Segment Optimization
An empirical comparison
Douglas L. MacLachlanUniversity of Washington Business School, United States.
Michael G. MulhernMulhern Consulting, United States.
INTRODUCTION
Market segmentation is a core element of any marketing strategy. Marketers can choose to pre-define the segments based on their experience and other factors and/or obtain consumer data (e.g., purchase behaviors, perceptions, preferences, lifestyles, etc.) and employ multivariate statistical procedures to extract segments from the data. The first approach, a-priori segmentation, is typically geography, product and/or industry focused. The latter approach, post-hoc segmentation, is a consumer-oriented approach more in line with the marketing concept. Post-hoc segmentation requires...