market segmentation thesis

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Market Segmentation -A framework for determining the right target customers BA-thesis May 2010

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Rachel Kennedy

Demographic variables have traditionally been adopted as descriptors for segmentation studies due largely to their inherent convenience.This paper uses data from a large empirical study to investigate the predictive power of a range of segmentation variables. Specifically, the ability to identify segment membership using descriptive demographics is compared to the identifying ability of other behaviours. Segments are determined by propensity to react to particular marketing stimuli. Propensity to react is measured using the Juster verbal probability scale.For the product category examined, results highlight a stronger ability of behaviours in identifying segment membership. That is, propensity to react differently to marketing stimuli (i.e. behaviour that determines segment membership) is often strongly correlated with other post buying behaviours (of different products). Results as such highlight the additional benefit that behavioural descriptors can provide to segmentation studies in addition to having significant implications for the facilitation of marketing and communication strategies for segments.That behaviours should correlate well with other behaviours is not surprising. That behaviours are not often used to identify segment membership is surprising. This paper concludes with suggestions for segmentation practice.

Kugathasan Kajaruban

Juho Pesonen

This dissertation explores options for improving the success of market segmentation research by testing different market segmentation methods and effects of information and communication technologies (ICTs) in tourism research. The purpose of this study is to increase the success of market segmentation research in the field of travel and tourism. The context of this study is rural tourism in Finland, which is regarded as an important source of revenue for many rural areas and a field where information on data-driven market segmentation is practically non-existent. This dissertation consists of four papers, all discussing the topic of market segmentation in tourism. The theoretical basis of this study lies within the discipline of marketing and relies on the assumption that markets are heterogeneous, and that through market research it is possible for businesses to diversify their offerings to suit the needs and wants of specific segments in a way that creates value both for the customer as well as the company. Market segmentation is one of the cornerstones of marketing the management paradigm and its usefulness has been demonstrated repeatedly both in the academic literature and by practitioners. This study adapts a postpositivistic research paradigm to study the possibilities for improving market segmentation theory and methodology. By means of a literature review and two surveys of Finnish rural tourism websites data is collected on the impact of ICTs on market segmentation in tourism as well as the needs and wants of Finnish rural tourists. This study provides evidence that the academic market segmentation literature does indeed identify segments that also exist in practice, thus bridging the gap between academic and practice, and contributes to the way market segmentation is conducted in travel and tourism.

Telematics and Informatics

Alexander Serenko , Ofir Turel

ABULEFON FEMI

Abstract The purpose of this study is to investigate the factors affecting the decision of buying mobile phone devices in southwestern Nigeria. In order to accomplish the objectives of the study, a sample of 246 consumers were taken by using simple random sampling technique. Both primary and secondary data were explored. Moreover, six important factors i.e. price, social group, product features, brand name, durability and after sales services were selected and analyzed through the use of correlation and multiple regressions analysis. From the analysis, it was clear that consumer’s value price followed by mobile phone features as the most important variable amongst all and it also acted as a motivational force that influences them to go for a mobile phone purchase decision. The study suggested that the mobile phone sellers should consider the above mentioned factors to equate the opportunity.

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Essays on Market Segmentation and Retailers' Competing Strategies

This dissertation focuses on exploring U.S. food retailers’ strategic interactions and the impacts on consumers. Specifically, I examine food retailers’ strategies on segmenting consumers, conducting price discrimination, and designing their product portfolio in the context of the U.S. yogurt market. The first essay examines the segmentation strategies employed by food retailers, with a focus on the use of advanced machine learning techniques (i.e., K-means clustering) to group consumers based on various characteristics, including demographics and purchase history. The second essay applies the data-driven market segmentation obtained in the first essay to a second-degree price discrimination model. The third essay relaxes the implicit assumption made in the first two essays that consumers’ choice set is fixed, and studies a non-price strategy, namely, adjusting assortment, that is adopted by food retailers in response to regulations. By analyzing the retailers’ strategies on market segmentation and responses to regulations, this dissertation aims to shed light on the strategic interactions of food retailers and consumers, and the competitive landscape of food market in general.

