Assessing the applicability of market segmentation in the development of

tealackingAI and Robotics

Nov 8, 2013 (3 years and 7 months ago)

53 views

Assessing the applicability of market segmentation in the development of
elderly
care


Sanna Sintonen*, D.Sc. (Econ
. & Bus. Adm.
), Lappeenranta University of Technology, School of Business, P.O. Box
20, FIN
-
53851 Lappeenranta, Finland, sanna.sintonen@lut.f
i, +358
-
40
-
833 6796

Timo Hokkanen, M.
Soc.
Sc., University of Eastern Finland,
Faculty of Social Sciences and Business Studies
, PL 1627,
FIN
-
70211 Kuopio,
Finland,
thokkane@uef.fi, +358
-
40
-
513 7904

Daniela Grudinschi, M.Sc. (Tech
.
), Lappeenranta University o
f Technology, Technology Business Research Center,
P.O. Box 20, FIN
-
53851 Lappeenranta, Finland, daniela.grudinschi@lut.fi, +358
-
40
-
833 6014

Jukka Hallikas, D.Sc. (Tech
.
), Lappeenranta University of Technology, Technology Business Research Center, P.O.
Box

20, FIN
-
53851 Lappeenranta, Finland, jukka.hallikas@lut.fi, +358
-
40
-
550 7499

Leena Kaljunen, D.Sc. (
Econ.
& Bus. Adm.
)
, Lappeenranta University of Technology, Technology Business Research
Center
, P.O. Box 20, FIN
-
53851 Lappeenranta, Finland, leena.kaljune
n@lut.fi, +358
-
40
-
833 0284


*Corresponding author

Abstract


The organizing responsibility of elderly care is mainly in the public sector, which is under heavy
pressure to keep the costs in tight rein due to aging of the population.
The present paper appro
aches
the reorganization possibilities of
welfare services for elderly

through segmentation.

Considering
the services that elderly need, there are three possible instances that could fill the needs related to
elderly

welfare
:
the
public
sector,

private ser
vice producers and non
-
profit organizations based on
voluntary work. Segmentation is used as a method to discover the service need and to assess the
opportunities for service delivering from each of the mentioned instances.
Empirical evidence is
provided w
ith
two different data sets. The selection of
segmentation basis

is discussed,

i.e.
the
selection of
the
proper

set of variables or characteristics used to assign potential
customers to
homogeneous groups
.
Due to the fact that we use
two

unrelated data set
s, we are able to produce
two
different segmentation solutions that will
give an extend view for planning the entirety of the
elderly welfare
service
s

so that the
private
and non
-
profit
services complement the legally
guaranteed public services.



KEYWORD
S:
market segmentation; segmentation model; elderly
care
; service delivery


1

Introduction


The population forecasts indicate a growing number of aging people in Finland. The share of
elderly in the population is about to double during the next two decades.
If the course of public
expenditure related to health and social care follows the same track, the costs will increase in
billions at national level. According to Finnish legislation,
municipalities have to promote the
welfare of their inhabitants

and
the r
esponsibility to organize social and health care is given to
municipalities. Legislation doesn’t give any obligation for
the
public sector to produce services on
its own. This has mainly lead to the situation where
the
public sector provides the majority o
f
services and private and third sector (i.e. voluntary and non
-
profit associations) fill the gaps in
provision of services. In purchasing
social and health care
services public sector has three
possibilities according the regulation: 1) public procurement
, 2) individual commitment to services
and 3) service vouchers. In public procurement a municipality creates criteria according to which
the decision of service producer
s

and the price is concluded in open competition. Individual
commitment for service is
made by the special and unique need of citizen. Individual commitment
is possible when there are only a few persons who need their kind of service. In service voucher
system the elderly can choose from approved producers the service
they
prefer. Municipali
ty gives
restricted value voucher to the named service and the client himself pays the exceeding price. In
public procurement the competition in the markets is mainly run by public sector and in service
voucher by citizens. By the law municipalities are ob
ligated to give their inhabitants sufficient
social and health care but elderly seem to need more than

today’s

home care, sheltered housing and
institutional care. Basically, the same portfolio of
municipal
services is available to everyone, who
meets pred
etermined criteria (e.g. severely low coping in ADL). From the economical point of
view, the higher th
e level of institutionalization and

