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HE marketing program of many firms is predicated on the assumption that their customers are heterogeneous with respect to purchasing habits. This assumption is often supported by data reporting that certain segments of customers buy more of a product than others. These customer segments are usually classified in terms of socioeconomic status, life cycle, location, and/or personality characteristics. The authors show that this simple view of market segmentation is not sufficient to provide an effective guide for management decisions. They advance a more precise conceptual framework for the evaluation of market segmentation as a strategy, based on estimates of the demand elasticities of individual market segments. In addition, they present the results of a research project aimed at estimating elasticities with respect to price and dealing activities for selected market segments for a frequently purchased food product. Their work represents an attempt to make the concept of market segmentation more operational and managerially meaningful. INTRODUCTION
Frank et al. (Fri,) studied this question.