Understanding the strategies employed by food retailers is of utmost importance in agricultural and food economics as it directly influences consumers and their purchasing decisions. The food retail industry in the U.S. is highly competitive, with retailers continuously devising tactics to attract and retain customers. Dimensions of competition such as pricing strategies, product assortment, promotional activities, and customer service can significantly impact consumers’ choices and behaviors. Investigating the strategies employed by food retailers not only provides insights into their business operations but also sheds light on how these strategies affect consumers.

The first essay explores the application of machine learning methods in consumer segmentation under different information environments. Machine learning methods become popular in economic and marketing research, partly because of their flexibility in application. Although recent studies apply these advanced methods to various topics including water, housing, health, and food markets, much is less known about using machine learning methods to facilitate firms’ market segmentation decisions. Using Nielsen Consumer Panel data, I show that K-means clustering, one of the unsupervised learning methods, can be applied to conduct market segmentation. From the retailers’ perspective, incorporating more consumer information (i.e., purchase history) leads to the change in segments consumers belong to.

The second essay assesses the effectiveness of data-driven market segmentation in enhancing price discrimination models. Price discrimination models are commonly adopted by firms to optimize revenue and profitability by customizing prices to different customer segments. Existing studies often rely on exogenous assumptions for consumer segmentation, which may or may not be applicable in practice. This study advances the existing literature by replacing the consumer segment assumption with data-driven market segmentation obtained through K-means clustering. The results are then applied to the second-degree price discrimination model to analyze how sensitive the firms optimal profits are under different consumer information environments. The findings reveal that adding consumer information to consumer segment leads to a more inelastic demand for the consumer segments and an increase in firm’s profits.

The third essay focuses on the non-price strategies retailers adopt to respond to the Unit Pricing Regulation (UPR). UPR requires retailers to display unit prices in addition to product prices and helps consumers make more informed decisions. Despite extensive research on consumers perceptions of unit prices, little is known about retailers price and non-price responses under intensified price competition brought by UPR. Relying on the geographic variation in UPR implementation across U.S. states, we use product-store-level scanner data on the U.S. yogurt market and identify UPR effects on store product offerings and pricing. We find that mass merchandisers reduce product offerings under UPR. Grocery stores that belong to a retail chain entirely under UPR add brands, while other grocery stores make no significant assortment responses. UPR price effects are limited for mass merchandisers as well as grocery stores. Using a structural demand model, we find that the average consumer surplus falls under UPR, highlighting an unintended policy effect.

Degree Type

• Doctor of Philosophy
• Agricultural Economics

Campus location

• West Lafayette

Advisor/Supervisor/Committee Chair

Advisor/supervisor/committee co-chair, additional committee member 2, additional committee member 3, usage metrics.

• Agricultural economics

International Market Segmentation Based on Consumer Behavior

• First Online: 18 October 2012

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• A. Coskun Samli 2  

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In my earlier book (Samli 1995) I paraphrased Spielvogel (1989) saying that global consumer segmentation must cross national lines. That could easily be misconstrued: first, there could be a global segmentation that is not quite realistic and there cannot be national segmentation, let alone a global one. Second, crossing national lines can be interpreted as markets being homogenous domestically and segmented internationally. This also is not correct, because domestic or international markets are simply not homogenous. In fact, as stated in the Introduction, today there are more cultural pockets in markets that may be forming as segments. In other words, neither domestically nor internationally does one size simply fit all.

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Samli, A.C. (2013). International Market Segmentation Based on Consumer Behavior. In: International Consumer Behavior in the 21st Century. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-5125-9_11

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Armani, Luca. "Machine Learning: Customer Segmentation." Bachelor's thesis, Alma Mater Studiorum - Università di Bologna, 2021. http://amslaurea.unibo.it/24925/.

Bergström, Sebastian. "Customer segmentation of retail chain customers using cluster analysis." Thesis, KTH, Matematisk statistik, 2019. http://urn.kb.se/resolve?urn=urn:nbn:se:kth:diva-252559.

Johansson, Axel, and Jonas Wikström. "Customer segmentation using machine learning." Thesis, Uppsala universitet, Avdelningen för systemteknik, 2021. http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-443868.

