Using Market Segmentation Approaches to Understand the Green Consumer

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The Oxford Handbook of Business and the Natural Environment, 2012
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© Oxford University Press 2012. All rights reserved. This article describes how one can apply models of market segmentation to the understanding of the varying nature of green consumers. It reviews two approaches of segmentation and argues that only one of them will be effective when attempting to understand socially laden consumption behavior. A discussion of how one can think about segmentation from this perspective is presented. Preference heterogeneity is a necessary but not sufficient condition for effective segmentation and that heterogeneity can lead to non-obvious outcomes. Segmentation is affected by the variance of consumer preferences. Moreover, the article considers three areas of application: examples of a priori segmentation; examples of behavioral segmentation; and developing a general way of thinking about applications of segmentation models. It is impossible to understand green consumption without a complete understanding of the non-green aspects of particular consumption contexts.
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