Performing market segmentation: A performative perspective · Performing market segmentation: A...

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Performing market segmentation: A performative perspective Venter, P, Wright, A & Dibb, S Author post-print (accepted) deposited by Coventry University’s Repository Original citation & hyperlink: Venter, P, Wright, A & Dibb, S 2015, 'Performing market segmentation: A performative perspective' Journal of Marketing Management, vol 31, no. 1-2, pp. 62- 83 https://dx.doi.org/10.1080/0267257X.2014.980437 DOI 10.1080/0267257X.2014.980437 ISSN 0267-257X ESSN 1472-1376 Publisher: Taylor and Francis This is an Accepted Manuscript of an article published by Taylor & Francis in Journal of Marketing Management on 17 th November 2014, available online: http://www.tandfonline.com/10.1080/0267257X.2014.980437 Copyright © and Moral Rights are retained by the author(s) and/ or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This item cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder(s). The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders. This document is the author’s post-print version, incorporating any revisions agreed during the peer-review process. Some differences between the published version and this version may remain and you are advised to consult the published version if you wish to cite from it.

Transcript of Performing market segmentation: A performative perspective · Performing market segmentation: A...

Performing market segmentation: A performative perspective Venter, P, Wright, A & Dibb, S Author post-print (accepted) deposited by Coventry University’s Repository Original citation & hyperlink:

Venter, P, Wright, A & Dibb, S 2015, 'Performing market segmentation: A performative perspective' Journal of Marketing Management, vol 31, no. 1-2, pp. 62-83 https://dx.doi.org/10.1080/0267257X.2014.980437

DOI 10.1080/0267257X.2014.980437 ISSN 0267-257X ESSN 1472-1376 Publisher: Taylor and Francis This is an Accepted Manuscript of an article published by Taylor & Francis in Journal of Marketing Management on 17th November 2014, available online: http://www.tandfonline.com/10.1080/0267257X.2014.980437 Copyright © and Moral Rights are retained by the author(s) and/ or other copyright owners. A copy can be downloaded for personal non-commercial research or study, without prior permission or charge. This item cannot be reproduced or quoted extensively from without first obtaining permission in writing from the copyright holder(s). The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the copyright holders. This document is the author’s post-print version, incorporating any revisions agreed during the peer-review process. Some differences between the published version and this version may remain and you are advised to consult the published version if you wish to cite from it.

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Performing market segmentation: A performative perspective

Peet Venter (corresponding author)

Graduate School of Business Leadership

University of South Africa

Midrand 1686

South Africa

[email protected]

Tel: +2782-486-6801

Peet Venter is a Professor of Strategy at the Graduate School of Business Leadership at UNISA.

His research interests include strategy and marketing processes and practice. He is the editor of

three books and has published in the areas of marketing intelligence, customer relationship

management and customer retention.

Alex Wright

Open University Business School

Open University

Milton Keynes, MK7 6AA

United Kingdom

Alex Wright is Lecturer in Strategy at The Open University Business School, UK. He received his

PhD. from Nottingham University. His research interests focus on performativity, the

communicative constitution of organisation, discourse, strategy as a practice, routines and

qualitative epistemologies.

Sally Dibb

Open University Business School

Open University

Milton Keynes, MK7 6AA

United Kingdom

Sally Dibb is Professor of Marketing and Director of the Institute for Social Marketing at the Open

University Business School. Her research interests are in consumer behaviour, marketing strategy,

and social marketing, on which she has published extensively. She has written seven books and has

published in the Journal of the Academy of Marketing Science, European Journal of Marketing,

Tourism Management, Industrial Marketing Management, Long Range Planning, and European

Journal of Operations Research, among others.

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Performing market segmentation: A performative perspective

Abstract

Conceptualising market segmentation as performative enhances our knowledge of how marketing

frameworks shape marketing practice. Our study addresses the criticism that how marketing is

accomplished in practice has yet to be fully articulated. We therefore address the question: ‘How

does a market segmentation process emerge in an organisation and what causes it to materialise in

this way?’ By constructing market segmentation as performative, we are able to draw insight into

the relationships that marketing theories, models, ideas and techniques have with marketing

practice. Our longitudinal study allows us to discern four sets of actions organisations can

experience as their actors attempt to adopt and adapt a marketing process to the complexities of

practice, these are: establishing legitimacy, theory embodiment, contextualization and maintaining

the process.

Summary statement of contribution

We claim two contributions to theory. First, the messy, pragmatic and iterative nature of market

segmentation is described, which extends existing knowledge of how this important and costly

process is realised. Secondly, framing market segmentation as performative allows us to draw

insight into how the segmenting of a market shapes, and is shaped by, marketing practices.

Keywords

Market segmentation; performativity, marketing as practice, theory, case study

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Introduction

Conceptualising market segmentation as performative enhances our knowledge of how theoretical

descriptions of marketing approaches shape marketing practice. This research is needed because we

remain unclear concerning what value practitioners gain from applying marketing approaches in

practice (Yankelovich & Meer, 2006). Grapentine and Boomgaarden (2003) report that despite the

excitement they generate, market segmentation projects often fail or result in wasted effort.

Considering the significant investment of time and money associated with conducting and

implementing a market segmentation programme, this is a matter of concern that warrants further

investigation. Disquiet has been expressed over the empirical and conceptual focus of some

segmentation field studies (e.g. Quinn & Dibb, 2010); leading Dibb and Simkin (2009a, p. 220) to

caution that “despite its long academic heritage, segmentation may be failing to achieve its original

objectives”. Research is yet to fully engage with how market segmentation actually unfolds in

organisations and consequently fails to speak to practitioners of their lived experiences. Such

criticisms result in calls to rethink how research into the practices of marketing is accomplished

(Andersson, Aspenberg &Kjellberg, 2008; Bailey, Baines, Wilson & Clark, 2009; Dibb & Simkin,

2009a, 2009b; Foedermayr & Diamantopoulos, 2008; Harrison & Kjellberg, 2010; Steenkamp &

Ter Hofstede, 2002). The performative approach we adopt sheds light on how a marketing process,

market segmentation, is constituted in practice by organisational actors.

