Wendell R . Smith Product Differentiation and Market Segmentation As Alternative Marketing Strategies

D uring the 1930s, the work of Robinson and Chamber!in resulted in a revitalization of economic theory. While classical and neoclassical theory provided a useful framework for economic analysis, the theories of perfect competition and pure monopoly had become inadequate as explanations of the contemporary business scene. The theory of perfect competition assumes homogeneity among the components of both the demand and supply sides of the market., but diversity or heterogeneity is now the rule rather than the exception. Major marketing strategy alternatives are available to planners and merchandisers of products in an environment characterized by impertect competition.