A Framework for Applying Logistical Segmentation

Most firms have traditionally offered one level of logistics service to all customers. This often results in some customer groups receiving more service than necessary, while other groups receive less service than necessary. The emerging concept of logistical segmentation suggests that companies can structure their logistical offerings to meet the needs and requirements of different customer groups. Uses the “nested” approach from industrial marketing to illustrate an application of logistical segmentation. More specifically, examines the importance of selection factors in modal choice for international sourcing according to geographic location, primary mode of transport, and job responsibilities. Uses empirical data from a group of regional purchasing managers to facilitate understanding of the nested approach.