I RESEARCH

METHODS

Segmentation Value Chain
Successful segmentation is based on research and depends on marketing execution.
By Gordon A. Wyner

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hat makes segmentation successful? Why does it work sometimes and fail other times? Why is the word segmentation banned in certain companies, while the approach is still used under names such as “strategic research”? Perhaps insufficient attention is paid to segmentation’s value for a company. What, from segmentation, is demonstrably useful? What’s lost if segmentation isn’t applied? Several drivers of value emerge in the practice of segmentation. Although it’s impossible to state precisely what constitutes best practices, experience provides some illustrative cases in which companies achieved valuable results.

Consumer Experience
One of the biggest challenges in segmentation is choosing dimensions or variables for differentiating consumers in the market. Some of the biggest decisions in research that support segmentation relate to basic research design—particularly which variables to measure among the relevant consumer population. The starting point often is consumer needs, demand drivers, and behaviors related to the product category. But trends in the marketplace have added dimensions that play significant roles in differentiating consumers. Channel proliferation has provided new ways for consumers to buy—ways that didn’t exist five or 10 years ago. Consumer access to products and services is much more open and easy via telephone, the Web, and recent new retail formats. How do consumers value 24/7 access from any place they can make a phone call, comparison price shopping in real time, greater assortments than ever, and delivery on a self-defined schedule? How do these factors influence their product choices in categories of goods?
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Media proliferation has presented new options for marketers, in