Generalized linear interactive model for market segmentation: The air freight market

This study aims to provide a case study that improves the effectiveness of the macro segmentation approach. Generalized linear interactive model is applied to link macro indicators with customer consumption under the assumption of competition. The empirical portion of this study segments the air freight market of Taiwanese high-tech industry. Five segmentation variables are identified and examined using 511 air shipment contracts collected from 151 high-tech manufacturers. The study results conclude that market classification between forwarder and express is less clearly defined due to carriers' service enlargements and customers' changing needs. Shipment destination and size may still serve as effective market classifications to divide air freight market into twelve segments, whereas time in transit, shipment frequency, and product status, have lost their validation in segmenting the market. The segmentation examinations may help air carrier industry understand customer defection and attrition and provide strategic insights for targeting segments and positioning service strategies.