Unfolding implementation in industrial market segmentation

Market segmentation is an important method of strategic marketing and constitutes a cornerstone of the marketing literature. It has undergone extensive scientific inquiry during the past 50 years. Reporting on an extensive review of the market segmentation literature, the challenging task of implementing industrial market segmentation is discussed and unfolded in this article. Extant literature has identified segmentation implementation as a core challenge for marketers, but also one, which has received limited empirical attention. Future research opportunities are formulated in this article to pave the way towards closing this gap. The extent of implementation coverage is assessed and various notions of implementation are identified. Implementation as the task of converting segmentation plans into action (referred to as execution) is identified as a particularly beneficial focus area for marketing management. Three key elements and challenges connected to execution of market segmentation are identified — organization, motivation, and adaptation.     

Normative Models and Practical Applications of Segmentation in Business Markets

This article attempts to add to the debate surrounding the application of existing normative and rational segmentation models within a business environment. The main theme of the research stems from current concern over the apparent gap between academic research that, until very recently, has followed normative and rational pathways and actual business practices of business segmentation. More specifically, we provide an empirical investigation into the extent that segmentation is applied within the UK pharmaceutical sector, and the bases employed at different stage of the process. The findings support current research that indicates that business markets are becoming increasingly sophisticated in the way that they apply segmentation practices. Furthermore, the results indicate that the adopted approaches are, to a large extent, consistent with normative models proposed by academics.     

Immigration,Labour Markets and Employment Relations: Problems and Prospects

In this review essay, I argue that immigration presents employment researchers with a promising strategic research site because it raises a number of theoretically significant problems with mainstream economic approaches to labour and labour markets. Despite the tendency to view economic migrants as homo economicus personified, I argue that immigration brings the institutional nature of labour markets into sharp relief as it exposes, among other things, the influence of the state, processes of labour market segmentation, and the role of trade union policy and practice. Having identified a number of empirical anomalies that contradict neoclassical economic theory, I proceed to sketch out three areas where a more institutionally oriented approach should prove more fruitful.     

Trust, power and transaction costs in B2B exchanges — A socio-economic approach

The advent of the Internet has enabled organisations to reconfigure their inter-organisational relationships. This study presents three frameworks to analyse the outcome that the use of Internet based electronic markets has on the nature of inter-organisational relationships: transaction cost economics, social exchange theory and an integrated framework that combines the first two. The integrated framework proposes that the nature of inter-organisational relationships depends on the interaction between the logic of transaction cost economics and the need for trust and interdependencies between exchange parties. A single case study is used to illustrate the way the three frameworks can be applied to analyse the use of electronic markets in inter-organisational exchanges. The study finds that the integrated framework provides a more complete understanding of inter-organisational relationships, and suggests a modular approach to the implementation of electronic marketplaces.     

Generalized linear interactive model for market segmentation: The air freight market

This study aims to provide a case study that improves the effectiveness of the macro segmentation approach. Generalized linear interactive model is applied to link macro indicators with customer consumption under the assumption of competition. The empirical portion of this study segments the air freight market of Taiwanese high-tech industry. Five segmentation variables are identified and examined using 511 air shipment contracts collected from 151 high-tech manufacturers. The study results conclude that market classification between forwarder and express is less clearly defined due to carriers' service enlargements and customers' changing needs. Shipment destination and size may still serve as effective market classifications to divide air freight market into twelve segments, whereas time in transit, shipment frequency, and product status, have lost their validation in segmenting the market. The segmentation examinations may help air carrier industry understand customer defection and attrition and provide strategic insights for targeting segments and positioning service strategies.     

The Fractal Structure of Real Estate Investment Trust Returns: The Search for Evidence of Market Segmentation and Nonlinear Dependency

This article presents a further test for market segmentation between the real estate market and the capital markets. We use rescaled range analysis developed in the fractal geometry literature to test for nonlinear trends in the returns series for different asset classes. We make three major conclusions: (1) the stock market displays tendencies consistent with a random walk, (2) portfolios of mortgage and equity REIT returns display tendencies consistent with a random walk and, (3) conditional upon the methods used, segmentation does not exist between different real estate markets and between the real estate and stock markets.     

Supporting the technology-push of a discontinuous innovation in practice

The hydraulic power generation business is usually faced with continuous innovation, meaning that progress is rather made in small than in large steps. Nevertheless, there are currently some examples of discontinuous innovation, the Powerformer -technology being one of them. The implying difficulties for successful innovation are internal communication and linking the technology to the most suitable markets. In order to proficiently push the Powerformer -technology onto the markets, an appropriate procedure is identified and implemented to practice.
First, a SWOT-analysis is used for assessing the competitive product concept of this discontinuous innovation. This contributed the specific calls for action. Second, the identified procedure for leveraging this technology-push aggregates the technology choice tool, roadmapping and a process for technology commercialization. As a result, specified market segments, a market penetration schedule as well as development and design aims were defined. This paper intends to give a practice example on how the mentioned methodologies were applied for the technology-push of a discontinuous innovation.     

