Market segmentation and the structure of competition:: applicability of the strategic group concept for an improved market segmentation on industrial markets

In recent years, many attempts were made to elaborate reliable segmentation concepts. However, even current articles on market segmentation focus only on customers. Competitors are at best accounted for once the segment formation is completed. And in contrast to customer analysis, the methodological consideration of competitors is rather superficial and unsystematic. In this respect, the current approach of market segmentation in theory and practice generally reflects the one-sidedness of marketing as criticized by Day and Wensley [Day GS, Wensley R. Marketing theory with a strategic orientation. J Mark 1983;47:79-89]. The authors claim that the results of segmentation could be improved considerably if information on competitors were considered in the process of market segmentation. A preliminary empirical test of the approach shows good support for the authors' hypotheses. (C) 2000 Elsevier Science Inc. All rights reserved.