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Benefit Segmentation

In: Business and Management

Submitted By stevenchung
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by Russell I. Haley

Benefit Segmentation: A Decision-Oriented Research Tool
Marketing insight is limited only by the imagination.

M

arket segmentation has been steadily moving toward center stage as a topic of discussion in marketing and research circles. The idea that all markets can be profitably segmented has now received almost as widespread acceptance as the marketing concept itself. However, problems remain. In the extreme, a marketer can divide up his market in as many ways as he can describe his prospects. If he wishes, he can define a left-handed segment or a blue-eyed segment or a German-speaking segment. Consequently, current discussion revolves largely around which of the virtually limitless alternatives is likely to be most productive. Several varieties of market segmentation have been popular in the recent past. At least three kinds have achieved some degree of prominence: geographic, demographic, and volume segmentation. Perhaps the first type to exist was geographic segmentation. Small manufacturers who wished to limit their investments, or whose distribution channels were not large enough to cover the entire country, segmented the U.S, market, in effect, by selling their products only in certain areas. However, as more and more brands became national, the second major system of segmentation—demographic segmentation—became popular. Under this philosophy, targets were defined as younger people, men, or families with children. Unfortunately, a number of recent studies have shown that demo-

graphic variables such as age, sex, income, occupation, and race are, in general, poor predictors of behavior and, consequently, less than optimum bases for segmentation strategies. More recently, a third type of segmentation has come into increasing favor: volume segmentation. The so-called "heavy half theory, popularized by Dik Twedt of the Oscar Meyer…...

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