Market segmentation: An integrated framework

Long Range Planning

Volumn 29, Issue 6, 1996, Pages 797-811

  Datta, Y ^a  

^a NORTHERN KENTUCKY UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

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EID: 0042540145     PISSN: 00246301     EISSN: None     Source Type: Journal    
DOI: 10.1016/S0024-6301(97)82817-8     Document Type: Article

References (67)

1. B. J. Pine II, D. Peppers and M. Rogers, Do you want to keep your customers forever?, Harvard Business Review, March-April, 103-114 (1995). Also see the major findings of an international survey of marketing and general managers reported by K. Kashani, Marketing futures: priorities for a turbulent environment, Long Range Planning, August, 87-98 (1995).
2. B. J. Pine II, D. Peppers and M. Rogers, Do you want to keep your customers forever?, Harvard Business Review, March-April, 103-114 (1995). Also see the major findings of an international survey of marketing and general managers reported by K. Kashani, Marketing futures: priorities for a turbulent environment, Long Range Planning, August, 87-98 (1995).
3. S. Wozniak, How we failed Apple, Newsweek, 19 February, 48 (1996); D. Gelernter, Computer lesson, New York Times, 11 February, E 15 (1996); Business Week, The fall of an American icon, 5 February, 34-42 (1996); S. Levy, How Apple became Avis, Newsweek, 21 August, 42 (1995); J. A. Sculley (with J. A. Byrne), Odyssey, Chapter 6, Harper & Row, New York (1987).
4. S. Wozniak, How we failed Apple, Newsweek, 19 February, 48 (1996); D. Gelernter, Computer lesson, New York Times, 11 February, E 15 (1996); Business Week, The fall of an American icon, 5 February, 34-42 (1996); S. Levy, How Apple became Avis, Newsweek, 21 August, 42 (1995); J. A. Sculley (with J. A. Byrne), Odyssey, Chapter 6, Harper & Row, New York (1987).
5. S. Wozniak, How we failed Apple, Newsweek, 19 February, 48 (1996); D. Gelernter, Computer lesson, New York Times, 11 February, E 15 (1996); Business Week, The fall of an American icon, 5 February, 34-42 (1996); S. Levy, How Apple became Avis, Newsweek, 21 August, 42 (1995); J. A. Sculley (with J. A. Byrne), Odyssey, Chapter 6, Harper & Row, New York (1987).
6. S. Wozniak, How we failed Apple, Newsweek, 19 February, 48 (1996); D. Gelernter, Computer lesson, New York Times, 11 February, E 15 (1996); Business Week, The fall of an American icon, 5 February, 34-42 (1996); S. Levy, How Apple became Avis, Newsweek, 21 August, 42 (1995); J. A. Sculley (with J. A. Byrne), Odyssey, Chapter 6, Harper & Row, New York (1987).
7. S. Wozniak, How we failed Apple, Newsweek, 19 February, 48 (1996); D. Gelernter, Computer lesson, New York Times, 11 February, E 15 (1996); Business Week, The fall of an American icon, 5 February, 34-42 (1996); S. Levy, How Apple became Avis, Newsweek, 21 August, 42 (1995); J. A. Sculley (with J. A. Byrne), Odyssey, Chapter 6, Harper & Row, New York (1987).
8. P. Passell, Why the best doesn't always win, New York Times Magazine, 5 May, 60-61 (1996). Economists call this phenomenon a case of 'path dependence' [For an explanation of this concept see P. Krugman, Peddling Prosperity, Chapter 9, W. W. Norton & Co., New York (1994).] For another example of its occurrence seethe discussion on VHS versus Betamax later in this article.
9. P. Passell, Why the best doesn't always win, New York Times Magazine, 5 May, 60-61 (1996). Economists call this phenomenon a case of 'path dependence' [For an explanation of this concept see P. Krugman, Peddling Prosperity, Chapter 9, W. W. Norton & Co., New York (1994).] For another example of its occurrence seethe discussion on VHS versus Betamax later in this article.
