Don Esslemont

Market segmentation: A search for the Holy Grail?

ACCEPTANCE of the benefits of market segmentation is so pervasive that it seems almost sacrilegious to question the validity of this faith in the power of segmentation as a marketing tool. But, at the risk of being labelled heretics, we argue that segmentation is not the marketers’ nirvana it is sometimes made out to be. This paper discusses a number of assumptions and arbitrary decisions involved in the segmentation process, including beliefs about the selection of base variables, the analysis method chosen, the number and composition of segments, the validity of the solution and its stability over time. Techniques for assessing the reliability of the outcome are then reviewed, and we conclude that managers should be more aware of the limitations of segmentation studies.

Using the Juster Scale to Estimate the Demand-Price Relationship

Abstract The Juster scale was used to estimate the price-demand relationship for two branded products, Coca-Cola in cans, and Campbells Red and White Label soup. For each product predictions were obtained of the number of items that would be purchased, during the following four weeks, at each of two hypothetical prices, one above and one below the current retail price. Predictions were obtained using two variations on the Juster procedure: the multiple question method and the constant sum method. Actual numbers purchased were obtained in follow-up interviews. Actual purchases of Coca-Cola were almost exactly at the predicted level, but purchases of the soup brand were less than a third of those predicted. This is the first reported use of the Juster Scale to predict purchases of brands as opposed to products, or to estimate price-demand relationships.

A New Approach To TV Audience Measurement

This paper presents an innovative and potentially revolutionary alternative to the peoplemeter technology for measurement of television audiences.Peoplemeters, which were first introduced to commercial use in 1984, are now installed in more than 40 countries. Japan is alone among industrialised countries in continuing to rely on viewer diaries for television audience measurement.Peoplemeters are ciearly a more satisfactory approach than diaries; the data are available (through overnight telephone polling) much sooner, and there is some evidence that the data are more accurate than diaries (Friedman 1989; Rubens 1991). Certainly the method allows for analysis over periods much shorter than the quarter-hours of the diary method. There are however some problems with people meters. The first is that they can only be used with panels. The cost of recruiting and training households has to be amortized over as iong a period as possible, but his means that the problems of panel research - low final response rates, and possible unrepresentative members - camlot be avoided. The second is that the measurement depends on members of panel households accurately complying with the requirement that they log their presence by operating the buttons of the remote control device. Peoplemeter companies devote much effort and ingenuity to maximising compliance, and there is some research evidence that compliance is high. Unfortunately the evidence is not entirely convincing. A recent study in New Zealand (Danaher & Beed 1993) investigated compliance by telephoning panel members and comparing their self-reports of viewing with the behaviour recorded by the peoplemeter. In 92% of cases the panel member reported behaviour consistent with the peoplemeter record. Furthermore, the 8% non-compliers were made up of roughly equal numbers of over-reporting (peoplemeter showing viewing when panel member was not actually present) and underreporting. The audience measured by the peoplemeters was thus almost exactly the same size as the actual audience, as measured by coincidental self-report. From the point of view of advertisers however the interesting question

14.5 Development in Marketing Research: Analytical Techniques: New Applications

The Juster Scale is an eleven-point purchase probability scale that has provided a reasonably accurate method for predicting purchase rates (the proportion of people who will buy). This study examined the accuracy of three methods for using the Juster Scale to predict purchase levels, that is, the quantity of product people will buy. While two methods produced reasonably accurate predictions for most items, they can only be used in a face-to-face situation. A simplified procedure produced even more accurate results, and may be suitable for telephone interviews.