Background

A widely used concept within marketing is market segmentation, which companies use to create value. Many researchers have focused on different approaches to market segmentation and the segmentation process, but little attention has been given to how one can evaluate such a process. The thesis is written on behalf of the Swedish company Svenska Cellulosa AB that is currently working on a market segmentation project for their baby products category.

Purpose

The purpose of this thesis is to develop a standardized process for evaluating and measuring the value of a segmentation process. The evaluation process will then be used to give recommendations to SCA on how they can evaluate their own segmentation process.

Method

To better understand how companies utilize market segmentation, but also how and if they measure the value of such a process, this thesis is conducted using a qualitative approach.

The authors chose to collect the primary data through interviews with selected companies. The information gained from the interviews was then used to build three case-studies. The secondary data was collected from reviewing both scientific journals and textbooks concerning the relevant topic. The interviews were further analyzed using qualitative analysis techniques and based on the analysis a segmentation evaluation process was then developed.

Conclusion

The authors have found some common denominators among the case study companies on how they utilize segmentation to create value. However, none of the companies had developed a structured process to evaluate their segmentation process. By matching the case study findings with the frame of reference in relation to the research purpose the authors were able to develop a standardized segmentation evaluation process. This process was then used to give recommendations to SCA regarding their segmentation project.