Toward a comprehensive framework of value proposition development: From strategy to implementation

Value propositions (VPs) can play a major role for the strategy development and implementation process in B2B markets. While being recognized as one of the firm's most important organizing principles, the VP concept is still poorly understood and executed in many B2B firms and scholarly research provides limited guidance on how to develop and implement VPs in B2B markets. This article re-assesses the VP in the context of both strategy and implementation. It undertakes a review of extant conceptual frameworks and identifies key elements that are overlooked and/or not addressed. A new conceptual framework for addressing VP design and development is offered, which incorporates five key interrelated phases of implementation that need to be comprehensively addressed. This research provides a theoretically sound and practically applicable VP development framework, integrating the firm's strategic considerations, ensuring a fit between its business model and customers' needs, and reflecting the nature of B2B markets through its dynamic perspective. In addressing key implementation issues, the article provides firms with a robust approach to addressing the dynamic competitive environment, as well as taking into account changing customer needs.     

MARKET SEGMENTATION WITH NONLINEAR PRICING*

We study the benefits and drawbacks of allowing firms to offer different price‐quality menus to captive consumers and to consumers more exposed to competition (market segmentation). We show that the effect of market segmentation depends on the relationship between the range of consumer preferences found in captive and competitive markets. When the range of consumer preferences in captive markets is ‘wide,’ segmentation is quality and (aggregate) welfare reducing, while the opposite holds when the range of consumer preferences in captive markets is ‘narrow.’ Segmentation always harms captive consumers, while it always benefits consumers located in competitive markets.     

Industrial market segmentation by the structure of the purchasing process

This article presents a methodology for segmenting industrial markets on the basis of functional involvement in phases of the purchasing decision process. A decision matrix is developed as a structured measurement instrument to collect information about the composition of decision making units within target firms. The implications of this segmentation approach for industrial marketing strategy formulation are discussed.     

实际税负对会计稳健性的影响研究——基于所得税改革后中国A股上市公司数据的实证分析

本文以2008-2011年A股上市公司为样本,在Basu模型的基础上加入实际税负变量分析了新企业所得税法实施以来所得税因素对会计稳健性的影响。研究发现,2008年我国实施新企业所得税法以来,我国上市公司财务报告呈现出稳健性特征。企业实际所得税税负与会计稳健性正相关,证实了税收因素是会计稳健性的重要动因,为税务机关与会计准则制定机构之间的协调提供了经验证据。     

Political economy of international diversification: The case for partial integration

The literature on international portfolio diversification explored the benefits of international diversification and the pricing of securities in an international context largely from the perspective of an integrated world capital market. Imperfections in the international markets were acknowledged as exogenous variables added to the basically integrated market, and their effects on security prices, consequences of diversification,etc, were then measured. All studies are related, explicitly or implicitly to two extreme situations. One extreme situation is complete segmentation, the other is perfect market integration. This paper begins with a literature review to illustrate the inadequacy of either of the extreme situations described above. A case of partial integration where the barriers are an endogenous part of the model is then presented. Indirect and circumstantial evidence that the international financial markets are partially integrated by design, and not as a result of market failures, is then presented as a preliminary validation of the partial integration model.The authors are thankful for the very valuable comments of Professor Peter Kaus of UCR.     

Don't adapt,shape! Use the crisis to shape your minimum viable system – And the wider market

In addition to being resilient and adaptive, firms should also utilize shocks such as COVID-19 to generate new business opportunities. Two processes make markets and other economic systems more malleable during times of crises: (1) as the stasis of the market system is interrupted, it forces the system “into movement” - and it requires less effort to nudge an already moving system in a specific direction; and (2) as deeply-rooted mental models are challenged during crises, any market-shaping initiative which promises a credible end to current instability with a new equilibrium will appeal to the natural human craving for stability. This malleability, in turn, creates multiple opportunities for firms to shape their markets and hence drive the market's development in favorable directions. We outline a generic process of market-shaping, comprising eight steps: (1) determining whether to act now or actively wait, (2) deciding whether to be a shaper or a supporter, (3) developing a scalable vision for the future market, (4) recognizing the minimum viable system linked to this vision, (5) driving changes in market-level properties, (6) securing that value is quantified and shared, (7) inviting actor engagement for implementation, and (8) defending against possible retaliations from threatened market systems.     

Supplier segmentation using fuzzy logic

Supplier segmentation means that the suppliers of a specific firm are categorized on the basis of their similarities. This supply-side business-to-business (B2B) segmentation is of special importance to companies with many suppliers. Supplier segmentation yields a manageable number of segments, each of which requires a separate strategy. Standard supplier segmentation methods have serious shortcomings, for instance because they fail to make a proper connection between supplier segmentation and other supplier-related activities such as supplier selection and development. Moreover, these standard methods typically use a limited number of segmentation criteria and different sets of criteria are suggested for each method. It is unclear for practitioners how to choose a particular method. The purpose of this paper is to form a practical tool for supplier segmentation taking into account all suggested segmentation criteria. The principal result of this paper is the design of a rule-based method to segment the suppliers of a firm based on two overarching dimensions: supplier capabilities and supplier willingness. The method is applied to a real-world situation to show how the results can be used in practice. A general sensitivity analysis procedure for fuzzy rule-based systems is proposed and then implemented, to identify the most important supplier capabilities and willingness criteria and to formulate better supplier development strategies. A major conclusion of the paper is that the fuzzy logic approach to supplier segmentation is simple to apply in practice, yet considers all available segmentation criteria and their inherent fuzziness in a way that is easily adaptable to a specific industrial context.     

