Initially it was produced only in black. The business historian, Richard S. Tedlowidentifies four stages in the evolution of market segmentation: The economy was characterised by small regional suppliers who sold goods on a local or regional basis Unification or mass marketing s—s:
Tedlowidentifies four stages in the evolution of market segmentation: The economy was characterised by small regional suppliers who sold goods on a local or regional basis Unification or Mass Marketing s—s: As transportation systems improved, the economy became unified.
Standardised, branded goods were distributed at a national level. As market size increased, manufacturers were able to produce different models pitched at different quality points to meet the needs of various demographic and psychographic market segments.
This is the era of market differentiation based on demographic, socio-economic and lifestyle factors. Technological advancements, especially in the area of digital communications, A priori segmentation marketers to communicate with individual consumers or very small groups. This is sometimes known as one-to-one marketing.
The practice of market segmentation emerged well before marketers thought about it at a theoretical level. Retailers, operating outside the major metropolitan cities, could not afford to serve one type of clientele exclusively, yet retailers needed to find ways to separate the wealthier clientele from the "riff raff".
One simple technique was to have a window opening A priori segmentation onto the street from which customers could be served.
This allowed the sale of goods to the common people, without encouraging them to come inside. Another solution, that came into vogue from the late sixteenth century, was to invite favored customers into a back-room of the store, where goods were permanently on display.
Samuel Pepys, for example, writing indescribes being invited to the home of a retailer to view a wooden jack.
A study of the German book trade found examples of both product differentiation and market segmentation in the s.
Contemporary market segmentation emerged in the first decades of the twentieth century as marketers responded to two pressing issues. Demographic and purchasing data were available for groups but rarely for individuals and secondly, advertising and distribution channels were available for groups, but rarely for single consumers.
Thus, segmentation was essentially a brand-driven process. Smith is generally credited with being the first to introduce the concept of market segmentation into the marketing literature in with the publication of his article, "Product Differentiation and Market Segmentation as Alternative Marketing Strategies.
However, with the advent of digital communications and mass data storage, it has been possible for marketers to conceive of segmenting at the level of the individual consumer. Extensive data is now available to support segmentation at very narrow groups or even for the single customer, allowing marketers to devise a customised offer with an individual price which can be disseminated via real-time communications.
But in spite of its limitations, market segmentation remains one of the enduring concepts in marketing and continues to be widely used in practice. One American study, for example, suggested that almost 60 percent of senior executives had used market segmentation in the past two years. Depending on company philosophy, resources, product type or market characteristics, a business may develop an undifferentiated approach or differentiated approach.
In an undifferentiated approach, the marketer ignores segmentation and develops a product that meets the needs of the largest number of buyers.
In consumer marketing, it is difficult to find examples of undifferentiated approaches. Even goods such as salt and sugarwhich were once treated as commodities, are now highly differentiated. Consumers can purchase a variety of salt products; cooking salt, table salt, sea salt, rock salt, kosher salt, mineral salt, herbal or vegetable salts, iodised salt, salt substitutes and many more.
Sugar also comes in many different types - cane sugar, beet sugar, raw sugar, white refined sugar, brown sugar, caster sugar, sugar lumps, icing sugar also known as milled sugarsugar syrup, invert sugar and a plethora of sugar substitutes including smart sugar which is essentially a blend of pure sugar and a sugar substitute.
Each of these product types is designed to meet the needs of specific market segments. Invert sugar and sugar syrups, for example, are marketed to food manufacturers where they are used in the production of conserves, chocolate, and baked goods. Sugars marketed to consumers appeal to different usage segments — refined sugar is primarily for use on the table, while caster sugar and icing sugar are primarily designed for use in home-baked goods.
Different types of sugar: White refined, unrefined, brown, unprocessed cane Main Strategic Approaches to Segmentation  Number of segments.Market segmentation which is not empirically based. It involves segmenting markets on the basis of assumptions, custom, or hunches.
Market segmentation is the activity of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics.
The terms a priori and a posteriori are primarily used as adjectives to modify the noun "knowledge" (for example, "a priori knowledge"). However, " a priori " is sometimes used to . A-priori segmentation A priori research occurs when "a theoretical framework is developed before the research is conducted".
 In other words, the marketer has an idea about whether to segment the market geographically, demographically, psychographically or behaviourally before . Market segmentation allows businesses to satisfy the diversity in a resource-effective manner and is held up as the panacea of modern marketing (Dibb, ).
Marketing segmentation is more and more vital for business in the modern time. Usage segmentation helps to drill down more deeply than a priori because it indicates which priori group is the heaviest user of your product.
Attitudinal (Cluster analysis) Using cluster analysis to create customer psychological profiles is difficult because it is limited by the input data used.