Benefit segmentation
Benefit segmentation, developed by Haley[10 ] attempts to describe the relationship of customers to the product (or service)[11]. Haley[ 10] contends: The belief underlying this segmentation strategy is that the benefits which people [customers] are seeking in consuming a given product [or service] are the basic reasons for the existence of true market segments.
According to Beane and Ennis[12]: The aim of benefit segmentation is to determine why a person buys[buyer chooses] a product[or service] and, therefore, why similar people might buy the product if the benefit is communicated to them.
Benefit segmentation is useful in that it suggests why particular groups of customers choose the service and may help to provide a better understanding of the needs of a particular market. Some of the advantages of benefit segmentation are its high degree of flexibility (it can be applied in both consumer and industrial markets) and its emphasis on causal rather than descriptive factors[13]. Benefit segmentation has been applied to industrial market segmentation with varying results and conclusions (see, for example [14]). According to Moriarty and Reibstein[15] benefit segmentation has not as yet been widely used in the industrial market for two main reasons:
• The data required for benefit segmentation are not straightforward and are relatively expensive to collect.
• Identification (profiling) and accessibility of benefit segments is more complex than for segments derived from traditional bases.
Industrial service segmentation
However, few of the many developments in segmentation have been applied to service industries which cater to industrial markets. Two exceptions to this neglect are McGinnis[16 ] who developed market segments based on shipper attitudes in a freight market and Collison[17] who explores the needs of various segments in the market for a shipping service between the Pacific North West of the USA and central Alaska.
This article will consider the construction and profiling of benefit segments for purchasers of Irish Sea freight transport services. These benefit segments may subsequently form the basis for resource allocation by companies providing the freight transport services.
Freight transport services
Much research has examined factors or aspects of the service which are considered to be important in the choice of a freight transport service (see, for example[18,19,20,21,22]). It has been suggested[23] that further work should examine inter-relationships between the various influences on freight service choice; for example, freight rates and quality of service. This article utilizes a benefit segmentation[ 24] approach to examine such inter-relationships for shippers purchasing freight transport services between Great Britain and Ireland (both Northern Ireland and the Republic of Ireland).
The relationships between service choice factors take the form of a hierarchy or prioritization of service choice factors. In purchasing a freight transport service the buyer is attempting to fulfil certain criteria relating to individual needs, for example, a service with a short transit time may be required for a particular shipment. These choice criteria may be represented as “benefits” which the buyer wishes to gain from the purchase of the freight transport service. Benefit segmentation suggests that within a market there may be groups of buyers who have similar sets of priorities, or criteria, when purchasing a freight transport service. These groups of buyers with similar needs form benefit segments. From a strategic marketing standpoint, however, it is insufficient to develop benefit segments within a market without also developing some other means to identify (profile) and differentiate between segments.
In this study, four sets of variables are used to profile benefit segments. They may be broadly categorized as:
• Product characteristics.
• Transport service characteristics.
• Company demographics.
• Control variables, including payment for the transport service.