Segmentation based product design using preferred features

Purpose – The purpose of this paper is to present a systematic methodology for segmenting customers based on the preferred product features, its cost and worth, so as to facilitate the designer to develop a product that will simultaneously minimize product cost and maximize customer satisfaction. Design/methodology/approach – Post hoc – non-overlapping – non-hierarchical approach has been used for segmentation based on preferred product features by the customers. Allocation of product features to a particular segment is carried out by considering feature cost and customer worth for that feature. Automobile car has been selected as an example to demonstrate the methodology, where features data were collected from dealers and customer worth data were obtained by random generation method. Findings – Methodology facilitates creation of n number of homogeneous segments from a heterogeneous customer group based on the cost and worth of product features. Total product cost decreases though product variety increased due to segmentation. Originality/value – The proposed approach will help designers in segmenting (grouping) heterogeneous customers based on the preferred product features so that a most compatible (matching) product configuration for each segment, especially during product consolidation stage (beginning of the maturity phase of product lifecycle) can be developed to achieve maximum customer satisfaction.