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

Abstract

PurposeThis 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/approachIn 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.FindingsThe 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/implicationsThis promising innovation in market segmentation requires further study, and testing in the marketplace.Practical implicationsThe proposed system is a usable aid to decision making.Originality/valueThe paper proposes an original approach to market segmentation.