The bulk of market segmentation literature has concerned the generation ofsegments, with far less attention on what segmentation is used for -particularly surprising given the common speculations that the role ofsegmentation is changing due to CRM practices and the wider range of forms ofcustomer insight which they enable. We explore market segmentation in theservices and product-service systems context through twenty-five interviews infive UK-based companies, highlighting practical considerations in implementingmarket segmentation programs (see Young, Ott and Feigin 1978, for a similarearly approach). Within this case set, market segmentation, using a variety ofsegmentation bases, is still regarded as essential for customer selection,proposition development and mass communication. Addressable and interactivecommunications with individual customers, though, are increasingly based onindividualised customer analytics and propensity modelling, which aid thedetermination of the likelihood of uptake of specific propositions. Events andtriggers informing companies of how to deal with customers individually are alsoconsidered to be particularly effective rather than simple allocation of thecustomer to a particular characteristic segment. Implications for theory andpractice in market segmentation are outlined and further research is called forto explore this important area further.
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