Customer Segments as Moving Targets: Integrating
Customer Value Dynamism into Segment Instability Logic," Industrial Market Management, vol.
36, no. 6., 2007, pp. 810–822.
27. Board, T. "Ten Lessons Learned from Cybersegmentation," Technology & Communications
practice for IIR – The Market Research Event IPSOS Insight. 2004 [On-line]
http://www.ipsosinsight.com/pdf/IpsosInsight_PD_TenTips.pdf
28. Yankelovich, D., Meer, D. "Rediscovering Market Segmentation", Harvard Business Review
vol. 84. no 2, 2006, pp. 122–13
29. Business Dictionary Online: http://www.businessdictionary.com/definition/undifferentiated-
marketing.html
30. Based on Weinstein, A., Market Segmentation Handbook: Strategic Targeting for Business and
Technology Firms, 3rd ed., Haworth Press, Binghamton, N.Y., 2004, p. 12
31. Claessens, Maximilian. "Market Targeting - Targeting Market Segments effectively" (https://mark
eting-insider.eu/marketing-explained/part-i-defining-marketing-and-the-marketing-process/mark
et-targeting/). Marketing-Insider. Retrieved 17 October 2020.
32. Moutinho, L., "Segmentation, Targeting, Positioning and Strategic Marketing," Chapter 5 in
Strategic Management in Tourism, Moutinho, L. (ed), CAB International, 2000, pp. 121–166.
33. Lesser, B. and Vagianos, L. Computer Communications and the Mass Market in Canada,
Institute for Research on Public Policy, 1985, p. 37.
34. Mauboussin, M.J. and Callahan, D., Total Addressable Market: Methods to Estimate a
Company's Potential Sales, [Occasional Paper], Credit-Suisse – Global Financial Strategies, 1
September 2015
35. See for example, Lilien,G., Rangaswamy, A. and Van den Bulte, C., “Diffusion Models:
Managerial Applications and Software,” ISBM Report 7, May 20, 1999.
36. Sarin, S., Market Segmentation and Targeting, Wiley International Encyclopedia of Marketing,
2010
37. Gavett, G., "What You Need to Know About Segmentation," Harvard Business Review, Online:
July 09, 2014 https://hbr.org/2014/07/what-you-need-to-know-about-segmentation
38. Wedel,M. and Kamakura, W.A., Market Segmentation: Conceptual and Methodological
Foundations, Springer Science & Business Media, 2010, pp 4-5.
39. In the early 1980s, Australian fashion designer, Maggie T, was the recipient of a Hoover Award
for a segmentation study which showed that women with dress size 16+ underspent on clothes
because they were unable to find suitable garments. This insight led to the establishment of
'plus-sized' fashion outlets. The case study reported in Australian Marketing Projects: the
Hoover Award for Marketing, West Ryde, Australia, 1982
40. Wedel,M. and Kamakura, W.A., Market Segmentation: Conceptual and Methodological
Foundations, Springer Science & Business Media, 2010, pp 8-9
41. 'What is geographic segmentation' Kotler, Philip, and Kevin Lane Keller. Marketing
Management. Prentice-Hall, 2006. ISBN 978-0-13-145757-7
42. Doos, L. Uttley, J. and Onyia, I., "Mosaic segmentation, COPD and CHF multimorbidity and
hospital admission costs: a clinical linkage study," Journal of Public Health, Vo. 36, no. 2, 2014,
pp. 317–324
43. Reid, Robert D.; Bojanic, David C. (2009). Hospitality Marketing Management (https://books.go
ogle.com/books?id=wZUFreNHOWsC) (Fifth ed.). John Wiley and Sons. p. 139. ISBN 978-0-
470-08858-6. Retrieved 2013-06-08.