We adopt and adapt the notion of performative as first articulated by the philosopher J. L. Austin

whose series of lectures delivered at Harvard University in 1955 outlined an ontological framing of

social reality as constituted through certain verbal utterances (Austin, 1975). Austin argued that

communication is capable of more than mere representation or description, that is, specific

instances of speech create that to which they refer. A commonly cited example of such a

performative utterance is when during the naming ceremony of a ship the words “I name this ship

the Queen Elizabeth” (Austin, 1975, p. 5) are pronounced. These words, Austin argues, do not

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merely represent, express or describe, they constitute. Their utterance creates the act. Since its

speech act theory origins, the concept of performative/performativity has been drawn from by

various disciplines to help describe and explain how social realities are produced and experienced.

Recent studies in marketing have offered a performativity reading of how marketers constitute

markets and marketing (e.g. Araujo, 2007; Harrison & Kjellberg, 2010; Kjellberg & Helgesson,

2006, 2007a, 2007b, 2010). The practice of marketing is viewed as an ongoing accomplishment

(Kjellberg & Helgesson, 2010) that unfolds through a conversation (human) and materiality (non-

human) dialectic (Kjellberg & Helgesson, 2006). Araujo (2007, p. 211) argues that marketing

practices are performative as they create the phenomena they purportedly describe. While inroads

have been made into articulating a performativity understanding of marketing, the considerable

possibilities such an approach holds are yet to be realised (Kjellberg & Helgesson, 2006, 2007a).

Our interest lies in utilizing performativity theorizing to understand how market segmentation is

accomplished. In particular, we address the dearth of empirical research on market segmentation

implementation (Boejgaard & Ellegaard, 2010, p. 1294). We construct market segmentation as a

marketing process that is realised in practice through the combined actions of organisational actors

and material texts. Approaches, alongside theories, techniques, models, concepts, procedures, data-

sets et cetera (MacKenzie, 2007b, p. 55) have constitutive qualities that inter-relate to construct

marketing as practice. Our interest lies in describing how marketing techniques influence and shape

practice over time. The research question that guides our study is ‘How does a market segmentation

process emerge in an organisation and what causes it to materialise in this way?’ We claim two

contributions to theory. First, market segmentation as a messy, pragmatic and iterative

accomplishment is described, which extends existing knowledge of how this important and costly

process is realised. Second, framing market segmentation as performative allows us to draw insight

into how the segmenting of a market shapes and is shaped by practices.

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The next section explores the literature around market segmentation, highlighting the criticisms of

market segmentation research that strengthen our argument for framing it as performative. We then

review a development of Austin’s notion of performativity advanced by MacKenzie and colleagues

who continue to explore the question, “What does it mean to say that economics is performative?”

(MacKenzie, Muniesa & Siu, 2007, p. 4). This section is followed by a description and justification

of the research methodology employed. The findings section presents data drawn from the field. A

discussion follows that relates back to our research question and substantiates our two claimed

contributions. A brief conclusion completes the paper.

Literature review

Market segmentation is central to marketing strategy and a key decision area for organisations in all

sectors (Weinstein, 2004). The origins of the concept are in economic pricing theory, which

suggests that maximum profits are achieved when pricing levels discriminate between segments

(Wind, 1978). Grouping together customers with similar product preferences and buying behaviour

aids organisations in dealing with market heterogeneity, thereby focusing resources on relatively

homogeneous customer segments and thus ensuring an efficient allocation of resources (Smith,

1956). A well-established process, often shortened to STP (segmenting, targeting and positioning)

is offered in the literature as a means for carrying out market segmentation (Kotler, 1994). The first

stage, segmenting, sees customers with similar needs and buying behaviours grouped into segments

using one or more variables. Stage two, targeting, involves making resource allocation decisions

that determine the segments to be prioritized; while the third stage, positioning, entails the

development of marketing programmes that are appropriate for the targeted segments.

Despite the apparent simplicity of the STP process (LaPlaca, 1997; Weinstein, 2004; Wind, 1978),

operationalizing market segmentation in practice remains a significant challenge for organisations

(e.g. Dibb & Simkin, 2008; Goller, Hogg & Kalafatis, 2002; Palmer & Millier, 2004; Quinn, Hines

& Bennison, 2007). A major difficulty is that the theoretical description of the STP process fails to

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acknowledge the numerous restrictions imposed by the organisational context and resources. There

is, therefore, a poor fit between theoretical explanations of the market segmentation process and

practical applications (Crittenden, Crittenden & Muzyka, 2002; Sausen, Tomczak & Herrmann,

2005). These problems reflect a tension between the empirical focus of segmentation research and

practitioner needs. In a recent review of academic research priorities in segmentation, Quinn and

Dibb (2010: 1241) speak of a “gulf between the needs and interests of academics and practitioners”,

which they say reflects “the conceptual and empirical focus of market segmentation research

(Foedermayr & Diamantopoulos, 2008; Yankelovich & Meer, 2006)”. Thus, while academic

researchers have focused on theoretical and technical issues around variable selection and

identifying statistically robust outcomes (e.g. Green & Krieger, 1991; Mitchell, 1994), practitioners

must tackle practical and pragmatic implementation problems (Laiderman, 2005), such as ensuring

efficacious solutions (Wedel & Kamakura, 2000); justifying high financial segmentation costs

(Weinstein, 2004); tackling data availability problems (Simkin, 2008); acquiring sufficiently skilled

personnel (Dibb & Simkin, 2008); and, overcoming operational difficulties and cultural resistance

to change (Beane & Ennis, 1987; Clarke & Freytag, 2008). Against this backdrop there remains a

pressing need for studies that focus on the complex conditions and operational problems

confronting managers (Wedel and Kamakura, 2002).

