Strategic and operational market segmentation: a managerial analysis

One of the most widely used and familiar theories in marketing is market segmentation — the familiar protocols for the division of markets in a variety of ways into homogeneous groups of buyers, to form differentiated targets for marketing strategies and programmes. However, the view developed in this paper is that the conventional explication of this conceptual framework ignores some of the most critical issues faced in its use in practice. Uncovering these issues suggests the need to distinguish between ‘organizational levels’ in segmentation: the strategic compared with the managerial/operational; and, between the ‘internal’ and ‘external’ issues implicit and unavoidable in implementing segmentation strategies. This leads to the argument that segmentation models may vary in purpose and that segment targets should be evaluated not simply in the conventional terms of external market attractiveness, but also in terms of ‘internal compatibility’ with the structure and processes of the organization in quest...

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