Market Segmentation

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This paper presents some significant empirical findings about generational cohorts and their shopping behavior marketing has long relied on the use of market segmentation. While birth age has been a useful way to create groups, it describes segments but does not help to understand segment motivations. However, environmental events experienced during one's coming of age create values that remain relatively unchanged throughout one's life. Such values provide a common bond for those in that age group, or generational cohort. Segmenting by 'coming of age' age provides a richer segmentation approach than birth age. This study compares two significant cohorts: Baby Boomers and Generation Y, with respect to their shopping behavior and purchase involvement for food, clothing and automobiles. For the three types of products, Baby Boomers value the retail experience and in-store service higher than Generation Y. For Baby Boomers, the purchase process starts with a retailer the consumer trusts, who gives advice for choosing the right product, while for Generation Y, the purchase process starts with choosing a product. This study presents implications for retail strategies that have an appeal to different generational cohorts and considers how retailers should deal with building customer relationships.

This report looks at the service quality and service efficiency delivered at the restaurant chain of McDonald’s. McDonald’s was first opened in USA over 50 years ago and the first McDonald’s in UK was opened at Woolwich in 1974 (Crosby, 1979). Today, McDonald has opened over 1000 branches in UK. This report looks at the existing service structure at McDonalds and provides certain recommendations in the field of SERVQUAL and brand strategy that the company might incorporate to improve their service efficiency. This report takes into account the service characteristics such as intangibility, heterogeneity that are relevant to the fast-food chain restaurants such as McDonald’s. Further, this report also studies the service blueprint and servicescape that has been adopted at various outlets of the company.
From the findings of this report it can be suggested that there is scope for improvement of McDonald’s stores in their design layout for faster delivery of food and better service delivery to consumers. Branding strategies of the company such as co-branding and individual branding can be adopted to improve the perception of the service quality amongst consumers. This report proves that SERVQUAL can be utilized to understand the gaps creates in service delivery and consumer perception (Carman, 1990). This report helps in understanding how McDonald’s can improve their service qualities to improve customer perception (Bolton and Drew, 1991).

Dalam suatu program pemasaran, tentunya suatu perusahaan akan menetapkan kepada siapa suatu produk atau jasa dipasarkan (Targeting). Selain itu, pembagian pasar sebagai suatu strategi digunakan oleh perusahaan untuk membuat suatu keputusan kepada siapa konsumen yang berpotensi sebagai mitra supaya produk yang dipasarkan tepat sasaran sesuai pembagian kelas masyarakatnya (Segmentation). Selain itu, untuk memutuskan siapa mitra perusahaan suapaya tepat sasaran, maka diperlukan suatu analisis dari setiap pembagian setiap pembagian konsumen tersebut berdasarkan daya beli, usia, pekerjaan, gaya hidup dan tempat tinggal. Adapun untuk memenangkan hati konsumen akan produk yang ditawarkan maka suatu perusahaan dapat menciptakan produk atau jasa dengan brand tersendiri (Positioning). Di dalam perusahaan jasa konstruksi dan properti yang dibahas, PT Adhi Karya (Persero) Tbk telah menerapkan ketiga aspek tersebut.

Many advanced data services are driving up wireless technology, which is further boosted by growth in advanced market segments. The wireless industry is evolving from a Web of independent networks into a single integrated network with multiple standards; the expectation is that WI-FI, WI-MAX and 3G will coexist to enable a host of exerting new applications and business models. This paper focuses on concepts of WI-MAX technology, which employs microwave for the transfer of data wirelessly, and it also presents its comparison with WI-FI, and 3G technologies. WI-MAX is delivering broadband wireless access to the masses and represents alternative to digital subscriber lines (DSL) and cable broadband access. WI-MAX is based on IEEE 802.16 standard and is scalable. It stands for wireless (WI) microwave access (MAX). WI-MAX will provide anywhere, anytime connectivity. Features of WI-MAX are OFDM i.e. orthogonal frequency division multiplexing, sub channelization, directional antennas and adaptive modulation, which make WI-MAX as the technology of today. The Benefit of WI-MAX technology is that the signals can be run very close to each other on wireless channels. Super narrow lanes can put a lot of traffic over them without disturbance. Many technologies currently available can only provide line of sight (LOS) coverage; the technology behind WI-MAX has been optimized to provide excelled non-line of sight (NLOS) coverage.

