Abstract:

This paper reports on a relatively new basis for segmenting market by elasticity of consumer response to a change in a marketing stimulus. Segmentation by elasticity seeks to analyse change in consumer responses to changes in price, deal or advertising levels. This basis for segmentation is strategically important because it can aid management in determining the right price, deal or advertising level to direct to specific segments through the utilisation of basic microeconomic principles. The purpose of this presentation is to report on a relatively new basis for segmenting markets; by elasticity of consumer response to changes in a marketing stimulus. The concept is not new but the applications to market segmentation is new, logical, and strategically important.