Market segmentation strategies for future telecommunications services

The recent popularity of market segmentation reflects the growing importance of considering a broader set of factors including consumers' psychology and lifestyles. It has been increasingly regarded as a better alternative for estimating the long-term potential demand, especially for new technology products and services. In this study, we perform a segmentation of the future telecommunication service market using consumers' acceptance toward technology and their general value and lifestyles, as segmentation variables, to reveal characteristics that distinguish different segments. A survey was conducted in June 2006 on 800 consumers aged 15 to 69, residing in Seoul and five other major South Korean cities, through one-on-one interviews. Using the data collected through this survey, we performed a two-phase segmentation analysis. The samples were divided into two sub-groups according to their level of acceptance of new technology. These two subgroups were further divided each into 5 smaller sub-groups through two rounds of segmentation. The ten sub-groups were then analyzed in their detailed characteristics including general demographic characteristics, usage patterns in existing telecom services such as mobile service, broadband internet and the status of ownership of a computing or information device and the desire to purchase one. Through these steps, we were able to show that each of these 10 subgroups responded to telecom services as independent markets. Further, as we grade the willingness to use of future telecom services of each segment, we suggest a main target segment of each future telecom services.