A consequence of this separation in the literature between the planning and doing of market

segmentation is that once a segmentation plan exists, it is marketing practitioners who are tasked

with making it work (Boejgaard & Ellegaard, 2010). Given the complex and detailed actions

involved in operationalizing market segmentation, there is a particular need for studies that uncover

the underlying mechanisms, actions and relationships through which segmentation is realised.

Market segmentation in practice, it seems, is altogether messier than the literature implies. In

viewing market segmentation as performative, it becomes possible to better understand this

messiness and to unpick the politicking and practices surrounding it.

The relatively scant attention devoted to the detailed activities that underlie marketing processes is

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not confined to market segmentation alone. The broader context for this shortfall is that marketing

has lagged behind some other areas of management in describing and codifying the specific

activities that managers undertake (Skålén & Hackley, 2011; Svensson, 2007). In their study

examining the nature of marketing practice, Dibb, Simões and Wensley (2014) highlight a paucity

of research examining what they call the ‘micro-level marketing practices’. Responding to calls

from Kjellberg and Helgesson (2006), they argue for a more nuanced understanding of marketing

practices at the level of the specific tasks that marketers undertake. Such approaches, they suggest,

will bring benefits: a more bottom-up perspective will emerge, offering the potential to shed light

on “emergent and unfolding practices that actors engage in” (Araujo, Kjellberg & Spencer 2008, p.

7); it will provide detailed insights into how practitioners undertake marketing activities (Grönroos,

2006; Skålén & Hackley, 2011); and ultimately will support a deeper understanding of the

connection between marketing practice and organisational performance.

These are among the reasons why marketing research has taken a performativity turn in recent years

(e.g. Araujo, 2007; Harrison & Kjellberg, 2010; Kjellberg & Helgesson, 2006, 2007a, 2007b,

2010). Kjellberg and Helgesson (2006, p. 842) consider that a focus on market practices encourages

a view of marketing practices that integrates the sellers who market goods with those who buy

them; and, in the process provides a micro-level focus on how such activities are accomplished. A

practice focus is sensitive toward a relational ontology (Emirbayer, 1997); which holds that it is not

entities or things such as marketing theories, ideas or approaches that are in and of themselves

consequential, but how they relate to other things and entities that reveals something of how the

mangle of marketing practice (Pickering, 1993) is constituted. To study practitioners engaged in

relational practice as it unfolds is challenging (Araujo, et al., 2008), which goes some way to

explain the dearth of practice studies in marketing. However, a first step is to move the analytical

focus from an aggregated level (cf. Andersson, et al., 2008), what Latour (1986) termed the

ostensive, to what he called the performative. By refocusing the analytical lens on the relational

practices of marketing it becomes possible to describe what marketing is, of what it is made, what

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are its parts and how they constitute the whole (Latour, 1986).

Kjellberg and Helgesson’s (2007a) performativity-inspired consideration of market segmentation

exposes a key assumption in research that is not sensitised to how social realities are constituted. As

the STP process implies, traditional studies address segmentation as an epistemological issue:

segments objectively exist and it is the task of the marketer to unveil them. A performativity lens

frames market segments as an ontological statement, as they are described and, through such

communicative acts, constructed (Hagberg & Kjellberg, 2010; Kjellberg & Helgesson, 2007a).

Conceptualizing segmentation as performative encourages researchers to inquire into how ‘strings

of association’ (Cooren & Fairhurst, 2009) comprised of human and nonhuman dialectics

(Andersson, et al., 2008) co-orient towards the constituted ‘object’ that becomes segmentation. Of

particular interest to those interested in how relational strings of associations perform and produce

practice, are the ways that theories, ideas, approaches and models materially interact with the moves

of actors. Such questions, for example, have occupied MacKenzie and motivate his studies of the

sociology of economics.

Building on the theorizing of Austin (1975) and Callon (1998), sociologist Donald MacKenzie has

perhaps contributed most to articulating the complex relationships between models, theories and

approaches, and practice. MacKenzie’s initial work analysed how the Black-Scholes-Merton model

of options pricing influenced and shaped the behaviour of economists operating in the Chicago

Board Options Exchange during the 1970s (see MacKenzie, 2003, 2003, 2007, MacKenzie & Millo,

2003; MacKenzie, Muniesa & Siu, 2007). When it first appeared, the Black-Scholes-Merton model

claimed to show how options could be disentangled from any moral framework and proved and

hedged as part of the normal operations of mature efficient capital markets (MacKenzie, 2007).

Initially, the model offered a relatively poor fit with market prices (MacKenzie, 2007), and failed to

offer traders a quick and straightforward means for accurately identifying the price of options. At

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this time the model displayed no performative qualities. However, the model proved attractive and

compelling to traders and the materiality that accompanied it made it easy for them to use. Despite

its relatively poor fit, over time it was increasingly used by traders in the Exchange who gradually

altered their behaviour so that the model became a more accurate representation of practice.

MacKenzie drew from performativity theory to explain how this ill-fitting model could over time

become performative: meaning that the model changed the behaviour of the human actors that

adopted it such that the practices they were producing and reproducing began to resemble the

Black-Scholes-Merton model more and more. MacKenzie’s findings relate to how an economic

model through its consumption created the reality it purported to represent. Marketing models,

approaches and processes do not claim to represent reality, but do claim to help practitioners order

reality into something manageable and beneficial to their aims. In short, marketing approaches like

segmentation claim to help sellers sell and buyers buy. MacKenzie’s work developing the notion of

performativity is instructive for his focus on the inter-relating of models, ideas and approaches with

practice, as it provides those interested in articulating a view of marketing as practice with a

language for describing and explaining how marketing emerges in the form that it does. From his

research, MacKenzie (Table I) distinguished three different kinds of performative relationship

approaches and practice can display. Counterperformativity was also identified, which can be

discerned when the connection between a model and the practice it stimulates becomes

progressively disentangled.