The Banking and Financial Environment in Colombia has witnessed so many regulatory changes and competitive dynamics. This has made segmentation practices an imperative determinant in their service offering and development to its complex customers. Approach: This study assessed the use and impact of market segmentation patterns and practices on the performance of selected banks in
Colombia, post consolidation period of 2012 to date. The methods applied were both primary and secondary while the design was mainly exploratory, relating basic market segmentation variables like market share, geographical location and pricing to bank performance. Statistical test using Herfindal Hirchman Index (HHI) was designed to test for market concentration against bank’s performance.
Objective: The idea behind this research was to assist managers, business students, and banking workers to understand the concept and impacts of marketing segmentation patterns and practices on banks performance. Results: Findings from the study indicate that, segmentation practices have immensely impacted on the performance of the selected banks in Colombia. The study exposed that the banks have used segmentation practices to lower their overall operation unit cost, expand their market shares, retain their customers, better their communications, increase profitability and focus on their company. They are well positioned in capital strength and they are the best capitalized banks in Colombia, thanks to their segmentation strategy called data-informed strategy. Conclusion: The study however concluded that there is a threshold point (37.2%) in which any further commitment of funds
into market segmentation practice can lead to negative result. Recommendation: It was recommended that less dominated banks can adopt acceptable corporate image, simple and flexible account opening formalities, just-in-time service delivery, employee-customer management, and effective and efficient use of referrals to win customer loyalty which tend to retain old customers and win new customers as well.

Considering the importance of festival market segmentation as valuable marketing tool for promotion and understanding segment characteristics based on motivations, this study attempted to segment festival market using a cluster analysis based on delineated motivation factors. This study also explored any potential importance of motivation clusters and visitor types as factors of influencing their overall satisfaction based on main and interaction effects.

This paper examines the expansion choice between dhierarchicalT and dmarketT modes of development decision of international hotel companies. It develops a theoretical framework, combining both transaction cost economics (TCE) and agency theory (AT), to identify the country-and firm-specific factors that influence the choice among franchising, management contracts, and company ownership. The robustness of framework is supported by the empirical results using cross-sectional data of new development for international hotels. It suggests that the most influential factor on the development decision is the degree of proprietary content and idiosyncratic knowledge embedded in the service provided. The higher the market segment of operation, the higher the specialised skills and managerial expertise required for hotels to operate according to standards; therefore, the more likely a hierarchical mode will be used for their development.

The globalization of the marketplace and how this process is shaping the cultural characteristics of people around the world is arguably the most critical issue facing international marketing managers today. Powerful forces such as capitalism, global transport, communications, marketing and advertising, and transnational cosmopolitanism are interacting to dissolve the boundaries across national cultures and economies and in the eyes of some, accelerating the emergence of a homogeneous global consumer culture. The conventional method of using countries as the cultural unit of analysis or as a basis for market segmentation, is increasingly ill-advised, given that most of the world's countries are already multicultural and growing ever more so, and even within relatively homogeneous nations, individuals vary substantially in the extent to which they identify with, adhere to, and practice cultural norms. Many researchers argue that increasing globalization is reducing the homogeneity of consumer behaviors within countries, while increasing communalities across countries. Despite the importance of and widespread sociological discourse on this topic, (1) a scarcity of studies exists that have simultaneously considered both global and local cultural influences on consumer behavior, and (2) a scale for measuring how individuals acquire and become a part of this emerging global consumer culture is lacking. This article focuses on the development and validation of a multidimensional scale for the measurement of acculturation to global consumer culture, and is part of a larger international study examining the complex interaction and contextual nature of local and global cultural influences on consumer behavior. The article concludes with a proposed research paradigm intended to model such phenomena.

