A BENEFIT-BASED APPROACH TO MARKET SEGMENTATION: A CASE STUDY OF AN AMERICAN SPECIALTY

Specialty coffeehouses have become an increasingly important segment of the foodser-vice industry in Hong Kong. The exponential growth of this segment has generated keen competition. Without a good understanding of their customers, these coffeehouses may end up losing market share to competitors. The purpose of this study is to identify the market segments in Hong Kong specialty coffeehouses based on the benefits sought by customers when they visit specialty coffeehouses. A survey of 1,000 customers was con-ducted. The results of this study support the effectiveness of segmenting the specialty cof-feehouse customers in Hong Kong using the benefits variable. Four distinct segments of customers were identified: service seekers, atmosphere seekers, quality coffee seekers, and marketing-oriented customers. Based on the differences in coffeehouse selection fac-tors, sociodemographic variables, and coffee consumption behaviors among the four segments, managers of specialty coffeehouses in Hong Kong can customize their strate-gies to meet the needs of these four market segments