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A Decision-oriented
Research Tool
segmentation has been steadily moving toward center
MARKET
stage as a topic of discussion in marketing and research
RUSSELL I. HALEY
Journal of MaTketiflU.
1968). 'Pp. 3035 ,
Vol.
32
(July.
Segmenlat;otl Methods
Several varieties of market segmentation have been popular in
the r ecent past. At least three kinds have achieved some degree
of prominence. Histo rically, perhaps the fU'st type to exist was
geographi c segmentation. Small manufactu r er s who wished to
limit the ir investments, or whose distr ibution channels were not
large enough to cover the entire country, segmented the U. S.
market, in effect, by selling their products on ly in certain areas.
However, as more and more brands became national, the second major system of segmentation--ciemograph ic segmentation-became popu lar. Under this philosophy targets were defined as
yo unger people, men, or fam ilies with children. Unfortunately, a
number of recent studi es have shown that demographic variables
such as age, sex, income, occupation and race are, in general, POOl'
predictors of behavio r and, consequently, less than optim um bases
for segmentation strategies.2
1
30
31
t h ~lt
Benefit Segmentation
An approach to mnrket segmentation whereby it
is possible to identify market segments by c;Hlsal
factol's J'Hthel' than descriptive factors, might be
called "benefit segmentation." The belief underlying this segmentation strategy is that the benefits which people Hre seek in g in consuming a given
product Hre t he basic reHSOIH:\ for the existence of
true market segments. Experience with this approach has shown that benefits sought by consumers
determine their behavior mu ch more accllrately
than do demographic charncteristics or volume of
consumption.
This does not mean that the ki nds of dabl
gathered in mOre traditional types of segmentati on
are not useful. Once people ha ve been classified
into segments in accordullce with the benefits they
are seeking. eac h segment is cont rasted with all of
t he othe r segments in terms of its demography, its
vo lume of consumption, its brand perceptions, itt:;
media habits, its perso nality and life-style, a nd so
forth. In this way. a reaso nab ly deep understa ndin g
of t he people who make up eHch segment can be
obta ined. And by capitali zing on t hi s undel'sblllding, it is possible to reach them, to talk to them in
their OW11 terms, and to present a product in t he
most favo .. able ligh t possible.
The benefit segmentatio n approach is not new. 1t
has been employed by a number of Ame ri ca's largest
co rporati ons s ince it was introduced in ]961." Howeve r, case hi t ori es have been notably absent from
the Iitel'ature because most studies have been contl'acted for privately. and have been treated confidentially.
.\ RU$seli 1. Haley, HExperimental Research on Attitudes Towu rd Shampoos," an unpublished papel' (February, 196t).
--32
The be nefit segmentnti on approach is based upon
being able to meas ure consu mer value sy tern s in
deta il, t ogethel" wi th wh at the consum er thinks about
various brands in the prod uct catego ry of interest.
While this concept seems s imple enough, operat iona lly i t is very complex. There is no s imple straigh tforward way of handling the volumes of data that
have to be generated. Compu ters and sophi sti cated
multi vari ate at t itude measurement techni ques ar e a
necessity.
Severa l alternative stati sti cal approaches can be
employed, a mong them t he so-called " Q" technique
of f actor ana lys is, multi-d imens ional scaling, and
other distance measures.!) All of these methods relate th e rat in gs of eac h respond ent to t hose of eve ry
other r espondent and t hen seek clusters of individuals with s irni)nr rat ing pattern s. If t he items
rnted are potentia l cons umer benefi ts, the clu ster s
th at emerge will be g rou ps of people who attach
s imila r degl'ees of impOI'ta nce to the va ri ous benefits ,
Whatever the stati stical approach selected , t he end
res ult of t he ana lys is is likely to be between t h ree
and seven cons umeI' segments, each represent ing a
potentially produ ctive foca l point fo r marketing
efforts.
Each segment is identified by t he benefi ts it is
seeking, H owever , it is th e total confiU'lt'1'ution of
the benefits sought which differentiates one segment
from another, ra t her th an t he fact t hat one seg m ~ nt
is seeking one particu la r benefit and another a quite
different benefi t. Individua l benefits are likely to
have appeal for severa l segments. I n f act . th e research th at has been done t hus f ar suggests t hat
most people would like as many benefits as possible.