Tourism as a rural growth tool has to adapt to current market mechanisms, which are becoming extremely competitive and which are dominated by communication and promotion strategies and techniques. We need to know the causative factors and influences by which tourists in rural areas are motivated to become included in various market segments. The primary purpose of this study is to segment and profile the motivations of tourists, so as to enable a better understanding of rural tourism in Korea. A self-administered survey in four languages was collected from 252 tourists in the study area. A factor-clustering method identified four distinct segments: family togetherness seeker, passive tourist, want-it-all seeker, and learning and excitement seeker.

Kong, which is arguably a city destination that offers unique and diverse gastronomy. The results of the study provide evidence suggesting that motivation to travel for gastronomy reasons is a valid construct. Also, the results of the data analysis reveal that gastronomy plays a major role in the way tourists experience the destination, and indicate that some travelers would return to the same destination to savor its unique gastronomy. Implications for practitioners are also discussed.

This paper proposes a model to segment the cultural tourism market according to two dimensions: (i) the importance of cultural motives in the decision to visit a destination and (ii) depth of experience. The model is tested empirically using Hong Kong as a case study. The test identified five discrete cultural tourism market segments that exhibited substantially different behaviour. Copyright © 2002 John Wiley & Sons, Ltd.

Purpose -The purpose of this paper is to identify distinct market segments based on several environmental variables. Given the complexity and the range of variables that may determine the characterisation of these groups, as was made evident in the literature review, it was decided to focus this research mainly on analysing the environmental and demographic criteria. Design/methodology/approach -The data were collected through a survey of Portuguese consumers, aged over 18. The model of data collection was a survey conducted by self-administered questionnaire. A total of 887 were considered valid (the final sample). The questionnaire is composed of two sections. In the first part, data are collected about the demographic characteristics of respondents. The second part examines the environmental dimension (concern, affect, knowledge, environmentally friendly behaviours, information search, activism, green products buying behaviour, sensitivity to price, waste separation/recycling, perceived efficiency, scepticism, etc.). After collection, the data were statistically analysed and interpreted using the statistical software Statistical Package for Social Sciences 15.0. The data obtained were submitted to a multivariate statistical analysis, which included the following sequence of statistical treatment: factor analysis, cluster analysis and discriminant analysis. After this, a characterisation was made of the segments found.

This paper introduced three representative market segmentation methodologies for hotel guest room customers. In scenario l, segmentation by the industry data was employed as the first trial of academic research in the hospitality industry. Scenario 2 is benefit segmentation for respective customer segment as a result of scenario 1. There might be the need for an intermediate step between the two methods, however, in the case of a large enough sample. Therefore, a brief outline of Chi-Square Automatic Interaction (CHAID) was introduced in scenario 3. The authors believe that these sequential methodologies are the most appropriate procedures for segmenting hotel customers. r

Since from the conception, there have been way too many impediments towards the success of Tata Motors dream project – Nano. It seems evident that Tatas have had problems with the entire marketing mix for Nano. There were initial safety issues with the product; they couldn’t hold on to their original pricing promise due to rising costs; there was a tough time with the distribution due to serious mismatch between demand and supply; and there wasn’t a proper promotional campaign to begin with. This explorative case study looks beyond the mistakes and attempts to throw light on the consumer psychology regarding Nano’s initial low market acceptance; which seemed to be quite different from what the company and industry had speculated in the beginning. While making qualitative assessment of the perception, attitudes and behavior of the consumers, the case study also explores the continuous hurdles that Tata Motors had gone through and the others that it still tries to overcome to ensure “Nano – the people’s car”, gets  it’s truly deserving position in the market.

Purpose -This research aims to investigate differences between cohorts and perceptions of luxury goods and services. Design/methodology/approach -A survey asked participants to rate goods to determine their perceptions of luxury. Participants also provided information concerning elasticity and motivations for purchasing goods and services. A total of 347 participants in three age groups completed the questionnaire.

