Abstract:

Classification is a core issue in market segmentation. Through the use of relevant criteria, manufacturers are enabled to assess whether or not particular markets are better treated as homogeneous or, rather, as composed of a heterogeneous collection of subgroups, each differentially responsive to alternative product and promotional strategies. Classification criteria can also guide the formulation of these strategies and help in the assessment of their success or failure. This paper provides an overview of the current situation in the area. In doing so it outlines some general issues involved in classifying consumers, discusses some commonly used criteria and indicates possible new developments.