segmentation - The Marketing Review 2001, 2, 187-203

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The Marketing Review 2001, 2 , 187-203 ISSN 1472-1384/2001/020187 + 16 £4.00/0 ©Westburn Publishers Ltd. 'DY 'DYLG 7RQN G 7RQNV DQG 0 DQG 0DUF )DUU UF )DUU University of Lancaster 0D 0DUNHW 6 W6HJPH JPHQWV WV )DO DOOD ODFLHV DQG FLHV DQG )DX DXOWV WV This paper is concerned with popular approaches to social stratification and to segmenting consumer markets in the UK. The measures of social grade and of geodemographics are of major concern. These and other approaches to social stratification are reviewed and the importance of validity and reliability in segmentation exercises is established. The paper then takes an empirical turn by analysing a data set to identify some difficulties associated with the allocation of allocating individuals into identified social grade and geodemographic segments. The paper concludes with comments on the potential dangers of the ecological fallacy and of basic recording faults in segmentation exercises. Keywords: market segmentation, UK, consumer markets, social grade, geodemographics, validity, reliability, ecological fallacy Introduction Like marketing itself, market segmentation is far from new but since the 1950s, more formal assessments of market segmentation have proceeded at some pace amongst both academics and practitioners. The seminal works of Smith (1956) and of Wind (1978) are often encountered as benchmarks and recent texts such as Dibb and Simkin (1996) and McDonald and Dunbar (1998) indicate the continuing popularity of market segmentation from a broad, prescriptive, managerial perspective. Tedlow and Jones (1993) reviewed the history of market segmentation and emphasised the impact of technology in facilitating the development of ‘micromarketing’. Over the last decade, this has come to pass where developments such as the installation of ‘cookies’ on PCs allow each individual to be considered a unique segment and to be treated accordingly. However, the prevailing reality is that logistical issues still require market segmentation. The centrality of market segmentation originates from the diversity of the modern world and Hooley and Saunders (1998) make the point that ‘ … segmentation is a logical extension of the marketing concept itself.’ This rings true if consumer needs are accepted as being the starting point for 1 Correspondence: David Tonks, Department of Marketing, The Management School University of Lancaster, Lancaster, LA1 4YX. Telephone: (+44)1524593910 Fax: (+44) 1524 593928. Email: [email protected] Website: http://www.
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188 David Tonks and Marc Farr marketing management but given that premise, it does not follow that the concept and the subsequent STP mantra (Segmentation-Targeting- Positioning) are beyond question. Dibb and Stern (1999) summarise some of the concerns raised amongst an Internet discussion group. Amongst other issues, there can be technical problems associated with the appropriate and accurate allocation of individuals to market segments and such problems are
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segmentation - The Marketing Review 2001, 2, 187-203

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