HBR's 10 Must Reads on Strategy for Healthcare (featuring articles by Michael E. Porter and Thomas H. Lee, MD)

Rediscovering Market Segmentation

by Daniel Yankelovich and David Meer

THERE ARE MANY DIFFERENT KINDS of people, and they display about as many different buying patterns. That simple truth is well understood by those responsible for market research, product development, pricing, sales, and strategy. But they haven’t been getting much help from a venerable technique—market segmentation—which, if properly applied, would guide companies in tailoring their product and service offerings to the groups most likely to purchase them. Instead, market segmentation has become narrowly focused on the needs of advertising, which it serves mainly by populating commercials with characters that viewers can identify with—the marketing equivalent of central casting. ...