Koziczynski, Jakob, and Márcia Hammarström. "SEGMENTATION AND CUSTOMER RELATIONSHIPS AT SAPA." Thesis, Mälardalens högskola, Industriell ekonomi och organisation, 2015. http://urn.kb.se/resolve?urn=urn:nbn:se:mdh:diva-28372.

Worawattananon, Prakit. "Customer service driven supply chain segmentation." Thesis, Massachusetts Institute of Technology, 2008. http://hdl.handle.net/1721.1/45247.

Vuckic, Asmir, and Renato Cosic. "Design Of A General Customer Segmentation Process." Thesis, Tekniska Högskolan, Högskolan i Jönköping, JTH, Industriell organisation och produktion, 2015. http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-26371.

Hiziroglu, Abdulkadir. "A soft computing approach to customer segmentation." Thesis, University of Manchester, 2009. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.503072.

Basu, Probal, and Eun Kyun Kim. "Customer segmentation in the medical devices industry." Thesis, Massachusetts Institute of Technology, 2007. http://hdl.handle.net/1721.1/40110.

Jan, Nooreen Amir <1995&gt. "Robustness of Clustering-Based Customer Segmentation Models." Master's Degree Thesis, Università Ca' Foscari Venezia, 2022. http://hdl.handle.net/10579/21251.

Aziz, Andrew. "Customer Segmentation basedon Behavioural Data in E-marketplace." Thesis, Uppsala universitet, Institutionen för informationsteknologi, 2017. http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-330461.

Teichert, Thorsten, Edlira Shehu, and Wartburg Iwan von. "Customer segmentation revisited: The case of the airline industry." Elsevier, 2008. https://publish.fid-move.qucosa.de/id/qucosa%3A38407.

Filová, Andrea. "Methodology of B2B Customer Segmentation in the Utilities on the Czech Market: Tool for Customer Classification into Segments." Master's thesis, Vysoká škola ekonomická v Praze, 2010. http://www.nusl.cz/ntk/nusl-72717.

Šťavíková, Martina. "Analytical CRM: A Tool How To Manage Company's Profitability." Master's thesis, Vysoká škola ekonomická v Praze, 2008. http://www.nusl.cz/ntk/nusl-12632.

Basu, Abhishek Arunasis. "Data-driven customer segmentation and personalized information provision in public transit." Thesis, Massachusetts Institute of Technology, 2018. http://hdl.handle.net/1721.1/119331.

Schubert, Sebastian. "Analysis and development of customer segmentation criteria and tools for SMEs." Thesis, University of Gloucestershire, 2018. http://eprints.glos.ac.uk/5714/.

Algestam, Sara, and Ertuğrul Kılıçaslan. "Fulfilling customer demand Customer requirements and demands on e-commerce." Thesis, Högskolan i Borås, Institutionen Ingenjörshögskolan, 2011. http://urn.kb.se/resolve?urn=urn:nbn:se:hb:diva-20264.

Deines, Tara. "Market segmentation to become the partner of choice." Thesis, Kansas State University, 2014. http://hdl.handle.net/2097/32782.

Jonsson, Ragnar. "Studies on the competitiveness of wood : - market segmentation and customer need assessments." Doctoral thesis, Växjö universitet, Institutionen för teknik och design, 2005. http://urn.kb.se/resolve?urn=urn:nbn:se:vxu:diva-398.

Floh, Arne, Alexander Zauner, Monika Koller, and Thomas Rusch. "Customer segmentation using unobserved heterogeneity in the perceived value-loyalty-intentions link." Elsevier, 2014. http://epub.wu.ac.at/3865/1/customer.pdf.

Johnson, Elinor. "Improving Customer Perceived Value at the Liberty Program, Naples Italy : MBA-thesis in marketing." Thesis, University of Gävle, Department of Business Administration and Economics, 2008. http://urn.kb.se/resolve?urn=urn:nbn:se:hig:diva-3436.

