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be examined carefully to determine whether a seg- oriented lines are silverware, small appliances, fash-
mented marketing strategy is possible before large ion accessories, apparel, furniture, and automobiles.
sums of money are wasted on research that does not
In addition to the foregoing examples, other market-
address the marketing situation.
ing situations dictate a unique approach. For instance,
in a study for the National Highway Traffic Admin-
WHA T TO SEGMENT
istration to develop an advertising program to convince
persons to act to prevent a drunk person from driving,
After determining that the segmentation of the
respondents had to be segmented on the basis of their
market is the right strategy to pursue, the researcher
willingness to take specific action-e.g., drive a friend
must decide the basis on which to segment. Too often
home, take keys, stay over for the night.
this decision is made by examining several alternative
In the following sections, the authors discuss three
mathematical or statistical approaches in terms of
studies in which different methods of segmentation
which one can best reproduce itself. Though there
were used. The first one is an example of benefit
is much scientific argument for such a procedure,
segmentation which illustrates the complicated deci-
it fails to account for the marketing utility of a
sions necessary to ensure that the segmentation study
segmentation approach. Statistical considerations are
is tailored to the marketing problem. The other two
important only in assessing those alternatives that are
represent instances in which benefit segmentation
relevant from a marketing standpoint.
would not have been appropriate and in which product
In the authors' experience segmentation based on
usage by purpose and styling segmentation approaches
benefits desired is usually the most meaningful type
were required to address the marketing problem. No
to use from a marketing standpoint as it directly
example of pricing segmentation is discussed as this
facilitates product planning, positioning, and advertis-
approach is rather easy to implement with regular
ing communications. Though lifestyle, psychographic,
cross-tabular analysis.
or general attitudinal approaches work well statistical-
ly, they are not always helpful in marketing. CASE I. SEGMENTATION ON GENERIC
However, in several important situations a seg- BENEFITS
mentation analysis based on benefits is not relevant
The Canadian Government Office of Tourism de-
for marketing. Three common situations follow.
cided to conduct a marketing segmentation study of
1. Traditional price lines have developed so that all the U.S. travel market to obtain a comprehensive
marketing activities are based on price levels. For picture of Americans who are potential vacation trav-
certain products such as clothing, cosmetics, auto- elers to Canada.' Because Canada is a large, diverse
mobiles, and appliances, traditional price lines have country with many different aspects, it truly can be
developed to the extent that markets have become many things to many people. Therefore, a segmenta-
segmented into price lines. Because all product
tion approach was deemed desirable to ascertain the
offerings and marketing activities are contingent
upon the price line offered, marketing considerations
different groups of potential vacation travelers to
dictate that the market be segmented at least initially Canada and which aspects of Canadian vacations could
by price lines. For many product categories, the address their needs and desires. Once the segments
size of the market for any price line is too low had been identified and described, they could be
to permit further segmentation. evaluated in terms of the Canadian vacation business
2. The benefits desired are determined by the occasion potential they offered, and those segments deemed
orpurposefor which the product is used. The desires attractive enough to cultivate then could be addressed
of consumers can vary by the type of occasion for through advertising and promotion campaigns portray-
which the product is used. For example, clothes ing the advantages for a Canadian vacation of the
suitable for some occasions would not be suitable
specific type desired by the target segment(s).
for other occasions. For effective marketing, con-
However, because of the complexity of the travel
sumer desires must be segmented by usage occasion
to determine which products would be most suitable
and vacation business, certain conceptual problems
for each occasion. In many complex markets, this and issues had to be resolved in planning and executing
type of segmentation is necessary to derive the the study. Though most segmentation studies will not
underlying competitive framework. Conventional be as complicated as this one, it demonstrates the
segmentation questioning about the product without process the researcher must follow to resolve three
a specific usage occasion would provide meaningless critical issues before designing the questionnaire and
information. fielding the study: (1) who should be interviewed,
3. The style or appearance of the product is the overrid-
ing criterion of success. If fashion appeal is the
major consideration in marketing success, the mar-
keter must segment markets on the basis of styling 'The authors acknowledge Myron Rusk, Marketing Research
preference in order to market a successful line of Manager of the Canadian Travel Office, for granting permission
styles to each segment. Some examples of style- to include this study [13].