the higher the costs. It is therefore necessary to
analyze the elderly as a market, and achieve a
welfare
service syst
em that (1) is able to meet the
hidden needs (i.e. those people that do not meet the public
elderly
service criteria), (2) makes the
preventive and proactive

services efficiently available before the
actual

care
and institutional
services
becomes topical a
nd (3) takes
into
account
of individual needs

and resources
. Considering
the public service
s
, only 26 % from over 75 year olds were given elderly care by obligation of
municipalities, meaning that totally of 316.000 people are coping outside public
elderly

care
services. This group of elderly still needs and partly uses some other services to maintain their
quality of life and capability to manage everyday life. The dissection of aging people should not be
limited on the public
welfare
services, instead the

perspective should be toward the whole market,
where public sector has its obligations and the private
and
non
-
profit

sector
s

ha
ve

opportunit
ies

to
develop toward a competitive market

and
to serve appropriate target groups.

The segmentation of
aging peopl
e should produce the target audiences for public
welfare
services in different life courses
as well as existence of free market available private companies

and also point the possibilities for
non
-
profit service organizations
.


2

Market segmentation and tar
geting of services


As a theory, market segmentation is the grouping of potential customers into sets that are
homogeneous in response to some elements of the marketing mix. As a strategy, it is the allocation
of marketing resources, given a heterogeneous
customer population.
(Woodside, et al., 1989)

The
fundamental thesis of market segmentation is that to achieve competitive
advantage and, thereby,
superior financial performance, firms should identify segments of demand, target specific segments,
and develop specific marketing mixes for each targeted segment
(Hunt and Arnett, 2004)
.
Social
and h
ealthcare organizations are increasingly interested in such issues as product line management
and market segmentation. Under the pressure to create a
nd implement new programs and services,
healthcare providers have acknowledged that they cannot be all things to all people.
(Gehrt and
Pinto, 1991)

The need to segment an
d target markets has always been important for planning
purposes
(Pak and Pol, 1996)
. According to
Stone et al.

(
1990)
, the market segmentation method
can help health service provi
ders



determine which services to offer,



determine the message strategy and tactics for communication campaigns, and



identify the important members of a referral network as well as the direction for
communications with members of the network.


When market s
egmentation is applied in
the
public sector,

the purpose is not
just
the selection of
target segments. Instead, the segmenting of the population should concern different services and
especially different ways of serving customers in different segments. Ser
ving the segments in the
right way should help to gain efficiency improvements and advantages to
allocate

scarce resources
.


The first task faced by the market researchers in the segmentation procedure i
s

the selection of a
segmentation basis which is
defi
ned as a set of variables or characteristics used to assign potential
customers to homogeneous groups
(Wedel and Kamakura, 1998)
. Because segmentation is based on
the premise that subgroupings differ, any factors that show variability in behavior in the
marketplace can conceivably be used as a basis for d
eveloping subgroups
(Moschis, 1992)
.
Differences in consumer responses among older people are not likely to be the result of any specific
factors
(Moschis, 1992)
.

Bone

(
1991)

reviewed segmentation studies and found five key
segmentation v
ariables: 1) discretionary income, 2) health, 3) activity level, 4) discretionary time,
and 5) response to others. Chronological age is one of the most common methods suggested for
segmenting the mature market
(Bone, 1991)
, but it has been suggested that chronological age is
unlikely to be a good
segmentation tool
(Bone, 1991, Smith and Moschis, 1985)
. This has been
explained with psychological age
(Smith and Moschis, 1985)
, and on the other hand age is just a
proxy for other influential characteristics such as the level of activity and health
(Dytchwald and
Zitter, 1987)
. There is a great deal of demographic and healthcare heterogeneity among age cohorts
in the population of

50
-
year
-
olds and older
(Pak and Pol, 1996)
. According to
Dytchwald and Zitter
(
1987)
, elderly markets can be segme
nted along a number of dimensions, of which one included
health status reflected by the level of activity, the presence of chronic diseases, the degree of
functional disabilities, and the type of ailment. Seniors in good health have more in common than
the
y do with their immediate age cohorts who are in poorer health
(Stein Wellner, 2003)
. The use of
variables that measure a person’s functional or
mental
capacity may more appropriately capture
aging than chronological age pe
r se
(Moschis, 1991)
.


Because p
ublic social and health services are organized by municipalities

in many Westerns
societies
, they

have to make decisions about the
quantity and quality of services for inhabitants.
Commonly the service structure is based on analysis on inhabitants needs, economical capability of
municipality, state of the wel
fare and supply of the services

(Kananoja

et al.
,

2008
)
.