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Table I Three kinds of performativity and counterperformativity

Type of performativity Key characteristic Relationship strength Research interest

Generic Models, theories, ideas and approaches used but with little significant impact

The relationship is weak and does not significantly affect practice

When a theory or idea is assumed to have a strong effect on practice but its investigation reveals this not to be the case. When mundane, taken-for-granted practices are disrupted and inquiry reveals those practices to have little relation with the theories they were assumed to represent.

Effective Models, theories, ideas and approaches that have an effect on marketing processes

The model makes a difference to how processes are accomplished. These processes differ from those organisations where the model is not used. The relationship strength is significant.

When an approach makes a difference, but not in the ways necessarily expected. Rewards investigation, as complex relationships between approaches and practice are revealed that prove insightful.

Austinian Use of a model, theory, idea or approach changes workplace processes such that resemble the idea or approach more and more.

A strong relationship is distinguishable. Likely to be empirically rare in marketing studies.

What is most commonly assumed to be the relationship between theory and practice, yet may be difficult to realise due to the complexities of practice. Because this pure form of performativity is likely to be rare, the translations processes adapting an approach to a specific context reward investigation for the insights into practice and theory they promise.

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Type of performativity Key characteristic Relationship strength Research interest

Counter-performativity Use of a model, theory, idea or approach makes workplace processes appear less like they depicted in the idea or approach.

A declining relationship can be discerned. Unlike Austinian performativity, what is done in practice resembles the idea less and less, and can result in its opposite affect being realised.

Sometimes called overflowing, or misfires (Callon, 2010), and perhaps the most analytically revealing of all types, this construct can be observed through longitudinal tracking of an approach and its use over time. May help to question the efficacy of some long-standing marketing theories and ideas.

Source: Distilled from D’Adderio (2008), MacKenzie (2004, 2006a, 2007), Cabantous, Gond & Johnson-Cramer (2010), Kjellberg & Helgesson (2006), and Callon (2007).

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In summary, our study addresses two gaps in the literature. First, a detailed understanding of the

practice of segmentation, or how segmentation is actually accomplished in practice, is yet to be

fully articulated. We know much about the concepts and processes of market segmentation, but

rather less about how practitioners actually set about the complex task of realising the segmentation

process in practice. Second, of the relatively few marketing studies that have adopted a

performativity lens, most have drawn inspiration from Callon and have discussed how markets are

made (e.g. Kjellberg & Helgesson, 2007, 2010). Our focus, inspired by the studies by MacKenzie,

is on how marketing processes are performed in practice. Therefore, our objective is to extend

understanding of how marketers accomplish their craft by constructing insights into the practice of

market segmentation. In so doing, we unpick the complex and multifaceted relationships that

marketing processes, such as segmentation, enjoy with entities inside and outside the organisation

and marketing practices. By addressing these interrelated aims and developing a deeper

understanding of the how and why of market segmentation implementation, we contribute

significantly to our developing knowledge of marketing theory and practice.

Research methodology

This research involved a longitudinal case study situated in the business sales division, an SBU

(strategic business unit) in ICT Co SA, a large national ICT services organisation majority owned

by a European multinational company (MNC). Figure 1 summarises the organisation at the time

that the research commenced. A single case study approach was appropriate because it enables a

detailed examination of the practices associated with the segmentation project, beginning with the

early planning stages and running through to implementation and beyond. Bonoma (1985) contends

that qualitative case study research is appropriate in marketing research when the phenomenon

(such as market segmentation implementation) being studied cannot easily be observed outside of

its natural setting, and where it is so complex that it cannot be quantified. This notion is supported

by those studying performativity who have drawn extensively on single cases as they involve the

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in-depth and prolonged study of complex processes such that their relationship with models,

theories and ideas can be established (e.g. MacKenzie, 2007b; Kornberger & Clegg, 2011; Ottosson

& Galis, 2011).

The first author was able to use his role as an academic consultant with ICT Co SA to achieve the

good quality access needed to closely observe the unfolding market segmentation process, and we

accordingly used a participant observer approach. Our qualitative study reflects the requirement for

multiple data sources in case construction (Bonoma, 1985), as it draws from: participant

observation, document analysis, and personal interviews. In this instance, the participant observer

had access to a plethora of artifacts (data, communications, reports, online databases, and

presentations) and was engaged in many hours of formal meetings, informal discussions and e-mail

exchanges with key players in the organisation’s head office and eight regions.

The research project unfolded along the lines described in the first two stages of the case study

process proposed by Bonoma (1985). The first author has been involved with the organisation

since 2004 as an academic consultant. The first few years of the engagement were, in retrospect,

akin to what Bonoma (1985) describes as the ’drift’ stage. Despite the absence of a formal research

question during this stage, it offered the researcher the opportunity to gather a deep understanding

of the context that was later to be more formally investigated. The second stage of the research,

namely the ’design’ stage (Bonoma, 1985), started in 2008 and continued until 2012. During this

period the major areas of research as identified during the drift stage were assessed, refined and

fleshed out. Our focus became to examine the processes and practices practitioners utilized to

implement a specific market segmentation project in ICT Co SA.

Rick, the manager of strategy development, was our primary access point and a major source of

information. He reports to the executive responsible for sales and marketing to small and medium-

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sized enterprises (Director of SME business). His responsibilities include strategic marketing

planning and the provision of marketing intelligence to his own section and those of the three other

executives in the SBU. Business segmentation development and implementation has been a

constant priority for the section since 2004. Rick has three direct reports, with the manager of

business intelligence being responsible for developing and updating business market segmentation.

Other managers in the organisation are responsible for additional aspects of the market

segmentation project. For example, the manager of special projects (Lou) is in control of integrating

market segmentation with the customer relationship management (CRM) system.

