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TopOverview Of Segmentation Strategies
Market segmentation was introduced in the marketing literature for the first time by W. Smith in 1956. Since then, segmentation became a fundamental concept in marketing just like the classic four marketing mix elements: product, pricing, promotion and place. Segmentation is defined by Hoek, Gendall, and Esslemont (1996) as the technique for understanding the market and dividing the market into groups with similar characteristics that could be satisfied by different offers. Companies go through the segmentation process in order to make better marketing decisions such as attract the right customers, retain profitable customers, come up with new product/service introduction and finally maintain product/service profitability (Hoek et al., 1996).
There are several well-known segmentation variables that are extensively used in marketing. These variables include: demographic, psychographic, personality, benefits, lifestyles, usage, loyalty, image, situation, behaviour and decision-making process (Sirgy, 1982; Dickson, 1982; Cathelat & Wyss, 1989; Blattberg, Peacock, & Sen, 1976; Zotti, 1985; Haley 1968; Young, Ott, & Feigin, 1978; Aaker, 1995; Kotler, 1997). However, those are not the only variables that marketers can use, other variables may be developed depending on the product or service that is investigated. Marketers can identify specific variables depending on the market and the target customer profile (Nguyen & LeBlanc, 2001).