44. Baker, M., The Marketing Book, 5th ed, Oxford, Butterworth-Heinemann, 2003, p.709
45. Sarin, S., Market Segmentation and Targeting, Wiley International Encyclopedia of Marketing,
Vol. 1
46. Sara C. Parks PhD & Frederick J. Demicco, "Age- and Gender-Based Market Segmentation: A
Structural Understanding,"International Journal of Hospitality & Tourism Administration, Vol. 3,
No. 1, 2002, DOI: https://dx.doi.org/10.1300/J149v03n01_01
47. Tynan, A.N and Drayton, J., "Market segmentation," Journal of Marketing Management, Vol. 2,
No. 3, 1987, DOI:https://dx.doi.org/10.1080/0267257X.1987.9964020
48. Coleman, R., “The Continuing Significance of Social Class to Marketing.” Journal of Consumer
Research, Vol. 10, 1983, pp 265-280
49. Gilly, M.C. and Enis, B.M., "Recycling the Family Life Cycle: a Proposal For Redefinition", in
Advances in Consumer Research, Vol. 09, Andrew Mitchell (ed.), Ann Abor, MI: Association for
Consumer Research, pp 271-276, Direct
URL:http://acrwebsite.org/volumes/6007/volumes/v09/NA-09
50. Boushey, H., Finding Time, Boushey, 2016
51. Courtwright, D.T., No Right Turn, Harvard University Press, 2010, p. 147
52. Dension, D. and Hogg, R., (eds), A History of the English Language, Cambridge, Cambridge
University Press, 2008, p. 270
53. Thorne, T., Dictionary of Contemporary Slang, 4th ed, London, Bloomsbury, 2014,
54. Burridge, K., Blooming English: Observations on the Roots, Cultivation and Hybrids of the
English Language, Cambridge, Cambridge University Press, 2004, pp. 54–55
55. "Market Segmentation and Targeting" (https://web.archive.org/web/20140801023550/http://aca
demic.brooklyn.cuny.edu/economic/friedman/mmmarketsegmentation.htm).
Academic.brooklyn.cuny.edu. 2011. Archived from the original (http://academic.brooklyn.cuny.e
du/economic/friedman/mmmarketsegmentation.htm) on 1 August 2014. Retrieved 15 July 2014.
56. Wedel, M. and Kamakura, W.A., Market Segmentation: Conceptual and Methodological
Foundations, Springer Science & Business Media, 2010, pp 10-15
57. Philip Kotler and Gary Armstrong, Principles of Marketing, Pearson, 2014; 2012
58. Burrows, D., "Is behavioural data killing off demographics?" Marketing Week,4 September
2015
59. Kotler, P., Marketing Management: Planning, Analysis, Implementation and Control, 9th ed.,
Upper Saddle River, Pearson, 1991
60. Dolnicar, Sara; Grün, Bettina; Leisch, Friedrich (2018-07-20). Market Segmentation Analysis:
Understanding It, Doing It, and Making It Useful (https://books.google.com/books?id=b-1lDwAA
QBAJ&q=bases+for+segmenting+consumer+market). ISBN 9789811088186.
61. Clancy, K.J. and Roberts, M.L., "Towards an Optimal Market Target: A Strategy for Market
Segmentation", Journal of Consumer Marketing, vol. 1, no. 1, pp 64-73
62. Ahmad, R., "Benefit Segmentation: A potentially useful technique of segmenting and targeting
older consumers," International Journal of Market Research, Vol. 45, No. 3, 2003
63. Loker, L.E. and Perdue, R.R., "A Benefit–Based Segmentation," Journal of Travel Research,
Vol. 31, No. 1, 1992, pp. 30–35
64. Simkin, L., "Segmentation," in Baker, M.J. and Hart, S., The Marketing Book, 7th ed.,
Routledge, Oxon, UK, 2016, pp. 271–294
65. McCrindle, M., Generations Defined [Booklet] n.d. circa 2010 Online:
http://mccrindle.com.au/BlogRetrieve.aspx?
PostID=146968&A=SearchResult&SearchID=9599835&ObjectID=146968&ObjectType=55
66. Cran, C., The Art of Change Leadership: Driving Transformation In a Fast-Paced World, Wiley,
Hoboken, N.J. 2016, pp. 174–75
67. Salt, B., The Big Shift, South Yarra, Vic.: Hardie Grant Books, 2004 ISBN 978-1-74066-188-1
68. U.S. Census Bureau, American Fact Finder: Age Groups and Sex, 2010
69. McCrindle Research, Seriously Cool – Marketing & Communicating with Diverse Generations,
Norwest Business Park, Australia, n.d. c. 2010
70. Taylor, Paul; Gao, George (5 June 2014). "Generation X: America's neglected 'middle child' " (ht
tps://www.pewresearch.org/fact-tank/2014/06/05/generation-x-americas-neglected-middle-chil
d/). Pew Research Center. Retrieved 24 July 2018.