Aim: This study is based upon the premise that creating value is the basis for all businesses (Grant, 2002; Day, 1990; Porter, 1996; Woodruff, 1997). The research problem and ultimate purpose of the study is to determine how customer perceived value can be improved at the Liberty Program, Naples Italy. The objective is thus to identify specific value and non-value contributing factors, identify commonalities within the target audience and thereby make suggestions for short, medium and long-term improvements. The long term goals of this study are to find and implement ways to boost program participation as well as satisfaction levels.

Method: The literature review examines the concepts of customer perceived value and satisfaction, communication, relationship marketing and segmentation, thus laying the grounds for a basic understanding of the subject matter. The empirical study is based on an extensive data collection process with data collected from over 200 customers in both qualitative and quantitative form, achieved by a survey and customer interviews. The goals and objectives of the study are accomplished by analyzing collected data and thereby identifying key customer characteristics and key drivers of value perception. A service improvement plan is thereby constructed consisting of suggestions for implementing a continuous improvement plan with short, medium and long term goals.

Result & Conclusions: The literature review concludes that customer value perceptions are based upon a variety of factors and takes place both pre, during and post the transaction. Including the customer in the integrated value-creating process is found to be a critical element to success and in maintaining customer satisfaction and should thus be the basis for marketing communication. Empirical research establishes that product related issues have the highest impact on customer satisfaction at the Liberty Program, Naples Italy, arguably because they are the core and thus expected service. A number of short term (quick) fixes are suggested to quickly respond to customer comments and thus increase trust and establish a sense of co-creation of value with the customers. Having established the main demographics of the target audience, steps to develop more effective communications are also presented.

Suggestions for future research: Future research should focus on exploring new channels of communication to reach a young and increasingly technologically savvy target audience. Cross-examination of other Liberty Programs could also present some useful programming as well as marketing communications ideas.

Contribution of the thesis: Other military installations could benefit from this study as various locations share the same (constantly rotating) customer base.

Engvall, Maria, Johannes Fritz, and Sofia Kindh. "Offline vs. Online: Who buys where? A customer segmentation study of travel agencies." Thesis, Högskolan i Jönköping, Internationella Handelshögskolan, 2012. http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-18315.

Van, Tonder Francois Petrus. "Customer relationship management from the perspective of a trackless mining equipment maintenance organisation / Francois Petrus van Tonder." Thesis, North-West University, 2008. http://hdl.handle.net/10394/4195.

Kadambi, Rupasri. "Analysis of data mining techniques for customer segmentation and predictive modeling a case study /." Diss., Online access via UMI:, 2005.

Afzalan, Milad. "Data-driven customer energy behavior characterization for distributed energy management." Diss., Virginia Tech, 2020. http://hdl.handle.net/10919/99210.

HUANG, CHIEN-LIANG, and 黃建良. "Customer segmentation and strategy development based on customer value." Thesis, 2007. http://ndltd.ncl.edu.tw/handle/13419199870298051233.

Mota, Rita Margarida Vieira. "Customer relationship management field lab at PCDIG: Customer segmentation." Master's thesis, 2019. http://hdl.handle.net/10362/68868.

Rocha, Sara Cristina Dias. "Customer relationship management at Sport Lisboa e Benfica: football customer segmentation." Master's thesis, 2018. http://hdl.handle.net/10362/37144.

Wu, Sung-Jung, and 吳松融. "The New Territory of Customer Segmentation Strategy UnderAnalytical Customer Relationship Management Model." Thesis, 2002. http://ndltd.ncl.edu.tw/handle/17418420515094669959.

Voorhees, Clay M. Cronin J. Joseph. "A customer equity-based segmentation of service consumers an application of multicriterion clusterwise regression for joint segmentation settings /." 2006. http://etd.lib.fsu.edu/theses/available/etd-05082006-140753.

Kuo, Sheng-yang, and 郭盛揚. "A Customer Segmentation Method Based on Transaction Patterns." Thesis, 2004. http://ndltd.ncl.edu.tw/handle/5rgy4k.

Pan, Ru-Ting, and 潘茹婷. "An Investigation of the Profitability-based Customer Segmentation." Thesis, 2002. http://ndltd.ncl.edu.tw/handle/21068030550179678352.

