Postmodern Segmentation

In the classic texts, such as those below, Market Segmentation is viewed as a discrete event. Once defined, the segmentation scheme drives Marketing tactics until it is replaced by an entirely new segmentation scheme.

Market Segmentation: How to do it, how to profit from it
Handbook of Market Segmentation: Strategic Targeting for Business and Technology Firms (Haworth Series in Segmented, Targeted, and Customized Market)

A "strategic" segmentation done in textbook style can easily take two years to complete, cost multiple millions of dollars, and brings with it a high risk of failure: if the strategy consultants are unable to gain consensus among executive stakeholders, or if the business landscape changes significantly while the segmentation scheme is under development.

At a conceptual level, the standard approach to segmentation assumes:
(1) "Natural" market segments exist(which we simply need to discover);
(2) Segments are stable and do not change quickly;
(3) We can acquire all relevant information about market participants, without real transactions.

But let's challenge these assumptions for a minute. What if:
(1) Market segments are situational;
(2) Consumer behavor is highly dynamic;
(3) Absent actual transactions and exchange of value, we do not know the consumer's real preferences.

If these alternative assumptions are true, there are several implications:

(1) Marketing managers should see segmentation is a business process, not an event;
(2) The key driver in and useful segmentation will be differential consumer response to actual messages and value propositions;
(3) Seeding a test-and-measure regime with a quick and rough segmentation based on management judgment is preferable to investing years and millions in a grand strategic study.

I'll develop these ideas in future posts.