71. Ellson, T., Culture and Positioning as Determinants of Strategy: Personality and the Business
Organization, Springer, 2004
72. Gretchen Gavett, July 09/2014, What You Need to Know About Segmentation, Harvard
Business Review, accessed online 3/04/2017: [1] (https://hbr.org/2014/07/what-you-need-to-kn
ow-about-segmentation)
73. "Management Tools - Customer Relationship Management" (http://www.bain.com/publications/
articles/management-tools-customer-relationship-management.aspx). www.bain.com.
Retrieved 23 November 2015.
74. Forsyth, John E.; Lavoie, Johanne; McGuire, Tim. Segmenting the e-market. McKinsey
Quarterly. 2000, Issue 4, p14-18. 5p.
75. Marketing Insider, "Evaluating Market Segments", Online:
http://targetmarketsegmentation.com/target-market/secondary-target-markets/ Archived (https://
web.archive.org/web/20161023145354/http://targetmarketsegmentation.com/target-market/sec
ondary-target-markets/) 2016-10-23 at the Wayback Machine
76. Applbaum, K., The Marketing Era: From Professional Practice to Global Provisioning,
Routledge, 2004, p. 33-35
77. Ogilvy, David (1985). Ogilvy on advertising (First ed.). Vintage Books. ISBN 9780394729039.
78. Based on Belch, G., Belch, M.A, Kerr, G. and Powell, I., Advertising and Promotion
Management: An Integrated Marketing Communication Perspective, McGraw-Hill, Sydney,
Australia, 2009, pp. 205–206
79. Shapiro, B.P. and Bonoma, T.V., "How to Segment Industrial Markets," Harvard Business
Review, May 1984, Online: https://hbr.org/1984/05/how-to-segment-industrial-markets
80. Weinstein, A., Handbook of Market Segmentation: Strategic Targeting for Business and
Technology Firms, 3rd ed., Routledge, 2013, Chapter 4
81. "B2B Market Segmentation Research" (https://web.archive.org/web/20150412033909/http://ww
w.circle-research.com/wp-content/uploads/B2B-market-segmentation-research.pdf) (PDF).
Circle Research. Circle Research. Archived from the original (http://www.circle-research.com/w
p-content/uploads/B2B-market-segmentation-research.pdf) (PDF) on 12 April 2015. Retrieved
9 June 2015.
82. Gupta, Sunil. Lehmann, Donald R. Managing Customers as Investments: The Strategic Value
of Customers in the Long Run, pp. 70–77 (“Customer Retention” section). Upper Saddle River,
NJ: Pearson Education/Wharton School Publishing, 2005. ISBN 0-13-142895-0
83. Goldstein, Doug. “What is Customer Segmentation?” (http://mindofmarketing.net/2012/05/what-i
s-customer-segmentation/) MindofMarketing.net, May 2007. New York, NY.
84. Hunt, Shelby; Arnett, Dennis (16 June 2004). "Market Segmentation Strategy, Competitive
Advantage, and Public Policy". 12 (1). Australasian Marketing Journal: 1–25.
CiteSeerX 10.1.1.199.3118 (https://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.199.311
8).
85. Myers, J.H., Segmentation and Positioning for Strategic Marketing Decisions, American
Marketing Association, 1996
86. Market Research Association, Glossary of Terms,
Online:http://www.marketingresearch.org/issues-policies/glossary
87. Wedel, M. and Kamakura, W.A., Market Segmentation: Conceptual and Methodological
Foundations, Springer Science & Business Media, 2010, pp 22-23.
88. Wedel, M. and Kamakura, W.A., Market Segmentation: Conceptual and Methodological
Foundations, Springer Science & Business Media, 2010, pp 24-26.
89. Constantin, C., "Post-hoc Segmentation using Marketing Research," Economics, Vol 12, no 3,
2012, pp. 39–48.