LEE, PEI-CHEN, and 李佩珍. "Applying Genetic Programming to Construct Customer Segmentation Rules." Thesis, 2007. http://ndltd.ncl.edu.tw/handle/76317094164576416867.

Li, Tsung-Hsien, and 李宗賢. "The Research for the Customer Demand and Customer Segmentation Strategy of Commercial Bank." Thesis, 2018. http://ndltd.ncl.edu.tw/handle/88s2bc.

Yang, Chia-Cheng, and 楊家誠. "A Study of Customer Value and Customer Segmentation: An Experimental Research of Insurance Industry." Thesis, 2005. http://ndltd.ncl.edu.tw/handle/66956403644669210837.

Yang, Hao-Tung, and 楊浩東. "The Study of Fuzzy Clustering Approach for Customer Segmentation." Thesis, 2003. http://ndltd.ncl.edu.tw/handle/79445429314875999566.

Godfrey, Andrea Lynn. "A product segmentation approach and its relationship to customer segmentation approaches and recommendation system approaches." Thesis, 2007. http://hdl.handle.net/2152/3054.

Godfrey, Andrea Lynn 1973. "A product segmentation approach and its relationship to customer segmentation approaches and recommendation system approaches." 2007. http://hdl.handle.net/2152/13234.

Huang, Hui-Wen, and 黃惠玟. "Segmentation-Tailored and Micro-Segmentation Marketing：An Exploration of the Value of Analytical Customer Relationship Management." Thesis, 2007. http://ndltd.ncl.edu.tw/handle/26365211106669480475.

HU, TIAN-HAO, and 胡天豪. "RFM-based Customer Segmentation and Analytical Framework for Online Retailing." Thesis, 2017. http://ndltd.ncl.edu.tw/handle/28x7u3.

邱振傑. "Applying genetic programming to desision rules based customer segmentation strategy." Thesis, 2004. http://ndltd.ncl.edu.tw/handle/51702269738161607190.

Caetano, Joana Maria Pereira Lupi. "Leveraging customer segmentation on hotel loyalty programs with data mining." Master's thesis, 2019. http://hdl.handle.net/10362/104412.

Mendes, Luma Prianca Salman. "Study about customer segmentation and application in a real case." Master's thesis, 2019. http://hdl.handle.net/10071/22208.

Brito, Carlos Aguiar Teixeira de. "Customer segmentation and value proposition : the case of KG International." Master's thesis, 2016. http://hdl.handle.net/10400.14/21613.

Barata, Catarina Isabel Castanheira Carvalho Nunes. "Customer behavioral segmentation in utilities industry : the Galp Energia case." Master's thesis, 2015. http://hdl.handle.net/10400.14/17963.

Hsu, Hsiao-Hsuan, and 胥孝萱. "A Study on the Customer Segmentation and Personalized Recommendation Systems." Thesis, 2010. http://ndltd.ncl.edu.tw/handle/49525829815076619901.

Chen, Hung-Chih, and 陳泓志. "The Financial Tsunami Effect on Customer Segmentation ---the Shipping Industry." Thesis, 2011. http://ndltd.ncl.edu.tw/handle/89674847208723750705.

Lin, Jian-Bang, and 林建邦. "An Integral CRM Framework of Customer Segmentation and Relationship Management." Thesis, 2012. http://ndltd.ncl.edu.tw/handle/56100011348843106818.

Jen-Chu, Wang, and 王仁助. "Customer segmentation and sales strategy of health food display sales." Thesis, 2018. http://ndltd.ncl.edu.tw/handle/jhc98z.

Chiang, Yin-Tai, and 江盈泰. "Using Customer Segmentation to Create Customer Value through Personalized Promotion-A Case Study of Automobile Dealership." Thesis, 2005. http://ndltd.ncl.edu.tw/handle/89695444213492024268.

Pen, Tsai-Tien, and 彭再添. "Applying Customer Relationship Management (CRM) concepts for credit card customer segmentation: An example of T bank." Thesis, 2008. http://ndltd.ncl.edu.tw/handle/16685609228314025256.

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