(2) the frame of reference for questioning, and (3) last vacation, respondents could be segmented on
alternative methods of segmentation. what they were seeking in a vacation of the last
Who should be interviewed. This critical consider- type taken.
ation must be addressed in all studies. Because the
A pilot study consisting of 200 interviews was
purpose of the travel study was to expand the number
developed to test the meaningfulness of each approach.
of Canadian vacations taken by U.S. travelers, it was
The last approach (desires sought in the last vacation)
insufficient to include only those persons who had
was found to be most meaningful in terms of marketing
been to Canada because they accounted for only 5%
and was the approach used in the major study.
of the U.S. population. Instead, it was necessary to
define relevant prospect groups to obtain new visitors Results
to Canada.
The major study consisted of 1,750 interviews with
Consideration of the profitability of various types
of tourists to Canada dictated a decision to interview
eligible respondents, i.e., those responsible for making
a decision about an extended vacation of at least
only those who had taken a vacation of at least a
three-fourths the distance to Canada during the last
week's duration in the past, and the vacation decision
three years. A national probability sample was used
maker was the specific person to be questioned.
with one callback on the household and one on the
Furthermore, the key analytical decision was dictated
eligible respondent.
by the knowledge that the distance people have trav-
A benefit segmentation was obtained for those
eled on past vacations is a strong indicator of how
desires sought in planning the most recent vacation
far they would be willing to travel on future vacations.
meeting the eligibility criteria. The technique of seg-
Therefore, the sample was designed to cover only
mentation was a Q-factor analysis. This approach
those persons who had traveled the requisite distance
consists of normalizing the profile of the respondents
for a Canadian vacation-definmed in the study as three
across all benefits to obtain groups of homogeneous
quarters of the distance to Canada.
respondents through principal components extraction
Frame of reference for questioning. This factor was
a particularly difficult problem for this study because of eigenvalues and their associated eigenvectors,
which subsequently are rotated by the varimax proce-
most individuals were potential prospects for more
dure [2-4, 8, 9, 12]. To facilitate the analysis and
than one type of vacation. To question about vacations
in general was not relevant as needs and desires would
vary by type of vacation. Also, asking about the ideal
vacation would likely yield fantasized wishes that
would have no relationship to the type of vacation Figure 1
a person would or could take. This problem was MAP OF THE SIX BENEFIT SEGMENTS
overcome by asking the respondent to anchor all
responses in terms of the last vacation taken. In this
way, responses were based on the reality of a specific
vacation experience for which behavioral and attitudi- CAMPING
EXPENSIVE t
SEGMENT - OUTDOOR VACATIONERS
lVO
most segmentation studies, this was the most critical
issue. Because the best way to segment or group U.S.
travelers for developing marketing programs was far
from obvious, the following alternative methods were
investigated. SEGMENT \
I IL
Canada. This approach could be most appropriate
if Canada were a single entity and if attitudes toward SEGMENT- FAMILY SIGHTSEERS
do not. ATMOSPHERE/NIGHTCLUBS.
EXCITING PLACE
development of alternative products were carried er similar to each other. The number of piles allowed
out to overcome the dissatisfactions obtained from for sorting usually is left up to the consumer within
the research. Second, alternative concepts/products some minimum or maximum range. The data are
were tested to determine whether these dissatis- analyzed by determining the frequency with which
factions had been overcome. Third, advertising each pair of items is sorted into the same pile. This
execution, point of display material, and dealer matrix of pairwise similarities then can be processed
merchandising programs were developed and tested. with a multidimensional scaling program such as
Finally, the entire marketing program was tested TORSCA to map clusters of styles into homogeneous
for one year. segments [6, 14].
As a result of these activities, the new product was Though this technique is particularly useful for
successfully introduced nationally. In the study, con- developing a broad overview of the overall styling
ventional benefits segments also were developed and structure as perceived by respondents, it does not
reported. However, they were not particularly helpful address the critical issue of individual styling prefer-
in the development of better positioning and products ences. For example, the respondent's preference
because of their inability to define the competitive structure may consist of selecting from different
environment for this product. styling groups rather than selecting among those
items within a specific styling cluster. Such selection
CA SE III. STYLING SEGMENTA TION
is particularly common for products for which there
For products in which the style, looks, appearance, is multiple purchasing.
or image is the overriding criterion of marketing 2. Rating in terms of preference or likelihood of buying.
