Benefit-feature segmentation: a tool for the design of supply-chain strategy

Purpose - This paper aims to assess the effectiveness of different segmentation schemes as the basis of marketing strategy, with particular respect to supply-chain decisions, and to propose a new procedure capable of combining benefits sought and features available. Design/methodology/approach - In a study of buyers and consumers of beef in Brazil, segments based on three approaches were derived by hierarchical cluster analysis, fine-tuned by K-means cluster analysis. The outcome was evaluated for the viability and actionability of the preferred procedure, both objectively and through interviews with managers in the beef-supply business. Findings - The results revealed that a segmentation scheme combining benefits sought and features available yields more homogeneous and actionable segments, and has real promise as an input to the formulation and implementation of supply-chain strategy. Research limitations/implications - This promising innovation in market segmentation requires further study, and testing in the marketplace. Practical implications - The proposed system is a usable aid to decision making. Originality/value - The paper proposes an original approach to market segmentation.