Product relevance as basis for market defragmentation and strategic decision-making

Date of publication: September 19, 2004

Abstract:

Fragmentation of consumer markets is a generally accepted phenomenon. Market segmentation models based on demographic features or lifestyle have become so complex that their value in the strategic decision making process of larger companies has become questionable. Most companies explain consumer satisfaction by means of a product-focussed approach. 2way research developed the concept of 'Product Relevance' in order to steer away from the increasing complexity of lifestyle models and to make satisfaction and loyalty research less dependent on product features. 'Product Relevance' is based on the idea that satisfaction is partly determined by how relevant a product is in the consumer's life. The more relevant the product, the more satisfied the consumer. MSN in the Netherlands used Product Relevance to understand what is behind the satisfaction and loyalty of its Portal users.

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