Imran S. Currim (1981), “Using segmentation approaches for better prediction and understanding from consumer mode choice models," Journal of Marketing Research, 18, 301-309.
The basic proposition of this paper is that
segmentation of consumers should allow one to make better predictions
because different groups behave differently. That is what we call 'common
sense' in marketing. Sometimes, of course, our common sense is wrong;
hence, the present study seemed like a worthwhile undertaking. The
proposition was tested on the prediction of transportation mode choice
(e.g. auto or bus) between two geographical points. But it was not the
actual choice, merely the mode the consumers say they would take if
they happened to make that hypothetical trip. The study was done with the
competence, energy, complexity, and obscurity demanded for a Ph.D. thesis
(which it was). However, the two segmentation schemes, one yielding 10
'benefit segments' did not yield more accurate predictions of
overall market shares for five possible mode choice for a hold-out sample
of about 170 subjects. The average error for the segmented models was
identical to that of the aggregate model. In addition to being surprising,
the results are disappointing. Should we abandon our common sense notions?
Currim takes a different approach. He concluded that the segmentation
approach helped–which it did for one of the two schemes used, while it
hurt for the other.