10. P. R. Dickson, Marketing Management, p. 433, Dryden Press (1994); Church & Dwight Co., It scores big with the brand-name pull of Arm & Hammer, Barrons, 10 December, 49-50 (1990); The sound and the fluoride, Business Week, 14 August, 48 (1995); The truth about toothpaste, 20/20 Programme, ABC News (1996); Toothpaste, Consumer Reports, September, 602-606 (1992).
11. P. R. Dickson, Marketing Management, p. 433, Dryden Press (1994); Church & Dwight Co., It scores big with the brand-name pull of Arm & Hammer, Barrons, 10 December, 49-50 (1990); The sound and the fluoride, Business Week, 14 August, 48 (1995); The truth about toothpaste, 20/20 Programme, ABC News (1996); Toothpaste, Consumer Reports, September, 602-606 (1992).
12. P. R. Dickson, Marketing Management, p. 433, Dryden Press (1994); Church & Dwight Co., It scores big with the brand-name pull of Arm & Hammer, Barrons, 10 December, 49-50 (1990); The sound and the fluoride, Business Week, 14 August, 48 (1995); The truth about toothpaste, 20/20 Programme, ABC News (1996); Toothpaste, Consumer Reports, September, 602-606 (1992).
13. P. R. Dickson, Marketing Management, p. 433, Dryden Press (1994); Church & Dwight Co., It scores big with the brand-name pull of Arm & Hammer, Barrons, 10 December, 49-50 (1990); The sound and the fluoride, Business Week, 14 August, 48 (1995); The truth about toothpaste, 20/20 Programme, ABC News (1996); Toothpaste, Consumer Reports, September, 602-606 (1992).
14. P. R. Dickson, Marketing Management, p. 433, Dryden Press (1994); Church & Dwight Co., It scores big with the brand-name pull of Arm & Hammer, Barrons, 10 December, 49-50 (1990); The sound and the fluoride, Business Week, 14 August, 48 (1995); The truth about toothpaste, 20/20 Programme, ABC News (1996); Toothpaste, Consumer Reports, September, 602-606 (1992).
15. Atypical example is P. Kotler, Marketing Management, 8th Edition, Chapter 11, p. 7, Prentice-Hall, Englewood Cliffs, NJ (1994).
16. The integrated approach to market segmentation advocated in this article is similar to what M. E. Porter calls 'industry' segmentation. However, while Porter (p. 5) has placed substitutes outside the boundary of an industry, we have included them inside. Furthermore, this article is more comprehensive in scope; see Competitive Advantage, Free Press, New York (1985). A. E. Boardman and A. R. Vining, in proposing product-customer matrices, also advocate a similar approach; see Defining your business using product-customer matrices, Long Range Planning 29(1), 38-48 (1996).
17. The integrated approach to market segmentation advocated in this article is similar to what M. E. Porter calls 'industry' segmentation. However, while Porter (p. 5) has placed substitutes outside the boundary of an industry, we have included them inside. Furthermore, this article is more comprehensive in scope; see Competitive Advantage, Free Press, New York (1985). A. E. Boardman and A. R. Vining, in proposing product-customer matrices, also advocate a similar approach; see Defining your business using product-customer matrices, Long Range Planning 29(1), 38-48 (1996).
18. P. R. Dickson and J. L. Ginter, Market segmentation, product differentiation, and marketing strategy. Journal of Marketing, April, 1-10 (1987); S. P. Schnaars, Marketing Strategy: A Customer-driven Approach, pp. 142-151, Free Press, New York (1991).
19. P. R. Dickson and J. L. Ginter, Market segmentation, product differentiation, and marketing strategy. Journal of Marketing, April, 1-10 (1987); S. P. Schnaars, Marketing Strategy: A Customer-driven Approach, pp. 142-151, Free Press, New York (1991).
20. Kim Warren suggests the need for building future industry scenarios in today's environment of change and uncertainty. He says such a scenario must be built around the strategic actions of all major competitors in the industry, and should explore what the future might be and how the firm's own actions might affect that future. See Exploring competitive futures using cognitive mapping, Long Range Planning, October, 10-21 (1995).
