Bases of Market Segmentation Success: A Marketing Decision Makers' Perspective

Market segmentation is an important instrument in strategic marketing and regarded as a key element of marketing strategy (Palmer & Millier, 2004; Hooley, Piercy & Nicoulaud 2012). It is viewed as a basis for superior financial performance (Cravens & Piercy, 2013). In marketing literature, it is often also referred to as marketings Segmentation, Targeting and Positioning (STP) process. For a while now, there is criticism against market segmentations usefulness to marketing practitioners by marketing academics. For instance, Foedermayr and Diamantopoulos’ (2008) analysis of market segmentation practices indicated a need for market segmentation research that could be generalized with more confidence. Their literature review revealed that most segmentation research deals with how it should be done and not with how it is actually done. Reibstein, Day and Wind, (2009) asserted that marketing academics neglect to develop applicable models for critical and strategic marketing issues have created a vacuum between academics and their marketing counterparts in practice. In a sense it also marginalized marketing as a discipline that should add value to executives who are looking for solutions to the problems they face in a fast changing market space. After his research Quinn (2009) concluded that there is little practical advice in marketing literature for marketers on how to choose variables, identify segments, controlling performance in segments or how to follow a process in doing all this. The research was based on segmentation practices from apparel retail managers in the United Kingdom. Lastly, Harrison and Kjellberg (2010) concluded that there could be other ways to segment markets than what the segmentation process literature suggests. While marketing theory suggests that market segmentation is a determinant of marketing success, it is not clear to what extent marketing decision makers share this sentiment. The most pertinent finding of the review in this paper is that there is no uniform way of market segmentation that can be used by marketers. Marketing academics have, for some time now, urged their colleagues to come up with research that will be useful for marketing practitioners.