1 Services Segmentation Priceline.com

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan2 Segmentation Identify and profile distinct groups of buyers who might require separate product and/or marketing mixes A rational adjustment of product and marketing effort to consumer/user requirements Key concept: CONSUMER DIFFERENCES (Consumer Heterogeneity).

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan3 Segmentation – American Cable TV

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan4 Bases for Segmentation Primary: Determinants of consumption or transaction utility –e.g., benefits sought, usage behavior, (who, what, where, when, how, why?). Secondary: Addressable characteristics related to primary segmentation basis (mostly for profiling) –e.g., geographic, demographic

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan5 Benefit Segmentation

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan6 Segmentation in Services Product Segmentation –Heterogeneity due to variations in the valuation of consumption utility Services Segmentation –Heterogeneity due to variations in the valuation of Consumption utility Transaction utility

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan7 Segmentation: The Services Perspective (contd.)

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan8 Segmentation – Retail Financial Services in Asia

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan9 Segmentation: An Illustration British Airways 35% of customers generate 60% of sales segment specific services –Concorde, First Class, Club Europe, Club World, Euro Traveller, World Traveller and domestic Shuttle value to segment = overall benefit –core product + supplementary service –payoffs = Virgin Limo Service!

P4 Sept/Oct -2003Services Marketing – Professor V. Padmanabhan10 Priceline.com - Today