21. P. R. Dickson, Person-situation: segmentation's missing link, Journal of Marketing, Fall, 56-64 (1982); R. K. Srivastava, M. I. Alpert and A. D. Shocker, A customer-oriented approach for determining market structures, Journal of Marketing, Spring, 32-45 (1984); F. W. Winter, Market segmentation: a tactical approach, Business Horizons, January-February, 57-63 (1984).
22. P. R. Dickson, Person-situation: segmentation's missing link, Journal of Marketing, Fall, 56-64 (1982); R. K. Srivastava, M. I. Alpert and A. D. Shocker, A customer-oriented approach for determining market structures, Journal of Marketing, Spring, 32-45 (1984); F. W. Winter, Market segmentation: a tactical approach, Business Horizons, January-February, 57-63 (1984).
23. P. R. Dickson, Person-situation: segmentation's missing link, Journal of Marketing, Fall, 56-64 (1982); R. K. Srivastava, M. I. Alpert and A. D. Shocker, A customer-oriented approach for determining market structures, Journal of Marketing, Spring, 32-45 (1984); F. W. Winter, Market segmentation: a tactical approach, Business Horizons, January-February, 57-63 (1984).
24. For demographics, social class and psychographics respectively, see Winter op. cit., Kotler op. cit. and Dickson (1982) op. cit.
25. For demographics, social class and psychographics respectively, see Winter op. cit., Kotler op. cit. and Dickson (1982) op. cit.
26. For demographics, social class and psychographics respectively, see Winter op. cit., Kotler op. cit. and Dickson (1982) op. cit.
27. D. J. Collis and C. A. Montgomery, Competing on resources: strategy in the 1990s, Harvard Business Review, July-August, 118-128 (1995); G. Hamel and C. K. Prahalad, Competing for the Future-⋯;-, Chapters 4, 7, 9 and 11, Harvard Business School Press, Cambridge, MA; G. Stalk, P. Evans and L. E. Shulman, Competing on capabilities: the new rules of corporate strategy, Harvard Business Review, March-April, 57-69 (1992); A. V. Snyder and H. W. Ebeling Jr, Targeting a company's real core competencies. Journal of Business Strategy, November-December, 26-32 (1992); R. M. Grant, The resource-based theory of competitive advantage: implications for strategy formulation, California Management Review, Spring, 114-135 (1991).
28. D. J. Collis and C. A. Montgomery, Competing on resources: strategy in the 1990s, Harvard Business Review, July-August, 118-128 (1995); G. Hamel and C. K. Prahalad, Competing for the Future-⋯;-, Chapters 4, 7, 9 and 11, Harvard Business School Press, Cambridge, MA; G. Stalk, P. Evans and L. E. Shulman, Competing on capabilities: the new rules of corporate strategy, Harvard Business Review, March-April, 57-69 (1992); A. V. Snyder and H. W. Ebeling Jr, Targeting a company's real core competencies. Journal of Business Strategy, November-December, 26-32 (1992); R. M. Grant, The resource-based theory of competitive advantage: implications for strategy formulation, California Management Review, Spring, 114-135 (1991).
29. D. J. Collis and C. A. Montgomery, Competing on resources: strategy in the 1990s, Harvard Business Review, July-August, 118-128 (1995); G. Hamel and C. K. Prahalad, Competing for the Future-⋯;-, Chapters 4, 7, 9 and 11, Harvard Business School Press, Cambridge, MA; G. Stalk, P. Evans and L. E. Shulman, Competing on capabilities: the new rules of corporate strategy, Harvard Business Review, March-April, 57-69 (1992); A. V. Snyder and H. W. Ebeling Jr, Targeting a company's real core competencies. Journal of Business Strategy, November-December, 26-32 (1992); R. M. Grant, The resource-based theory of competitive advantage: implications for strategy formulation, California Management Review, Spring, 114-135 (1991).