This article develops a 'social identity' perspective to the study of consumption. It builds on Richard Jenkins' distinction between internal and external definitions of collective identity and explores the interplay of these definitions in the realm of consumption. Evidence is collected from interviews with marketing professionals who specialize in the African-American market segment to show that this theoretical approach complements and improves on existing approaches. Marketing professionals' interpretations of the black consumer's distinctiveness are used to map the twin processes of internal and external definitions of collective identity for African-Americans. The interviews suggest that marketing professionals (1) actively shape the meanings of the category of 'the black consumer' for the public at large; (2) promote powerful normative models of collective identity that equate social membership with conspicuous consumption; (3) believe that African-Americans use consumption to defy racism and share collective identities most valued in American society (e.g. middle-class membership); and (4) simultaneously enact a positive vision of their cultural distinctiveness.

This paper has been prepared in order to present an evaluation of the international business strategies of Ready-made garments industries. Ready-made garments industries are the greatest value creation sector for one country. In Bangladesh, RMG (Ready-made Garments) sector is generating a huge amount of money. Today RMG industry is the most contributing sector in the amount of export that Bangladesh do. In recent years percentage of RMG in total exports rising from 75% to 80%.  In this report we talked about the global RMG industries and the international policies which they are using to conduct the business. Moreover, we talked about the domestic market, growth and size, exported or imported raw materials, valuable skills and human resources and the value chain system. In order to get a clear view we have used Porter`s Diamond theory model and tried to relate with those factors. In addition we have talked about different segment of this sector and others necessary things. In conclusion, most of the information of this report was collected from secondary sources. The sources include data from websites, article, theoretical knowledge and internet search.

Purpose -Whilst there are a plethora of theoretical ideas regarding a segmented approach to supply chain strategy, there is paucity of empirical data. This paper aims to present the results of a field-based case study in a fast moving consumer goods company (FMCGCo) that sought to identify the most relevant basis for supply chain segmentation. Design/methodology/approach -Research carried out on a single instrumental case, FMCGCo. A four-stage research design was employed to develop and test an approach to developing a segmented supply chain strategy for FMCGCo supply chain Western Europe. Findings -The study identified demand profiling at an item level (using volume and variability classifiers) as the primary driver of supply chain strategy. It also developed a novel profiling tool. This not only segmented demand but identified through the introduction of the concept of filters a method for turning the results of the demand profiling analysis into a segmented supply chain strategy.

Kong, which is arguably a city destination that offers unique and diverse gastronomy. The results of the study provide evidence suggesting that motivation to travel for gastronomy reasons is a valid construct. Also, the results of the data analysis reveal that gastronomy plays a major role in the way tourists experience the destination, and indicate that some travelers would return to the same destination to savor its unique gastronomy. Implications for practitioners are also discussed.

The globalization of the marketplace and how this process is shaping the cultural characteristics of people around the world is arguably the most critical issue facing international marketing managers today. Powerful forces such as capitalism, global transport, communications, marketing and advertising, and transnational cosmopolitanism are interacting to dissolve the boundaries across national cultures and economies and in the eyes of some, accelerating the emergence of a homogeneous global consumer culture. The conventional method of using countries as the cultural unit of analysis or as a basis for market segmentation, is increasingly ill-advised, given that most of the world's countries are already multicultural and growing ever more so, and even within relatively homogeneous nations, individuals vary substantially in the extent to which they identify with, adhere to, and practice cultural norms. Many researchers argue that increasing globalization is reducing the homogeneity of consumer behaviors within countries, while increasing communalities across countries. Despite the importance of and widespread sociological discourse on this topic, (1) a scarcity of studies exists that have simultaneously considered both global and local cultural influences on consumer behavior, and (2) a scale for measuring how individuals acquire and become a part of this emerging global consumer culture is lacking. This article focuses on the development and validation of a multidimensional scale for the measurement of acculturation to global consumer culture, and is part of a larger international study examining the complex interaction and contextual nature of local and global cultural influences on consumer behavior. The article concludes with a proposed research paradigm intended to model such phenomena.