Figure 1 The ICT Co business sales organisation

Table II contains the interview schedule. We use pseudonyms and titles to protect the anonymity of

the respondents. Nine interviews were conducted during the initial round, followed by a further five

follow-up interviews. They were conducted in English or Afrikaans by the first author (and

translated into English) depending on the interviewee’s preference. The interviews were semi-

structured to ensure that certain theoretical themes were addressed, while allowing other topics to

be explored as they emerged. A conversational style was adopted, with interviews lasting between

Director: strategic accounts

Director: govern-ment accounts

Director: SME busi-ness

Director: complex solutions

Managing director: commercial

Manager: strategy development

Manager: business intelligence

Manager: special projects

Manager: market-ing strategy

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30 and 60 minutes. The interviews were structured around a simple checklist of issues that explored

(1) the market segmentation process and how it was approached, (2) marketing activities related to

the market segmentation process, (3) how the segmentation was received by organisational

members and whether resistance occurred, and (4) important relationships (formal and informal)

and how these were managed. While interviews were the primary data source, we also drew from

reports, observation, and informal conversations to add breadth and depth to our findings ensuring

data credibility and quality (Flint, Woodruff & Gardial, 2002). Following Mitchell (1983), we do

not claim that the specific context of ICT Co SA is generalizable to other populations, however

similar, but we do argue that our findings can be used to develop further theorising regarding

marketing performativity in general and market segmentation performativity in particular.

The interview data were analysed using ATLAS.ti software. We employed a process of “meaning

condensation” (Lee, 1999: p. 89) to extract the most important themes from the data. Analysis was

iterative, involving a constant to-ing and fro-ing among the interview transcripts, documentation

and notes taken during the segmentation process. As we held the assumption that market

segmentation is performative, an inductive process was used to hear the data speak. Since the

purpose of our analysis was both description and explanation, we progressed from description to

explanation as the underlying generative mechanisms (Easton, 2010) in ICT Co SA’s market

segmentation process became apparent. The segmentation narrative that appears in the next section

was developed as a result of this process.

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Table II Interview schedule

Person

interviewed

Role in organisation Number of interviews

Rick Manager of strategy development (see

Figure 1) and empirical focus of the

study

Two

Gavin Director of SME business (see Figure 1)

and Rick’s manager

One

Theresa Customer insight manager in the Group

Strategy division. Rick’s peer in another

organisation

One

(Interview translated from

Afrikaans)

Rachel Manager of business intelligence (see

Figure 1). Rick’s direct report with the

responsibility of communicating and

implementing segmentation in the

organisation.

Two

Lou Manager of special projects (see Figure

1). Rick’s direct report with the

responsibility of implementing CRM

and business intelligence systems in

support of strategy.

One

(Interview translated from

Afrikaans)

Eddie Regional sales manager and internal

client of market segmentation

Two

James Regional sales representative and

internal client of market segmentation

One

Joanne Regional sales representative and

internal client of market segmentation

One

Carl Product manager and internal client of

market segmentation

One

Mark Associate of the academic consultant

and academic consultant

One

(Interview translated from

Afrikaans)

Business market segmentation in ICT Co SA

The market segmentation process in ICT Co SA unfolded over four phases (Figure 2). Phase one

was introductory and involved actors working together, some for the first time, and laid the

foundations for the rest of the process. During phase two, the segmentation process was initiated

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through four distinct steps, described below, that closely resemble the approach of gathering data

for the purposes of generating segments, as advocated in the segmentation literature. During this

phase, however, problems emerged and the process began to falter. In phase three, as a

consequence of the segmentation process being revived by a project champion, it became more

widely adopted in the organisation. Phase four focuses on the more detailed aspects of the

implementation.

Phase One: Building the foundations for segmentation

The working relationship between the academic consultant (first author) and the organisation began

in 2004, when the director of SME business attended an executive education programme at the first

author’s business school. Their mutual interest in strategic marketing led to informal discussions,

culminating in a request to assist ICT Co SA with a project to estimate its market share across key

business sectors. The output of this project was a set of ‘market maps’ that explained market share

in terms of revenue and volume. Although this outcome was a long way from an extensive

segmentation exercise, it was contextually important because it shaped the relationship between the

academic consultant and the firm and established the legitimacy of the academic consultant. The

activity also established the value of empirical market research as a basis for decision making, and

paved the way for the subsequent market segmentation process.

From the market map to the segmentation model to [parent company segmentation model]

was a perfect track. It was really just a matter of folding the data into the segmentation

model. A key difference for me between the two was that one was almost an executive tool,

whereas the segmentation model is structured in a format that I felt we could actually drive

through the organisation because you could strip out elements and it would still make sense

to the end users within the organisation.

(Manager of strategy development)

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Figure 2 The ICT Co business segmentation process

Phase 1: Introductory phase

Phase 2: Initial segmentation

1. Management workshop 2. Qualitative research 3. Quantitative research 4. Strategy development

Phase 3: Segmentation revival

- Leveraging parent company regulations - Changing presentation format

- Positioning segmentation as business strategy

Phase 4: Implementation

- Simplification - Selling - Systems - Structure

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Phase Two: Developing needs-based business segments

During the second phase, discussions between the director of SME business and the first author

suggested a more nuanced study of business customer needs and segments was needed, reflecting

the organisation’s increasing focus on SMEs. A decision was made to conduct a detailed study to

identify and profile business market segments. A U.K.-based consultancy headed by a well-known

academic whose work was much admired by the director of SME business, was engaged to oversee

the business segmentation process. A series of steps were following during this second phase to

develop the segmentation. These steps mirror the approaches to developing segments that are often

described in the literature (See, for example, Dibb & Simkin, 2008; McDonald & Dunbar, 2004;

Weinstein, 2004).

Step 1: A two-day workshop held with business unit managers, with the purpose of developing a

deeper understanding of the possible business market segments and their needs.