This method of styling segmentation is more direct
success, benefit segmentation is not appropriate as
as it addresses the respondent's purchasing prefer-
it can indicate only that styling is important and gives
ence rather than his or her overall perception of
little direction as to what styles are actually preferred. a competitive structure.4 Although the preference
Some examples of categories in which styling problems ratings can be analyzed by means of R and Q factor
are critical are silverware, small appliances, fashion analysis, the Q mode is the one required to determine
accessories, apparel, automobiles, and furniture for the items that a seller should offer to insure that
which the marketer must decide how many and what all major preference segments of the market are
styles to offer the consumer in his line. covered adequately in a line offering. This analysis
The problem of line formulation can be approached is done in the same way as conventional Q seg-
in two ways. mentation except that style ratings are used instead
of benefit ratings.
1. Pile sorting in terms of similarity. By this approach, When the R mode factor analysis is undertaken,
respondents are asked to sort pictures, samples, or one obtains clusters of style items on preference
actual products into piles of those items they consid- dimensions. This approach is useful only in a prelim-
inary or pilot stage of research when the number
of items must be reduced to a more manageable
Table 1 proportion for subsequent rating by consumers.
AN EXAMPLE OF STYLING SEGMENTATION Even if an R analysis is performed, the Q segmenta-
tion and analysis should be based on the individual
items and not the clusters obtained from the R
Segment
analysis.
A B C Table I is a simplified illustration taken from a
Style number 60%? 30%" 10%" larger study of a Q factor analysis for a line of
(% indicating extremely likely items being considered by a marketer. The data were
to buy) obtained by asking each respondent to examine the
items and rate them according to likelihood of buying
3b 33 12 13 on a 6-point scale. The Q analysis identified three
4b 22 2 10
distinct segments of sufficient size to be relevant
1 16 13 15
9 13 5 8
for marketing purposes. To determine the styles
lOb 14 25 12 required in the line to cover adequately each of
2b 16 30 4 the basic segments, the percentage who indicated
8 4 16 5 they were "extremely likely to buy" each style was
7b 13 15 42 tabulated for each of the segments.
5 9 12 18 As indicated in Table 1, each segment can be
6 15 2 9 covered adequately by offering only five of the 10
Total percentage "likely t
for each segmentb 98 84 81
4It is also recognized that rank order preference data can be
aSegment size. obtained and mapped through the authors' techniques. It is experi-
'The total percentage "likelihood to ence buy" that for
the scaler
eachratings are more reliable
segment is indicators of purchase
obtained by summing the five styles (3,4,10,2, intent as ranking
anddoes7) not
thatdirectly measure buying intent, e.g.,
would
be offered in the line. It can exceed 100% as more than one style a person may not like any of the styles well enough to buy them
could be rated as "extremely likely to buy." or he may want to buy several of them.
items: for segment A, styles 3 and 4; for segment users, and (3) brands dominating a market.
B, styles I and 2; for segment C, style 7. When attitudinal segmentation is the appropriate
To determine the total buying likelihood, one can technique, the successful implementation of a study
sum each of the five styles for each of the segments. requires the solution of such issues as (1) whom to
In this illustration, as the total buying likelihood
interview, (2) the framework of questioning, and (3)
is 98% for segment A, 84% for segment B, and
the alternative methods of segmentation.
81 % for segment C, the entire market is well covered.
From this point, impact on coverage can be evaluated However, many situations requiring segmentation
by adding and dropping items in the line. For cannot be addressed through conventional approaches.
example, if style number I were added as a sixth For example:
item, there would be only a slight increase in buying 1. For products for which the usage situation dictates
likelihood for all three segments. preference, segmentation can be done best by simul-
taneously mapping usage situations by products used
Implementation
to develop the appropriate competitive framework.
The implementation of the results of styling seg- 2. For products for which styling is the major factor
mentation depends on the nature of the industry and the influencing marketing success, segmentation of styl-
competitive position of the firm. In this case, the ing preferences through Q factor analysis provides
firm was the dominant one and had to compete in the guidance necessary for determining the different
sets of prospects in the market with different sets
all three styling segments. However, a firm's competi-
of styling preferences, and the line of items required
tion might be chosen to permit competition in only to meet their needs.
one or two of the styling segments.
The following steps were taken in implementing the These examples represent only a few of the many
findings from this study. instances in which conventional segmentation is not
1. The product line, both in terms of the number of applicable. Much more emphasis needs to be placed
items to offer and the amounts of each to be on classifying competitive environments and those
manufactured, was obtained from the research. segmentation approaches that are most relevant. This
2. Point of purchase displays were rearranged to have process would be facilitated greatly by wider dissemi-
maximum impact and to stress those styles indicated nation of the practical experiences gained from seg-
by the research. mentation studies.
3. Through an analysis of demographic and psycho-
graphic data of the respondents in each styling
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