Convergence in the realm of media, consumer electronics, computer technologies, and telecommunications has contributed to societal changes in terms of individual expectations and behavior leading to the re-appraisal of traditional market segments. Key innovations like the internet create a global platform that provides for new means in product and services configuration. This expands opportunities and threats in the business environment contributing to increased competition in a dynamic environment where traditional boundaries are shifting. In a world of converging technologies, increasing marketplace dynamics and rapid technological advances, new upcoming "disruptive technologies" such as Voice-over-IP (VoIP) pose threats to traditional telecommunications companies. Business leaders in order to succeed need to be "thinking outside the box". We introduce the concept of a business model as a tool in crafting strategy for the purpose of achieving sustainable innovation in the face of the reshaping of the industry and the market. We apply this model to the VoIP market and in particular the Skype technology and service. The significance of this contribution is that it highlights the importance of developing an innovative business model to take advantage of disruptive technologies. Our analysis of the dimensions of innovations shows that the more dimensions the greater the impact. ICT convergence is leading to a paradigm shift with innovation effects that are both effective and disruptive. Thus, leading to equally disruptive business models reshaping innovation strategy.

Market segmentation is one of the marketing concepts that are relatively long applied in business practice. Saturation of the market and consumer heterogeneity caused that segmentation, despite some criticism, continues to be an important marketing tool for the operations of a company. One of the key issues is the selection of criteria for segmentation. The polemic is made mainly about the usefulness of traditional variables such as geographic and demographic variables. The ease of implementation and understanding are their advantages, but lack of connection with actual consumer behaviour and thinking are their key disadvantages. This paper explores the possibilities of applying different geographic and demographic variables in tourist services. Conclusions that were obtained indicate that there are statistically significant differences in the efficacy of some traditional segmentation variables but that for the precise definition of the segments it is necessary to combine them with some of the behavioural, psychographic, or other types of post-hoc obtained variables.

Research regarding the use of social media among travelers has mainly focused on its impact on travelers' travel planning process and there is consensus that travel decisions are highly influenced by social media. Yet, little attention has been paid to the differences among travelers regarding their use of social media for travel purposes. Based on the use of travel social media, cluster analysis was employed to identify different segments among travelers. Furthermore, the study profiles the clusters based on demographic and other travel related characteristics. The findings of this study are important to online marketers to better understand traveler's use of social media and their characteristics, in order to adapt online marketing strategies according to the profile of each segment.

Businesses may not be in a position to satisfy all of their customers, every time. It may prove difficult to meet the exact requirements of each individual customer. People do not have identical preferences, so rarely does one product completely satisfy everyone. Many companies may usually adopt a strategy that is known as target marketing. This strategy involves dividing the market into segments and developing products or services to these segments. A target marketing strategy is focused on the customers’ needs and wants. Hence, a prerequisite for the development of this customer-centric strategy is the specification of the target markets that the companies will attempt to serve. The marketing managers who may consider using target marketing will usually break the market down into groups and to target the most profitable segments. They may adapt their marketing mix elements, including; products, prices, channels, and promotional tactics to suit the requirements of individual consumers. In sum, this chapter explains the three stages of target marketing, including; market segmentation (ii) market targeting and (iii) market positioning.