Step 2: Qualitative research conducted through in-depth interviews with about 20 typical customers

representing potential segments. The purpose of this was to determine ICT needs, buying

behaviour and purchasing decision criteria. This qualitative research served as a key input

into the next phase, a quantitative survey.

Step 3: A quantitative survey undertaken covering several hundred respondents to obtain data

concerning their needs, buying behaviour and decision criteria. The outcome was a

quantitative profile of five different segments, which was later collapsed into four segments.

These segments were clearly differentiated according to their need for managing mobile

assets and their relative business complexity. The segments were supported by detailed

descriptions and data outlining the aspects differentiating the segment, such as their key

buying requirements, ICT purchasing decision-making processes, current product usage and

future behavior. Table III contains a brief description of each of the segments.

20

Table III Descriptions of needs-based segments

SEGMENT SEGMENT DESCRIPTION

Small statics (33% of

population)

In this segment the businesses are typically small and operating on a

single site. Businesses are relatively simple, and there is a low need for

mobile management of assets or ICT services in general. They do make

extensive use of fixed broadband services and Internet access.

Complex statics

SMMEs (23% of

population)

In this segment, businesses are typically medium to large in size and

more complex, but have a low need for mobility. However,

telecommunications and ICT is very important to them. Despite this,

they are generally not very progressive with regards to technology, and

seem to feel that they are constantly playing “catch-up”. They have a

relatively high need for international connectivity.

Simple mobiles (26%

of population)

Businesses in this segment displays a high need for relatively simple

ICT solutions such as staying in touch with mobile employees,

managing mobile assets, remote diagnostics, Internet access and e-mail.

They have a high need for managing mobile people and assets, but a

low need for more complex solutions and international connectivity.

This segment contains comparatively high users of satellite tracking,

dedicated data lines and mobile data services.

Complex

sophisticates (18% of

population)

These businesses are larger and have much more sophisticated ICT

needs. They may have several points of presence and may need to

manage a geographically dispersed network. They are especially

characterised by the need to expand the business and to be able to

communicate in a variety of ways - both fixed line and mobile. These

organisations often have very flat structures and see themselves as “fast-

moving”. They have a very high need for international connectivity.

Step 4: Following feedback to the business unit in presentation and report format and discussions

regarding segmentation in all the regions, potential strategic initiatives to target attractive

segments were identified and included in the final report. Quantification was at this stage

already identified as imperative to the management team of the business unit, as it

ostensibly provided a strong basis for identifying opportunities for business growth, and

played a more political role as a tool for negotiation.

Although the potential benefits that segmentation offers were understood and despite some positive

responses to the process in general and to the information that resulted from it, implementation

stalled after Step 4 was completed.

Phase Three: Reviving the segmentation process

This phase commenced with the appointment of a manager of strategy development (Rick) who had

previous experience in a large consultancy firm and who was ultimately the catalyst to inject new

21

life into the segmentation process. He achieved this in three ways: first, by leveraging his

relationship with the parent company to obtain access to the segmentation work that was done in

Europe; second, by presenting it in a highly visual and user-friendly presentation format; and last,

by emphasising the strategic role of market segmentation and the benefit that this could bring.

Initially, Rick had been appointed as a middle manager responsible for business process

development, but as his talents for networking, business analysis and strong presentation skills

became apparent, he was soon assigned responsibility for strategy development for the whole

business unit. As part of his personal development in this position, he was sent to the European

MNC headquarters, where he was exposed to its business segmentation practices. On his return, the

first author was engaged with the remit to merge the existing segmentation data with the European

segmentation scheme and to present the resulting segments in a highly visual and colourful format.

The basis for the European segmentation was a combination of size and vertical industry sectors

forming seven different segments. This approach contrasts greatly with the use of customer

characteristics, needs, decision-making and purchasing behaviour so often recommended by

segmentation theorists (e.g. Simkin, 2008; Wedel & Kamakura, 2002). For example, for small and

medium-sized businesses the two identified segments split the population into two segments: the

more sophisticated service businesses such as financial, ICT and business services, and the rest, for

example agriculture, manufacturing and the trade sector (wholesale and retail businesses).

In addition to leveraging the work that had already been done, using the same segmentation basis

provided a level of legitimacy and helped the subsidiary to ‘fit in’ with the corporate parent’s

practices:

Work that was done with consulting houses at the [parent company] level and they could

send it through to us. Specific channel strategies, if you’ve got a reference point, (a) we need

to align ourselves with our parent to begin with, but (b) they applied their minds to it. It

gives you the right building blocks... It’s absolutely a huge benefit for us.

(Manager of strategy development)

Whereas the initial segmentation structure was in the form of a written report, the medium for the

22

revised segmentation structure was a highly visual presentation, which quickly proved of value to

other managers and executives:

I think people immediately locked onto it. When we went to the SME workshop, there were

about five or six presenters and out of the six presenters four or five actually used the

presentation flyers that we actually developed on the segmentation study...

(Manager of business intelligence)

In addition to leveraging the intellectual assets of the parent company, Rick astutely positioned

segmentation as a means for the business unit to ‘own’ business strategy, as opposed to the firm’s

corporate strategy which is ‘owned’ by Group Strategy and the top management team:

Segmentation has three levels: You’ve got the market segmentation, business segmentation

and then the individual profiles to drive that in the organisation, but also to put those

platforms in place. So we see segmentation to be the cornerstone for the operational strategy

and ultimately the business strategy, and we wanted to own that.

(Manager of strategy development)

Phase Four: Implementing the segments

Phase four entailed the implementation of market segmentation processes within the organisation.