H owever , the '1'elative importance they at tach to ind ividual benefits can d iffer impOltant ly and, accordingl y, can be used as an effecti ve lever in segmenting ma rkets.
Of course, it is poss ible to det ermine benefit segments int ui tively as well as with compu te rs and
sophi sti cated research methods. The ki nds of brillia nt ins ig hts whi ch pl'oduced t he Mustlmg a nd the
first IOO-millimeter cigarette have a good chan ce
of succeeding whenever market er s a re able to tap
an ex istin g benefit segment.
H owever, in tu ition can be ve ry expensive when it
is mi staken. Ma rketin g hi story is rep lete with examples of produ cts which someone f elt co uld not
miss. Over the longer term, systemat ic benefi t segmentation resea rch is likely to have a hi g her proporti on of s uccesses.
But is benefit segmenta tion practical ? And is it
truly ope rat ional ? The answer to both of these
qu estions is "yes." In effect, the cru x of th e prob~
Be"e/it Segmentation: A
Dec;sjou.~orje1Jled
33
Research Tool
TABLE 1
Sel1ment: Name :
Principa l bene fit sough t::
Demograph:1c st rength s :
The Sensor
Se ment:
The Socisbles
The Worriers
Brightness of teeth
Decay prevention
Large families
Special behavio r al
cha r acteristics:
Users of spearmint
flavored toothpas te
Brands disproportionatel y
favored:
Co l gate , Stripe
High self-involvement
High sociabiHty
Hedonistic
Smokers
Active
Heavy users
Crest
The Independent
SeO'ment
Pr ice
Hen
Heavy users
Bran~8
on sale
H1gh
autonomy
Value-oriented
-,
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choice of compatible point-oi-purchase materials and
in the selection of the kinds of sales promotions
which are most likely to be effective for any given
ma"ket target.
Genera lizations from
Benefit Segmentation St udies
A numbel' of generalizations are possible on the
basis of the major benefit segmentntion studies
which have been conducted thus far. For example,
the following general rules of thumb have become
apparent:
jg easier to ulke advantage of market segments that already exist than to attempt to
create new ones. Some time ago the strategy
of product cUlfel'entiation was heavily emphasized in marketing textbooks. Under th is philosophy it was believed that a manufacturer
was mure or less able to create new market
segments at will by mnking his product somewhat different from those of his competitors.
Now it is generally recognized that fewe)' costly elTors will be made if money is first in vested
in consumer research aimed at determ ining the
present contours of the market, Once this
knowledge is available, it is usually most efficient to tnilor marketing strategies to existing
consumer-need patterns.
No brand can expect to appeal to all consumers.
The very act of attracting one segment may
automatica lly ali enate others. A corollary to
this principle is that any marketer who wishes
to cove r a market fully must oifel' consumers
more than a single brand. The flood oJ new
b rands which have rece ntly appeared on the
market is concrete recognition of this principle.
A company's brands can sometimes cannibali ze
each other but need not necessarily do so. It
depends on whether 01' not they al'e positioned
against the same segment of the market, Ivory
Snow sharply reduced Ivory Flakes' sha re of
market, Hnd the Ford Falcon cut deeply into
the sales of the standard size Ford becnuse, in
each case, the pl'oducts wer e competing in the
same segments. Later on, for t he same companies. the Mustang was successfully introduced
with compamtively little damage to Ford; and
the success of Crest did not have a disproportionately adverse effect on Gleem's market
position because, in these CHses, the segments to
which the products appea led were different.
New and old products alike should be designed
to fit exactly the needs of some segment of the
market. In other words, they should be aimed
at people seeki ng a speCific combination of benefits. It is a marketing truism that you sell
people one at a time-that you have to get
8,fHneOne to buy your product before you get
It
The Swinger
The Conservative
a group which is ve ry
much concerned with the
prestige of the brands
purchased.
a group whi ch tries to
be modern and up to
date in all of its activities. Brand choices reflect thi s orientation.
. a group which prefers to
stick to large successful
companies and popular
brands.
. a group which looks for
benefits such as economy, value, durability,
etc.
The Hedoni st
Some of these segments appear among the customers of almost all products and servi ces. However, there is no guarantee that a majority of them
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