The four P's in marketing stand for product, price, promotion, and place. These four ideas contain the fundamentals of marketing, which are used in conjunction with market segmentation to define a target market to apply the ideas to. The four P's of marketing are merely a means to an end, which is to create a marketing plan that has the highest possibility of success within a target market. A target market is the key to applying the four P's of marketing,

Literature in the area of revenue (or yield) management concentrates largely on the operational issues of maximising revenues. The issues of profitability have been considered in recent years but practical attempts to implement an approach which recognises the profitability of different market segments have been problematic. This article considers the literature in the area of profitability and revenue management and

Purpose -The internet has become mainstream in everyday communications and transactions. This research aims to provide a segmentation analysis for the online market based on the various uses of the internet. Design/methodology/approach -A review of the online consumer segmentation literature is first conducted. Survey method and cluster analysis techniques are used in the empirical study. A sample of 407 participants that belonged to a large consumer panel adequately responded to an online survey and provided their pattern of internet use, internet experience, and psychological characteristics. Findings -The analysis shows that the online consumers form three global segments: the basic communicators (consumers that use the internet mainly to communicate via e-mail), the lurking shoppers (consumers that employ the internet to navigate and to heavily shop), and the social thrivers (consumers that exploit more the internet interactive features to socially interact by means of chatting, blogging, video streaming, and downloading). Subsequent x 2 and ANOVA tests illustrate that consumers from these segments exhibit significantly divergent demographic and experience profiles.

In the past decade, companies and academics have become aware of the great benefits of maintaining a solid base of loyal customers. Such customer loyalty is also important to other entities-such as tourist destinations. Building on the services-marketing literature, the present study develops an innovative model for evaluation of the effect of a destination's image on the loyalty intentions of tourists. The study then explores whether market heterogeneity affects this relationship by performing a latent cluster analysis. Four major clusters of tourists emerge-according to the tourists' need for variety. The results show that there are significant differences among these segments in terms of the effects of a destination's image on tourists' intentions to return to a destination and their intentions to recommend it to friends and relatives. r

Brand positioning is effective only to the extent that it aligns with prospects’ needs and interests and is viewed as worth spending their money on. Accordingly, marketing needs research tools that are capable of identifying the criteria that consumers use when choosing a brand in a given category. Yet all too often, studies ask consumers to rate brands with pre-specified attributes and benefit lists that may be at variance with the standards that come to mind naturally without cued prompting. Moreover, such methods may fail to capture the elusive—yet crucial—salient higher-order social and psycho-emotional reasons that lend importance to an individual’s decision and willingness-to-pay. This research builds on and extends the means-end approach to brand positioning that looks at brands through consumers’ eyes by developing a latent class segmentation model that examines preference heterogeneity and identifies segment-level differences in decision themes and reservation prices. Using data from an empirical field study, the model detects three distinct segments of potential high-end adopters of a next-generation cellphone with innovative design features. The results offer insights to guide go-to-market branding strategy, and related product line, pricing and positioning decisions. Implications for customer value assessment, benefit-based market segmentation, and innovation management are discussed.

Purpose -This article aims to examine the influence of marketing-controlled external motivators of impulse buying behaviour of snack foods in cafeterias among young students. Design/methodology/approach -A questionnaire was used to ask a sample of 200 young consumers about their impulse buying behaviour in cafeterias. The resulting data were submitted to an in-depth four-stage quantitative analysis. Findings -The results show that there is not a unique profile of impulse buying behaviour and that young consumers can be effectively segmented in five groups according to their impulsive buying behaviour of snack foods using the eight factors revealed in the exploratory factor analysis. A new segment of health/nutrition-conscientious impulsive consumers was uncovered and characterized.

This paper presents a typology of vacationers based on decision-making variables and processes. Employing a naturalistic perspective, the (summer) vacation decision-making process of 25 Belgian households was followed for a year. In-depth interview and observation data were analyzed and interpreted through the grounded theory methodology. Findings show that vacation decision-making is an ongoing process with a lot of contextual influences. A distinction is made between six types of vacationers: habitual, rational, hedonic, opportunistic, constrained and adaptable. This new typology may be useful for both theoretical and segmentation purposes. r

