Profitability Analysis by Market Segments

Abstract

The contribution approach to cost accounting serves to relate products, channels, and/or other marketing components to the profitability of market segments. Using the profit criterion, the marketing manager can plan and control his decisions for the component being analyzed and make collateral adjustments in other elements of the marketing mix.

Customer segments as moving targets: Integrating customer value dynamism into segment instability logic

“…Segmentation theory stipulates that customers' needs, preferences, or desired value dimensions are heterogeneous, (i.e., they vary greatly) and this diversity can be captured using variables that discriminate among these different needs (Beik & Buzby, 1973;Day, Shocker, & Srivastava, 1979;Freytag & Clarke, 2001;Green & Krieger, 1991;Smith, 1956). Firms capitalize on need heterogeneity by identifying meaningful clusters of customers that have relatively homogeneous sets of needs.…”

Using a strategy-aligned fuzzy competitive analysis approach for market segment evaluation and selection

“…Even general studies of market segmentation have paid little or no attention to the evaluation and selection stages (Beane & Ennis, 1987;Weinstein, 1987;Wind, 1978). Authors generally limit themselves to analyzing how to evaluate segment stability (Bettman, 1971;Calentone & Sawyer, 1978;Lehmann, Moore, & Elrod, 1982;MacLachlan & Johansson, 1981), congruence (Green, 1977), internal homogeneity and profitability (Eckrich, 1984;Van Auken & Lonial, 1984;Beik & Buzby, 1973), to mention only the most relevant.…”

Customer accounting and customer profitability analysis for the order handling industry—A managerial accounting approach

“…are presenting case studies (Cooper & Kaplan, 1991;Hallowell, 1996;Noone & Griffin, 1999;Storbacka, 1995; van Raaij, Vernooij, & van Triest, 2003). Only a few contributions have dealt with customer-and market-oriented approaches that can be implemented and used as a natural part of the system of managerial accounting for a business (Beik & Buzby, 1973;Cooper & Kaplan, 1991;Dunne & Wolk, 1977;Hulbert & Toy, 1977;Kirpalani & Shapiro, 1973;Marple, 1967;Robinson, 1990). However, most of these publications are only outlining a market-oriented accounting framework and most of them are based on a contribution-method approach.…”