This involved both an internal ‘selling’ exercise and a process of embedding the scheme into the

firm’s systems and structures. As part of the selling exercise, a more modular presentation of the

segmentation data in an online interactive hyper book format was developed. The organisation’s

advertising agency was also engaged to simplify the presentation into an accessible brochure. This

was part of a drive by the Director of SME Business to make the segmentation simpler and more

user-friendly:

[We] decided to put it into [an online format], which is what I’m currently focusing on... It’s

got the segmentation study in electronic format, which is absolutely amazing. The first stage

of the segmentation study is that big block with the various segments. You can click on each

segment and it takes you to that actual chapter.

(Manager of business intelligence)

The linking of customers to specific market segments is a critical part of the segmentation process.

However, the firm’s information systems had not been developed with this specific segmentation

structure in mind. Therefore, as part of the process of linking customers to segments, there was a

need for salespeople and other customer contact staff to update customer data as part of their

everyday duties. In addition, there was a desire within ICT Co SA to use market segmentation

23

beyond its strategic purpose as a tactical and operational sales tool. Thus, some of the processes to

encourage its use could be viewed as coercive, even if the motive was to provide the users with

valuable information:

And I believe that its where we will unlock the most value from the segmentation, by

educating throughout the organisation, not just at the executive layers; the model that we’ve

created, give it to them in a palatable format that they can adopt and apply to their daily

lives, because it’s valuable to them, it gives them insight. Beyond that, we’re also forcing

them. So it’s a soft touch but there’s also a hard element to that. It will be embedded in all

the systems.

(Manager of strategy development)

Ultimately, the business unit was restructured in 2011 to broadly reflect the new segmentation

structure, and in 2012 was further updated with new enterprise population figures. These

developments suggest that despite a slow start and resistance from some executives, the

segmentation structure had gained a strong foothold in ICT Co SA.

Our findings suggest that in its early stages, the segmentation process was based on strong

theoretical principles and accepted ‘best practice’, following the widely accepted segmentation-

targeting-positioning conceptualization and using needs-based segmentation, customer decision-

making and purchasing behaviour as its basis. However, as other actors became involved the

process developed more opportunistically and intuitively, as individuals made sense of and coped

with their situational contexts. The process also displayed strong elements of trial-and-error type

experimentation. For example, at one point ICT Co SA conducted an extensive alternative

segmentation study based on attitudinal segmentation; but this was abandoned because the

implementation of the segments would have been difficult to achieve. While the segmentation

approach had its roots in theory and ‘best practice’, it ultimately turned out to be a much messier

process than anticipated. The final outcome was a fairly simple segmentation scheme based on

enterprise size and vertical sectors. Although not typical of what is regarded as ‘best practice’,

because of the materiality associated with the segmentation schema it was more readily accepted by

the organisation.

24

Discussion

Our focus is on how organisational actors accomplished a segmentation exercise through

performing, to greater or lesser degrees, a market segmentation process in practice. We assume that

theories, models, processes and approaches are seldom transferred to practice unaltered, as they

inevitably undergo some form of translation. We further assume that the use of marketing theories,

models or techniques is not neutral; that is, the use of a particular marketing process is likely to

contribute towards the construction of a social reality where that process is deemed to be useful and

accurate. In short, implementing market segmentation produces segments that are not pre-given but

created through segmentation acts. Once created, these segments become accepted as representing

social reality. Our interest lies in understanding how the market segmentation process and the

theoretical ideas that underpin it actively contributed to the accomplishment of market segmentation

in ICT Co SA.

Our findings allowed us to construct insight into the specific activities managers undertake (Skålén

& Hackley, 2011; Svensson, 2007) when they draw from theory to constitute their own practice.

We discern four sets of performative actions managers accomplish and consider their relationship to

segmentation theory. MacKenzie identified three types of performative relationship: generic,

effective and Austinain; and one relationship of counterperformativity. Our study identifies

instances of both effective and the rarely seen Austinian performativity. We speculate that in time it

is likely we would also observe counterperformativity. Our four sets of actions are linked to the

four phases presented in our findings section, but this association is not a neat coupling of each

phase to its correspondingly numbered action. Rather, the performative actions we identify tend to

occur in parallel rather than sequentially, the boundaries between them are blurred rather than rigid

and subject to periods of inactivity rather than constant. The four sets of actions we identify allow

for a structuring of analytic insights, they are: establishing legitimacy, theory embodiment,

25

contextualizing and maintaining the process. We structure the remainder of the discussion section

around these, beginning with establishing legitimacy.

Establishing legitimacy

When embarking on a large-scale change process, the concept and the actors that are driving and

leading it have to be seen as legitimate to the wider organisational audience for their ideas to

become established. The instances of performativity already referred to (Austin, 1975; MacKenzie,

2003, 2007), could only occur because the legitimacy of the actors involved and their ideas had

been assured. Legitimacy can be established in numerous ways. In ICT Co SA, the internal lead

actors (director of SME and first author) were deemed sufficiently legitimate for the process to

begin. Even so, external authority in the form of a U.K.-based management consultancy was felt to

be necessary to assure organisational actors that the process was legitimate. Legitimizing acts were

especially evident, but not limited to, the first phase outlined in the findings (building the

foundations for segmentation). Legitimacy can also emerge when material objects were seen to

‘act’ when the segments were implemented. When processes like market segmentation are inscribed

into material artifacts, documents (either electronic or paper) are produced, distributed and

consumed and become part of an official discourse. A segmentation discourse relies on texts to

sustain and advance it, thus enabling the process and its outcomes to become formalized within the

organisation. A discourse materialised in and through texts has been made to materially matter.

Legitimate practice is constituted through the interplay of conversation (talked into being) and text

(material artifacts are inscribed with the discourse). A formal discourse is also a performative

discourse as it constitutes that to which it refers, and also marginalizes other potential alternative

discourses. Legitimacy building does not end when the process has become established; it needs to

be continually refreshed as discourses can and do lose their performative powers.