Market segmentation is critical for a good marketing and customer relationship management program. Traditionally, a marketer segments a market using general variables such as customer demographics and lifestyle. However, several problems have been identified and make the segmentation result unreliable. This paper develops a novel market segmentation methodology based on product specific variables such as purchased items and the associative monetary expenses from the transactional history of customers to resolve these problems. A purchasebased similarity measure, clustering algorithm, and clustering quality function are defined in this paper. A genetic algorithm approach is adopted to ensure that customers in the same cluster have the closest purchase patterns. After completing segmentation, a designated RFM model is used to analyze the relative profitability of each customer cluster. The findings from a practical marketing implementation study will also be discussed. q

The ecotourism literature is focused on market segmentation, ecological impacts of wildlife viewing, and community-based ecotourism, but there has been minimal attention to critical areas such as quality control, the industry, external environments or institutions even as the components and parameters of ecotourism are being extended. This imbalance, combined with the fragmentation and lack of integration within the literature, suggest that ecotourism, as a field of academic inquiry, is still in a state of adolescence. r

Purpose -To demonstrate the successful use of lifestage segmentation and survival analysis to identify cross-selling opportunities. Design/methodology/approach -The study applies lifestyle analysis and Cox's regression analysis model to behavioural and demographic data describing 10,979 UK customers of a large international insurance company. Findings -There are clear differences between the lifestage segments identified with respect to customer characteristics affecting the likelihood of a second purchase from the company and the timeframes within which that is likely to take place. The "mature" segments appear to offer greater opportunities for retention and cross-selling than the "younger" segments.

This paper focuses on recent British experience with telematics-based Demand Responsive Transport (DRT) services in rural areas. In recent years, the ability of DRT concepts to provide efficient, viable transport services has been greatly enhanced by the use of transport telematics as demonstrated in a variety of environments across Europe. The success of British local authorities in winning substantial funding under the Rural and Urban Bus Challenge programmes for the implementation of DRT has resulted in widespread interest in flexible forms of transport. It is thus timely to evaluate the impact of this substantial investment. Drawing on the experience of a number of UK schemes, the paper assesses the reasons for the new-found success of what is becoming a relatively well-accepted mode by concentrating on a variety of factors including: service characteristics (particularly route flexibility, flexibility of booking method and pre-booking regime), emerging markets and the overall contribution of DRT to increased social inclusion and intermodality. Impediments to the development of DRT services are highlighted. The paper also discusses current research into the next generation of DRT services and concludes by identifying some key issues for policy-makers concerned with the future implementation of DRT services.

To capture customers in different market segments, many firms distribute their products using multiple channels involving in-store, mail-order and electronic mediums. Nevertheless, the business literature is replete with examples where the management of multiple distribution channels becomes unwieldy. As a way to evaluate different distribution strategies arising from multiple channels, we develop a model of a general multi-channel distribution system subject to stochastic demand. Since the exact analysis of our model is intractable, we propose a decomposition scheme that enables us to develop a near-optimal distribution policy with minimum total expected distribution cost. We utilize our analysis of this multi-channel system in two specific applications arising from multi-channel distribution. The first application deals with a store-based retailer expanding into a direct sales channel. The retailer can fill the orders generated from this additional sales channel by using the existing stores or the existing depots. For this application, we evaluate the trade-off between these two options. The second application intends to find a cost-effective way to distribute products by utilizing the combined distribution system of two retailers after a potential merger-and-acquisition (M&A). For this application, we quantify the benefit of an M&A in terms of distribution efficiency. technology to handle the distribution of toys for Toys ÔRÕ Us. Second, launching multiple channels might be an effective strategy for sales expansion. Based on a study of computer industry in Europe, concluded that channel proliferation is often triggered by increased competitive environment. For instance, as retailing competition gets fierce, LandsÕ End, a direct apparel retailer famous for its mail-order catalog business, not only launched an online sales channel in 1995, but also partnered with Sears to offer its products in the store channel starting in 2002. Although multiple channels enable firms to capture customers in different market segments, they pose many challenges including channel conflict , pricing policy for different channels , and distribution strategies. As firms increase their number of sales channels, it is important to develop economic assessment of different distribution strategies.