The Lacking Relevance of Market Segmentation: A Cross-Category Study Using the Dirichlet Model

Sammanfattning: Market segmentation is a core concept in marketing, but its relevance is being questioned. Researchers using the Dirichlet model claims that buyer profiles between competing brands rarely differ. However, this radical claim has been criticized by segmentation advocates for relying on studies that only uses simpler segmentation methods such as demographics.This thesis tests the validity of this claim, regarding an unsegmented market, by attempting to replicate previous research based on simpler segmentation methods such as demographics. And add to previous research by testing the more sophisticated segmentation methods: need states, consumer materialism and person-situation segmentation. A quantitative and descriptive research design is used. The sample consists of 997 responses, collected in an online survey based on Juster scale purchase probabilities.The results support prior findings with regard to demographics. And also indicate that more sophisticated segmentation methods does not generate managerially useful segmentation at the brand level. In essence, buyer profiles between competing brands does not differ enough to mandate the marketing strategies advocated by traditionalists.Based on these findings, and previous extensive research in the field, marketers should change their practices regarding segmentation, targeting, positioning, brand portfolio management and brand growth strategies. Specifically marketers should target all category buyers, avoid narrow targeting, and focus on brand penetration rather than customer loyalty.