Theory embodiment

26

The second set of actions occur when legitimacy of the actors and the theoretical approach has been

established resulting in a general acceptance of the need to embody the new theory or approach. We

use the term embody rather than enact or implement, because we wish to emphasize that

practitioners draw on their whole bodies when implementing a marketing process like market

segmentation. Marketers are not just mouths that speak and brains that think, but people that move

about, point, gesture, occupy and produce space and generally communicate non-verbally as well as

verbally. In ICT Co SA, the acts that embodied market segmentation were the point at which

practice most closely resembled its depiction in the literature and, as such, it was the closest we

came to an instance of Austinian performativity. Actions here are closely drawn from phase two,

during which the initial needs-based segmentation was conducted. Austinian performativity occurs

when organisational processes resemble how a theory or approach is depicted more and more. This

type of performativity is empirically rare, because theories nearly always undergo some form of

translation when they encounter the messy world of practice. This observation is more than a

simple truism. It denotes that when academics discuss concepts like market segmentation, we tend

to discuss them in their idealized forms, not in the way practitioners experience them. One of the

reasons for the growing tensions surrounding marketing research and practitioners’ experienced

realities could be that marketers’ everyday experiences are marginalized from our academic

discourses. The actions constituting theory embodiment can be characterized as being when actors

in ICT Co SA sought to integrate market segmentation into existing management processes and this

was done largely as prescribed in the literature. However, the gap between theory and practice was

significant and the next set of actions produced an increasing departure from how market

segmentation was depicted.

Contextualization

Towards the latter stages of the actions that saw theory embodied in practice, market segmentation

in ICT Co SA began to stall. As considerable investment had been made it was necessary to turn

27

this around. Attempts to implement segmentation in any Austinian sense, i.e. closely resembling

how it is depicted in the marketing literature, were abandoned, and a more pragmatic, context

relevant approach involving intuition and trial-and-error began. The role and importance of material

artifacts and texts were increasingly recognised. They were seen as not merely used, but ‘to act’ in

the sense that they made a difference to how practice unfolded. We see here instances of effective

performativity (MacKenzie, 2007), as use of a model or approach affects an organisation’s

processes and makes them different to an organisation that does not use that model or approach.

However, use of the approach does not result in practices that resemble the model more. We term

these actions ‘contextualization’ because it seems that effective performativity occurs when the

tensions between theory and practice are at their most strained. Actors recognise the value and

importance of the theoretical depiction of a process, but are confronted with the realities of their

working contexts, which are messy and full of contradictions and competing priorities. Reconciling

the two becomes increasingly difficult. ICT Co SA recognised the advantages of aligning its

segmentation with that of its European parent. Its move to employ visual methodologies to

communicate its segments represents an appreciation of the power of pictorial representation. These

and other moves witnessed a shift away from theoretical descriptions of segmentation, although

ICT Co SA still ‘did’ segmentation, albeit in a way that diverged from how it is described in the

literature.

Maintaining the process

While the strongest relationship between theory and practice was discerned when theory was

comprehensively embodied in the actions of practitioners, and acts of contextualization witnessed a

growing tension between theoretical depictions and pragmatic concerns; the final set of actions

centered more and more on practical coping. In ICT Co SA, maintaining the process focused on

integrating the new practices associated with market segmentation into existing discourses and

processes. Chiefly, this involved selling the results internally and ongoing system and structural

28

embedding. These are some of the practical implementation tasks associated with market

segmentation that have received little attention in academic work (Goller, et al., 2002; Quinn, et al.,

2007; Verhallen, Frambach & Prabhu, 1998) and which we need to understand better if theories and

approaches are to shape practice. We observed over time a gradual distancing of segmentation as

ICT Co SA was accomplishing it with how it is depicted in the literature. The label ‘market

segmentation’ was retained, as this gave the practices an authority and legitimacy they would not

have otherwise had, but what happened in practice resembled theoretical descriptions of market

segmentation less and less. We speculate that with the passage of time, market segmentation in ICT

Co SA could become what MacKenzie terms a counterperformative, meaning that although the

activity bears the name, the actions resemble theoretical descriptions less and less. While these acts

overlap with the implementation of the segments (phase four in our findings), they go beyond mere

implementation, as they also include the constant re-establishment of legitimacy and adjustments to

the segmentation as it is contextualized on an ongoing basis.

The concept of performativity allows us to discern a more nuanced relationship between marketing

processes, like market segmentation, and their manifestation in practice. To simply say that a

technique is implemented tells us little about how it makes a difference to those who have adopted

it. In turn, this gives us little useful insight with which to develop and refine our theories. All

marketing theories, models and approaches are constitutive in that they construct as well as describe

and explain. They themselves ‘use’ as much as they are ‘used’. Sensitivity towards the performative

alerts us to the constituting effects of theory and offers us a language for discerning its uneven

affects.

Conclusion

This paper addresses the question: ‘How does a market segmentation process emerge in an

organisation and what causes it to materialise in this way?’ To achieve this, we have utilised a

29

performativity lens as this provides researchers with the opportunity to offer insights into how

marketing processes are performed in practice. An analytical focus on the performative actions of

actors increases knowledge of marketing as practice, and holds the potential of stimulating more

relevant advice for practitioners as their everyday challenges, concerns and contradictions are

integrated into research accounts. Our first contribution lies in extending knowledge concerning

how market segments are constituted in organisations. Our fine-grained study demonstrates the

pragmatic obstacles managers have to overcome if they are to successfully adopt and adapt

concepts, models or approaches drawn from academic theory. The second contribution relates to the

insights a performativity perspective of longitudinal practice can provide. Performativity theory

encourages a relational framing of managerial activity such that single events or experiences are

made sense of in a conceptual whole. Performativity theory assumes that organisation unfolds in a

conversation and text dialectic, which recognises that non-human texts can ‘act’ and influence how

marketing practice is accomplished. The insights emerging from our study allow us to outline four

sets of actions involving establishing legitimacy, theory embodiment, contextualisation and

maintaining the process as exemplifying processes of marketing theory implementation.

30

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