Citation:
Christine Bailey, Paul R Baines, Hugh Wilson, Moira Clark, Segmentation and Customer Insight in Contemporary Services Marketing Practice: Why Grouping Customers Is No Longer Enough, Journal of Marketing Management, Volume 25, Issue 3 & 4 April 2009, Pages 227-252
Abstract:
The bulk of market segmentation literature has concerned the generation of
segments, with far less attention on what segmentation is used for -
particularly surprising given the common speculations that the role of
segmentation is changing due to CRM practices and the wider range of forms of
customer insight which they enable. We explore market segmentation in the
services and product-service systems context through twenty-five interviews in
five UK-based companies, highlighting practical considerations in implementing
market segmentation programs (see Young, Ott and Feigin 1978, for a similar
early approach). Within this case set, market segmentation, using a variety of
segmentation bases, is still regarded as essential for customer selection,
proposition development and mass communication. Addressable and interactive
communications with individual customers, though, are increasingly based on
individualised customer analytics and propensity modelling, which aid the
determination of the likelihood of uptake of specific propositions. Events and
triggers informing companies of how to deal with customers individually are also
considered to be particularly effective rather than simple allocation of the
customer to a particular characteristic segment. Implications for theory and
practice in market segmentation are outlined and further research is called for
to explore this important area further.
