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Aluno: Luiz Valério de Paula Trindade Data: 05 de maio de 2011

Disciplina: Administração Estratégica de Marketing Docente: Profº Drº Evandro Lopes

Programa: Doutorado em Administração Período Letivo: 1º/2011

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The focus of this 1987 article is directed towards the discussion of what the authors consider

to be a confusion regarding the definition of market segmentation and product differentiation found

on a number of marketing textbooks and shed some lights on this subject matter. In order to back up

their claims, the authors have undergone a thoroughly research on a group of 16 marketing

textbooks published between 1978 and 1985.

According to them, by that time, there was a continuous misunderstanding around the

definition and usage of both terms on the majority of marketing textbooks. From the group of 16

textbooks they have assessed they managed to classify them into two categories: a) five of them

described product differentiation as an alternative to market segmentation; b) on the other hand, the

remaining eleven, have described it as a complement or means to implement market segmentation.

The development of the article goes through a historical perspective as a mean to understand

the main theories that originated or were behind both definitions and also to investigate a possible

turning point along the way that could have caused the misunderstanding. For this purpose, they

have gone back to early 20th

century and reviewed a pioneer work by Shaw (1912), followed by

Smith (1956; 1978), Chamberlin (1965), Rosen (1974), Porter (1976), Samuelson (1976), Mahajan

& Jain (1978) and Lancaster (1979).

1 by Peter R. Dickson and James L. Ginter. Journal of Marketing. V. 51 April 1987, pp. 1-10

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This literature review have helped them develop an interesting summary chart were it is

possible to spot the definition of five important constructs (market segmentation, product

differentiation, product differentiation strategy, demand function modification and segment

development strategy). What also calls our attention from this literature review is an explanation of

demand of a certain product/service as a function of its price and features or characteristics, be it

tangible or intangible. According to this equation, an organization can move closer towards the

desired market segment as it succeeds in managing its products attributes/features and they match

its target customer needs and expectations. Based on this equation they expand their reasoning right

on the article’s following session that address the issue of Strategic Options and go on to explain the

characteristics and dynamics regarding three concepts: 1) Product Differentiation; 2) Segment-

Based Differentiation; 3) Demand Modification Strategy.

The purpose of this detailed description of the definition of the three concepts is in fact to

introduce their main supporting axis to demonstrate that market segmentation and product

differentiation are not alike and that there should not be any more misunderstanding.

They end up their study clearly stating that strong evidences indicate that product

differentiation and market segmentation do not represent, what is believed by some, as alternative

management strategies. So that, their final advice is that “It seems important for both managers and

academics to have a common, accepted understanding of the theoretical and applied meaning of

these concepts.”