Segmenting the Energy Market: Problems and Successes

This case explores the use of market segmentation and the practical difficulties often encountered in such work. The solutions to these difficulties are highlighted. The case is based on the deregulated and highly competitive UK market for energy, namely gas and electricity supply. With little product differentiation possible, gas and electricity tend to be price-driven purchases, which increases the importance of effective segmentation and shrewd target segment selection. Both consumer and business segments are cited, with the case focusing more on the business-to-business outcomes for this energy provider. The approach adopted for selecting which segments to target is also featured. The case is appropriate for modules in marketing strategy, target marketing and marketing management, at MBA, MSc or advanced UG levels.