90. http://evgeniou,T., Cluster Analysis and Segmentation, Online:
inseaddataanalytics.github.io/INSEADAnalytics/Report_s45.html [with worked example]
91. Desarbo, W.S., Ramaswamy, V. and Cohen, S. H., "Market segmentation with choice-based
conjoint analysis," Marketing Letters, vol. 6, no. 2 pp. 137–147.
92. Perbert, F., Stenger, B. and Maki, A., "Random Forest Clustering and Application to Video
Segmentation," [Research Paper], Toshiba Europe, 2009, Online:
https://mi.eng.cam.ac.uk/~bdrs2/papers/perbet_bmvc09.pdf
93. Dell Software, Statistics Textbook, Online:
https://documents.software.dell.com/statistics/textbook/customer-segmentation Archived (http
s://web.archive.org/web/20161022161158/https://documents.software.dell.com/statistics/textbo
ok/customer-segmentation) 2016-10-22 at the Wayback Machine
94. Minhas, R.S. and Jacobs, E.M., "Benefit Segmentation by Factor Analysis: An improved
method of targeting customers for financial services", International Journal of Bank Marketing,
Vol. 14, no. 3, pp. 3–13.
95. Wedel, M. and Kamakura, W.A., Market Segmentation: Conceptual and Methodological
Foundations, Springer Science & Business Media, 2010, p. 21.
96. Burinskiene, M. and Rudzkiene, V., "Application of Logit Regression Models for the
Identification of Market Segments", Journal of Business Economics and Management, vol. 8,
no. 4, 2008, pp. 253–258.
97. T.P. Beane and D.M. Ennis, "Market Segmentation: A Review", European Journal of Marketing,
Vol. 21 no. 5, pp. 20–42.
98. Green, P.E., Carmone, F.J. and Wachspress, D.P., Consumer Segmentation Via Latent Class
Analysis, Journal of Consumer Research, December, 1976, pp. 170–174, DOI:
https://dx.doi.org/10.1086/208664
99. Swait, J., "A structural equation model of latent segmentation and product choice for cross-
sectional revealed preference choice data," Journal of Retailing and Consumer Services, Vol.
1, no. 2, 1994, pp. 77–89.
00. Kelly E Fish, K.E., Barnes, J.H. and Aiken, M.W., "Artificial neural networks: A new
methodology for industrial market segmentation," Industrial Marketing Management, Vol. 24,
no. 5, 1995, pp. 431–438.
01. US Government, Small Business Administration, Online:
https://www.sba.gov/blogs/conducting-market-research-here-are-5-official-sources-free-data-
can-help
02. Marr, C., "Big Data: 33 Brilliant and Ad Free Data Sources for 2016," Forbes, 12 February
2016, Online: https://www.forbes.com/sites/bernardmarr/2016/02/12/big-data-35-brilliant-and-
free-data-sources-for-2016/#7ef90b046796
03. Wedel, M. and Wagner, A., Market Segmentation: Conceptual and Methodological
Foundations, Kluwer Academic Publishers, 1998, See Chapter 14
04. For an excellent discussion of ACORN, see Chris Fill, Marketing Communications: Framework,
Theories and Application, London, Prentice-Hall, 1995, p. 70 and P.R. Smith, Marketing
Communications: An Integrated Approach, London, Kogan Page, 1996, p. 126; Stone et al,
Fundamentals of Marketing, Routledge, 2007, Chapter 6; Wedel and Wagner, Market
Segmentation: Conceptual and Methodological Foundations, pp 250-256; Baker, M., The
Marketing Book, Oxford, UK, Butterworth-Heinemann, 2003, pp 258-263
05. Weinstein & Cahill, Lifestyle Segmentation, 2006, Chapter 4
06. Chitty et al, Integrated Marketing Communications, 3rd Asia-Pacific ed., Cengage, pp 83-89
and p. 95; Eunson, B., Communicating in the 21st Century, 2nd ed., Wiley,p. 8.8; Phillip Kotler
et al, Marketing Pearson, Australia, 2013, pp 196-7
External links
Retrieved from "https://en.wikipedia.org/w/index.php?title=Market_segmentation&oldid=996113564"
Text is available under the Creative Commons Attribution-ShareAlike License; additional terms may apply. By using this
site, you agree to the Terms of Use and Privacy Policy. Wikipedia® is a registered trademark of the Wikimedia
Foundation, Inc., a non-profit organization.