ABSTRACT
Segmentation matters, especially when firms face the challenge of intense competition and eroding profitability brought on by declining prices. This chapter introduces some of the challenges pricing professionals face related to conducting customer needs-based segmentation and how to overcome them. Three important objectives addressed in the chapter help to understand why segmentation should matter a lot for pricing professionals. The chapter helps the reader to recognize the importance of segmentation and how to offer value through optimized solution offerings for customer segments. It also helps the reader to learn the strategic and practical activities and implications for needs-based segmentation. The chapter then helps the reader to understand how to implement segmentation best practices into the organization so that a segmentation strategy realizes greater profitability. Profitability is dependent on the quality of segmentation, sales strategy and how well one's sales force adheres to the policies given to them.
