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Segmentation-Targeting Model

What you put in... What you get out...
  • Customers' importance ratings for each measure of value for offerings in a product class
  • Customer descriptors (demographic or firmographic variables)
  • Number, size, and profile of needs-based market segments
  • Identification of factors that differentiate segments, both in terms of needs and descriptors
  • Classification tool to allocate any potential customer to a segment based on customer descriptors

Segmentation/Targeting is an analytic technique that helps firms to segment customers in a market.

segmentation map

Segmentation is the process of classifying customers into homogenous groups (segments) such that each group of customers shares enough characteristics in common to make it viable for the firm to design specific offerings or products for selected segments. The application finds customer segments using needs-based variables called basis variables. Cluster analysis helps firms to:

  • Better understand their customers.
  • Identify different segments in a market.
  • Choose attractive customer segments for targeting its marketing programs.

Associated Videos

The following video(s) are archived recordings of previous webinars discussing the Segmentation-Targeting model. These videos are intended for instructor viewing only as many times they discuss actual business case solutions.

Videos are only available for Registered Instructors

Technical Note - Segmentation Targeting Model

The Segmentation model technical note is a supplement to the material provided in the Principles of Marketing Engineering. This note provides additional analytic background to the model and may be freely distributed to your students.


To view other technical notes, please visit our Technical Notes page.

Business Cases - Segmentation Targeting Model

The following business cases are available to demonstrate the Segmentation Targeting Model using Marketing Engineering for Excel software:

  1. ConneCtor PDA 2001 Business Case - Using the Segmentation model, students must determine how the needs from a customer survey match up with Conglomerate's potential new offering.
  2. Durr Environmental Business Case - Using the Segmentation and Conjoint models, students evaluate the potential of a new market entry with one or more offerings.
  3. Kirin USA Business Case - Using the Segmentation, Positioning, and Conjoint models, students must determine what new beer Kirin should develop to increase beer sales in the US.
  4. FLIP Side of Segmentation Case (ME>XL v2) - Using the Segmentation model, students must determine if FLIP should segment the MBA students that they are targeting their certificates towards.