30. D. J. Collis and C. A. Montgomery, Competing on resources: strategy in the 1990s, Harvard Business Review, July-August, 118-128 (1995); G. Hamel and C. K. Prahalad, Competing for the Future-⋯;-, Chapters 4, 7, 9 and 11, Harvard Business School Press, Cambridge, MA; G. Stalk, P. Evans and L. E. Shulman, Competing on capabilities: the new rules of corporate strategy, Harvard Business Review, March-April, 57-69 (1992); A. V. Snyder and H. W. Ebeling Jr, Targeting a company's real core competencies. Journal of Business Strategy, November-December, 26-32 (1992); R. M. Grant, The resource-based theory of competitive advantage: implications for strategy formulation, California Management Review, Spring, 114-135 (1991).
31. D. J. Collis and C. A. Montgomery, Competing on resources: strategy in the 1990s, Harvard Business Review, July-August, 118-128 (1995); G. Hamel and C. K. Prahalad, Competing for the Future-⋯;-, Chapters 4, 7, 9 and 11, Harvard Business School Press, Cambridge, MA; G. Stalk, P. Evans and L. E. Shulman, Competing on capabilities: the new rules of corporate strategy, Harvard Business Review, March-April, 57-69 (1992); A. V. Snyder and H. W. Ebeling Jr, Targeting a company's real core competencies. Journal of Business Strategy, November-December, 26-32 (1992); R. M. Grant, The resource-based theory of competitive advantage: implications for strategy formulation, California Management Review, Spring, 114-135 (1991).
32. R. D. Buzzell and B. T. Gale, The PIMS Principles: Linking Strategy to Performance, Free Press, New York (1987); B. T. Gale, Quality comes first when hatching power brands, Planning Review, July-August, 4-9 and 48 (1992).
33. R. D. Buzzell and B. T. Gale, The PIMS Principles: Linking Strategy to Performance, Free Press, New York (1987); B. T. Gale, Quality comes first when hatching power brands, Planning Review, July-August, 4-9 and 48 (1992).
34. A. Reis, Focus: the Future of Your Company Depends On It. Chapter 12, HarperBusiness, New York (1996); A. P. Sloan, My Years with General Motors, pp. 73-74, Anchor Books, Garden City, NY (1972). Originally, Sloan offered GM's cars in six price-quality segments.
35. A. Reis, Focus: the Future of Your Company Depends On It. Chapter 12, HarperBusiness, New York (1996); A. P. Sloan, My Years with General Motors, pp. 73-74, Anchor Books, Garden City, NY (1972). Originally, Sloan offered GM's cars in six price-quality segments.
36. The source of the Whirlpool Corporation's strategic move is the Keynote Address by its CEO, D. R. Whitwam, delivered at the 1989 International Conference, Planning Forum (1989). For the Maytag Co. see R. L. Rose, Maytag's acquisitions don't wear as well as washers and dryers, Wall St. Journal, 31 January, A1 and A6 (1991).
37. The source of the Whirlpool Corporation's strategic move is the Keynote Address by its CEO, D. R. Whitwam, delivered at the 1989 International Conference, Planning Forum (1989). For the Maytag Co. see R. L. Rose, Maytag's acquisitions don't wear as well as washers and dryers, Wall St. Journal, 31 January, A1 and A6 (1991).
38. For Marriott's diversification into the mid-price and economy segments see B. Gillette, Conservative approach fuels Marriott's success. Hotel and Motel Management, 19 June, 3, 58-59 and 91 (1989). For positioning Fairfield Inn see T. W. Leigh, Competitive assessment in service industries, Planning Review, January-February, 10-19 (1989). In this case study Leigh talks about the fictional Grinstead Inn. There seems little doubt that the real actor behind this feeble disguise is Marriott's Fairfield Inn.
39. For Marriott's diversification into the mid-price and economy segments see B. Gillette, Conservative approach fuels Marriott's success. Hotel and Motel Management, 19 June, 3, 58-59 and 91 (1989). For positioning Fairfield Inn see T. W. Leigh, Competitive assessment in service industries, Planning Review, January-February, 10-19 (1989). In this case study Leigh talks about the fictional Grinstead Inn. There seems little doubt that the real actor behind this feeble disguise is Marriott's Fairfield Inn.
