Introduction to the Special Issue on Market Segmentation

Abstract

In market segmentation, one distinguishes homogeneous groups of customers who can be targeted in the same manner because they have similar needs and preferences. In 1956, Smith defined: "Market segmentation involves viewing a heterogeneous market as a number of smaller homogeneous markets, in response to differing preferences, attributable to the desires of customers for more precise satisfactions of their varying wants." This being an accurate definition to date, one of its most appealing aspects is that it presents segmentation as a conceptual model of the way a manager wishes to view a market. Even if it is a powerful concept, it is still an empirical question as to how well it describes the situation for a particular product or service to provide input to managerial decisions; there are alternatives to segmentation, in particular one-to-one marketing in one extreme and mass marketing in the other.