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Services Segmentation
Priceline.com
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Segmentation
• Identify and profile distinct groups of
buyers who might require separate product
and/or marketing mixes
• A rational adjustment of product and
marketing effort to consumer/user
requirements
• Key concept: CONSUMER DIFFERENCES
(Consumer Heterogeneity).
P4 Sept/Oct -2003
Services Marketing – Professor V. Padmanabhan
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Segmentation – American Cable TV
P4 Sept/Oct -2003
Services Marketing – Professor V. Padmanabhan
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Bases for Segmentation
• Primary: Determinants of consumption or
transaction utility
– e.g., benefits sought, usage behavior,
(who, what, where, when, how, why?).
• Secondary: Addressable characteristics
related to primary segmentation basis
(mostly for profiling)
– e.g., geographic, demographic
P4 Sept/Oct -2003
Services Marketing – Professor V. Padmanabhan
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Benefit Segmentation
P4 Sept/Oct -2003
Services Marketing – Professor V. Padmanabhan
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Segmentation in Services
• Product Segmentation
– Heterogeneity due to variations in the
valuation of consumption utility
• Services Segmentation
– Heterogeneity due to variations in the
valuation of
• Consumption utility
• Transaction utility
P4 Sept/Oct -2003
Services Marketing – Professor V. Padmanabhan
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Segmentation: The Services Perspective (contd.)
P4 Sept/Oct -2003
Services Marketing – Professor V. Padmanabhan
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Segmentation – Retail Financial Services in Asia
P4 Sept/Oct -2003
Services Marketing – Professor V. Padmanabhan
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Segmentation: An Illustration
British Airways
• 35% of customers generate 60% of sales
• segment specific services
– Concorde, First Class, Club Europe, Club
World, Euro Traveller, World Traveller and
domestic Shuttle
• value to segment = overall benefit
– core product + supplementary service
– payoffs = Virgin Limo Service!
P4 Sept/Oct -2003
Services Marketing – Professor V. Padmanabhan
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Priceline.com - Today
P4 Sept/Oct -2003
Services Marketing – Professor V. Padmanabhan
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