Combinatorial Optimization Approaches to Constrained Market Segmentation: An Application to Industrial Market Segmentation

Marketing Letters, Volume 9, Issue 2, pp 115-134

Posted: 11 Jun 2016

Date Written: April 1998

Abstract

Proper market segmentation schemes should address not only how to develop feasible schemes of homogeneous market segments within designated managerial, institutional, and environmental restrictions, but also how to construct such schemes simultaneously in conjunction with associated resource constraints. Current existing methodological approaches to market segmentation fall short of such development issues. This manuscript proposes an alternative approach for the construction of market segments particular to the needs and constraints for a particular application (NORMCLUS). We employ some recent developments in combinatorial optimization algorithms and heuristics in forming managerially relevant market segments. We illustrate a few aspects of this general methodology in the context of an actual industrial marketing application concerning the differential drivers of customer perceived overall quality for an electric utility company.

Keywords: Market segmentation, constrained classification, customer satisfaction, industrial marketing, combinatorial optimization

Suggested Citation

DeSarbo, Wayne S., Combinatorial Optimization Approaches to Constrained Market Segmentation: An Application to Industrial Market Segmentation (April 1998). Marketing Letters, Volume 9, Issue 2, pp 115-134, Available at SSRN: https://ssrn.com/abstract=2792322

Wayne S. DeSarbo (Contact Author)

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
156
PlumX Metrics