Market segmentation in German business practice: relevance, procedures and challenges

The market segmentation concept, which aims at meeting the specific needs of different customer groups, has been part and parcel of marketing science for many years. Primarily the technical literature focuses on the different ways of creating segments. Up till now, the way in which companies operate a market segmentation process in reality, has only been surveyed sporadically. For this reason, a qualitative field study was conducted from November 2006 to January 2007, comprising companies from the consumer as well as the industrial goods industries, from B2C services, from B2B markets and the retail industry. This paper highlights the general procedures, as well as the challenges arising in the context of developing and implementing market segmentation concepts. On the one hand, it becomes apparent that segmentation activities may differ considerably, depending on issues like sector, industry and company size. On the other hand, the field study also identifies some remarkable trans-sectoral similarities concerning segmentation issues.