Market segmentation in Russian subsidiaries of FMCG MNEs : Practitioner and academic perspectives

Purpose – This exploratory study attempts to cast some light on the state of market segmentation and the issues faced by practitioners amongst a sample of Russian subsidiaries of Western multinational enterprises (MNEs) operating in fast‐moving consumer goods markets. Design/methodology/approach – Qualitative research in the form of depth interviews with seven respondents was undertaken at five MNEs (covering 11 brands across 13 product categories) and one Russian‐owned company which had recently recruited its senior management from Coca‐Cola in Moscow. MNEs were chosen because it was believed they would have the resources to acquire such expertise and knowledge as was necessary to develop a segmentation structure. Findings – The companies researched had indicated that, in most cases, they had not been fully satisfied with their segmentations and so were engaged in continual attempts to improve their segmentations. For the majority, need‐state segmentation was currently seen as a considerable step forward but other options were being investigated. The study shows that factors influencing the search for the better segmentation need to include the nature of the product but also the stage of development of the product category, itself resulting, in most cases, from the pattern of market development in transition economies. Research limitations/implications – The research uses only a limited number of respondents but there was a large degree of commonality in respect of the key broad issues. Practical implications – The study has implications for the factors to be taken into account when designing segmentation approaches, including the nature and stage of development of the product category and the purpose of the segmentation. Originality/value – As far as is known, this is the first study which addresses segmentation issues amongst Russian subsidiaries of Western FMCG multi nationals.