Customer Segmentation Through Quantitative Analysis

In contrast to the former type of analysis, quantitative analyses rely on figures and measures that are extracted from running businesses. Again, comparable to the qualitative segmentation concepts, different levels of sophistication can be pursued, depending on the purpose of segmentation and the available data. 

The ABC analysis is a very classic and basic tool of segmentation and can be applied to a wide variety of purposes, be it, for example, in production or marketing. Due to the fact that it is based on simple, non-arithmetic principles, it can easily be performed. Nonetheless, it offers understandable results and easy-to-implement managerial decision-making aids. 

As the ABC analysis is a commonly utilized method, a great number of textbooks can be found which describe it. From among a range of fairly equal options, the decision was made to take the excellent book by Homburg and Krohmer (2006) as the point of reference for the following explanation of ABC customer segmentation. 

However, as the Pareto law already indicates, the size of the segments A, B and 

C is inversely correlated to the volume of purchase therefore, although purchasing only 5 % of the entire volume, segment C consists of the largest number of customers. 

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