40. C. Bowman and D. Faulkner, Measuring product advantage using competitive benchmarking and customer perceptions, Long Range Planning, February, 119-132 (1994).
41. D. A. Garvin, Managing Quality: the Strategic and Competitive Edge, Free Press, New York (1988).
42. D. A. Aaker, Managing assets and skills: the key to a sustainable competitive advantage, California Management Review, Winter, 91-106 (1989).
43. Snyder and Ebeling op cit.
44. Hamel and Prahalad op cit. Also see A. Reis and J. Trout, Positioning: the Battle for Your Mind, McGraw-Hill, New York (1981).
45. Hamel and Prahalad op cit. Also see A. Reis and J. Trout, Positioning: the Battle for Your Mind, McGraw-Hill, New York (1981).
46. T. Oliver, The Real Coke, The Real Story, Random House, New York (1986).
47. Reis and Trout op cit.
48. This definition has been adapted from the criteria Drucker has specified for using technology as a common core of unity for diversification; see P. F. Drucker, Management: Tasks, Responsibilities, Practices, Chapter 57, Harper & Row, New York (1974).
49. D. F. Abell, Defining the Business: the Starting Point of Strategic Planning, Chapter 2, Prentice-Hall, Englewood Cliffs, NJ (1980).
50. R. S. Sisodia, Competitive advantage through design, Journal of Business Strategy, November-December, 33-40 (1992); P. M. Senge, The leader's new work: building learning organizations, Sloan Management Review, Fall, 7-23 (1990).
51. R. S. Sisodia, Competitive advantage through design, Journal of Business Strategy, November-December, 33-40 (1992); P. M. Senge, The leader's new work: building learning organizations, Sloan Management Review, Fall, 7-23 (1990).
52. For example see R. Cooper and W. B. Chew, Control tomorrow's costs through today's designs, Harvard Business Review, January-February, 88-97 (1996); Kashani op cit.
53. For example see R. Cooper and W. B. Chew, Control tomorrow's costs through today's designs, Harvard Business Review, January-February, 88-97 (1996); Kashani op cit.
54. P. R Nayak and J. M. Ketteringham, Break-throughs!, Chapter 2, Revised Edition, Pfeiffer, Munich (1994); R. T. Pascale and A. G. Athos, The Art of Japanese Management, p. 41, Warner Books, Detroit, MI (1981).
55. P. R Nayak and J. M. Ketteringham, Break-throughs!, Chapter 2, Revised Edition, Pfeiffer, Munich (1994); R. T. Pascale and A. G. Athos, The Art of Japanese Management, p. 41, Warner Books, Detroit, MI (1981).
56. B. P. Shapiro and T. V. Bonoma, How to segment industrial markets, Harvard Business Review, May-June, 104-110 (1984).
57. Guy de Moubray, Banking is not like selling toothpaste, Long Range Planning, October, 68-74 (1991).
58. Dickson and Ginter, op cit.
59. R. I. Haley, Benefit segmentation: a decision-oriented research tool, Journal of Marketing, July, 30-35 (1968).
60. R. K. Regerand A. S. Huff, Strategic groups: a cognitive perspective. Strategic Management Journal 14, 103-124 (1993); C. Carroll, P. M. Lewis and H. Thomas, Developing competitive strategies in retailing, Long Range Planning, April, 81-88 (1992).
61. R. K. Regerand A. S. Huff, Strategic groups: a cognitive perspective. Strategic Management Journal 14, 103-124 (1993); C. Carroll, P. M. Lewis and H. Thomas, Developing competitive strategies in retailing, Long Range Planning, April, 81-88 (1992).
62. Business Week (1995) op cit.; ABC News op cit.
63. Business Week (1995) op cit.; ABC News op cit.
64. H. Mintzberg, The Rise and Fall of Strategic Planning, Chapter 5, Free Press, New York (1994).
65. V. Tang and E. Collar, IBM AS/400 new product launch process ensures satisfaction, Long Range Planning, February, 22-27 (1992).
66. T. M. Pavia, Using marketing models in strategic planning, Long Range Planning, October, 59-67 (1991).
67. Carroll etal., op cit.