An Approach to Industrial Real Estate Market Segmentation and Valuation Using the Arbitrage Pricing Paradigm

This paper investigates whether a segmented market exists for industrial real estate with respect to risk and return characteristics. Given the existence of industrial market segmentation, the next issue examined is whether a submarket perspective or an integrated real estate market orientation provides better rate of return estimates for individual industrial properties using an Arbitrage Pricing Theory (APT) framework. The results support the existence of regional markets for industrial real estate. A submarket orientation rather than an integrated perspective is also found more appropriate in predicting returns on industrial real estate.     

Resource Dependency,Innovative Strategies,and Firm Performance in BOP Markets

Low‐income markets have attracted the interest of academics, politicians, and business leaders alike. In recent years, numerous companies such as Unilever, Cemex, Tetrapak, and Vodafone have provided evidence that low‐income markets offer commercial business opportunities and that private companies can realize profitable business activities while simultaneously contributing to the alleviation of poverty. However, companies are challenged by constraining conditions such as poor infrastructure, nonexistent distribution channels, illiteracy, corruption, lack of enforceable legal frameworks, and violent conflicts when entering those markets. In order to succeed, companies develop new strategies, introduce innovative business models, and develop novel capabilities. Three innovative practices are commonly named in the literature that should enable companies to operate successfully in low‐income markets: (1) integrating the local population and local entrepreneurs to cocreate products; (2) cooperating with nontraditional or fringe stakeholders; and (3) building local capacity, which means improving the market conditions of low‐income markets. This study applies a resource dependence perspective as it provides valuable explanations on the interaction between companies and their environment, how companies cope with environmental constraints, and how the environment and different strategies affect business outcomes. By integrating a resource dependence perspective, the study theoretically frames the strategic recommendations of the literature and answers the underlying research question of whether environmental conditions of low‐income markets cause the execution of innovative practices and whether such practices influence the outcome of companies operating in low‐income markets. The research hypotheses are tested in a structural equation model against data of 103 firms operating in low‐income markets. The study reveals that companies integrate local actors to cocreate products and cooperate with nontraditional and fringe stakeholders to reduce resource dependency. Local capacity building, which means improving the local environment, is only applied by companies when strong partnerships with nontraditional and fringe stakeholders are established. Finally, the study shows that partnerships with nontraditional and fringe stakeholders as well as local capacity building have a positive effect on organizational performance. Thus, when companies aim to enter low‐income markets, they should not follow the recommendation of the transaction cost theory and internalize resources, but rather cooperate with nontraditional partners and invest in the local environment. Moreover, the study shows that market entries into low‐income markets require long‐term commitments to engage in partnerships with regional authorities, local community groups, and nongovernmental organizations. Without these partnerships, it is not possible to reduce high resource dependencies and to establish successful businesses in low‐income markets. Thus, governments should create general conditions that facilitate the creation of partnerships between nontraditional actors and companies, and assist them to improve environmental conditions in these markets.     

National Vacancy Rates and the Persistence of Shocks in U.S. Office Markets

In this paper, we develop and estimate a model that decomposes the variance in office vacancy rates into market-specific, time-specific, and random components. The results indicate significant differences in natural vacancy rates across markets. We also find some persistence in deviations from these natural vacancy rates. The analysis is applied to both central business district (CBD) and suburban office markets. We find that natural vacancy rates differ across CBD markets and across suburban markets. Further, the persistence of disequilibrium in one CBD market seems to differ significantly from that in another. This is not shown to be true for suburban markets.     

What Makes a Good Export Channel Relationship?

Within international business, distribution channel management is a key concern. Relationships between exporting firms and other members of the international distribution channel can significantly impede or enhance performance in export markets. This study adopts an inductive research approach to examine what makes a good relationship in distribution channels in Southeast Asian markets (Singapore, Malaysia, Indonesia). An extensive range of relationship elements are identified. The relationship between the two key elements of trust and mutual benefit is found to be reciprocal in nature and dynamic. Necessary conditions for, and influences on, development of trust and mutual benefit are identified.     

Five common factors in top performing industrial firms

This article presents the findings of an investigation into the role and practice of marketing in the United Kingdom. The authors have isolated from a larger survey the companies operating primarily in industrial markets (560 companies in total). Of these 560 companies, 73 (13%) have been identified as particularly successful on the basis of both market and financial performance. These “Top Performers” are profiled and compared with the remainder of the industrial marketing companies (termed here “Others”) across their various marketing activities. A clear picture emerges of the ingredients for success in industrial markets.