ABSTRACT

There is a large body of literature on market segmentation but little of it deals with segmentation for social products, even though the theory applies to a service or a concept as much as a tangible product. The segmentation technique can be illustrated by an ideational product such as health care. Market segmentation refers to dividing the total market into segments consisting of customers with homogeneous needs/wants and resources. Once these segments are identified, it is up to the supplier to decide whether to cater to one segment or all of them. The market is becoming more and more segmented in the health care industry. This is happening because patient needs/wants are not homogeneous, and neither are their time and money resources. Three types of patient characteristics are useful for segmenting the health care market: patient demographics, patient psychographics, and patient frequency of health care utilization.