However the
c
urrent

social and health care services of elderly have strong roots in a predominantly medical
model in which the primary objective is to ensure that care is provided (Thompson & Thompson
2001).
The functional ability scales are used to measure individual needs
of the elderly.
Municipalities usually give scale score limits to access the public services. Information given by
scales is also used to finding out the need of the whole population.
Functional ability is a
wide
concept related to well
-
being, and the dia
gnosed diseases are only one small part of it. Functional
abilities can be approached from three dimensions: physical,
mental
and social abilities. Typically,
the discussion concerns of functional limitations occurring in performing the routine tasks of da
ily
living. Activities of daily living (ADL) and instrumental activities of daily living (IALD) are
measures commonly used as one of the criterion for the eligibility. ADLs generally are the ability to
eat, dress, walk, toilet, and bathe, activities consid
ered necessary for a person to care for him or
herself directly or independently
(S
livinske, et al., 1998)
. IADLs on the other hand include ability to
shop, prepare meals, do housework and take medication. Emphasis on ADLs and IADLs stems
from three features: these activities are universal or nearly so in a society; trouble doing them
i
mplies serious dysfunction; and personal of equipment assistance is needed to counter ADL/IADL
dysfunctions, thus entailing public and private costs
(Verbrugge, 1997)
.


1
.
House cleaning
2
.
Shopping
3
.
Use of public transportation
4
.
Cooking
5
.
Washing
6
.
Dressing
7
.
Toilet
8
.
Going to bed
,
getting out of the bed
9
.
Continence
10
.
Eating


Figure
1

Decline of functioning
(Nyholm and Suominen, 1999)


Illustrated in F
igure
1
, the first disabilities appear in housecleaning and shopping. When the level of
functioning continues to decrease problems are found in usage of pu
blic transportation and cooking.
Finally, when the ability to live independently is very low people find difficulties in getting to and
out of bed, in continence, and in eating. At the latest nor later than this institutional care is
necessary if homecare
cannot be arranged. Functional abilities are thus one critical aspect to the
need for home care services.


The ideal market for welfare services uses the whole market, not just those elderly that are in the
reach of the
care
services provided by the commu
nity. The basic attempt is to form segments based
on service needs

using the level of functioning as a segmentation basis
(Figure 2).




Cluster identification
:
Clustering basis
:
Service need assessment
with ADL scale
Socio
-
economic profile

Gender

Age

Marital status

Income
Self
-
evaluation of well
-
being

Self
-
rated health


Figure
2

The process of segmentation in the research


All the segments will be assessed bas
ed on socio
-
economic indicators, i.e. gender, age, marital
status and income. This would give more understanding of how the segment would develop in
future and which segments are prone for consuming and buying services to help them cover the
daily living t
asks before entering the municipal services. The segments will also be evaluated with
self
-
evaluation of current health. This concept is usually referred as self
-
rated health or perceived
health. Self
-
rated health is considered to be a concept that refers
to individual responses to physical,
mental and social effects of illness on daily living and considered to be one part of quality of life
(Vaez, et al., 2004)
.

Bjorner et al.

(
1996)

define self
-
rated health as the individual’s perception and
evaluation of his or her health including perception of symptoms, well
-
being, general health and
vulnerability. According to Leinonen
(Leinonen, 2002)
, self
-
rated health is determined by the
existence or absence of chronicle diseases, level of functioning, way of living, psychological well
-
being,
socio
-
demographic and socio
-
economic factors and adaptation to changes emerging through
aging. The person’s resources and limitations, and the demands and resources of the environment,
are perceived to be in balance when self
-
rated health is good
(Hå
kansson, et al., 2003)
. Perceived
health is considered to be a good predictor of needed doctor’s consultation and use of medication
(Fielding and Li, 1997)
, and additionally it has turned out to be a predictor of mortality as well
(Idler and Angel
, 1990)
. Self
-
assessed health status is a major factor determining if, when and
where care is sought
(Pak and Pol, 1996)
. Self
-
rated health (SRH) is a really complex concept, as a
person may be diagnosed with a chronic condition but still feel relatively healthy
(Alpass and
Neville, 2003, Stein Wellner, 2003)
. Self
-
rated health seems to be an important indicator of several
aspects of functioning and may be focused on preventing morbidity, functional limitations, s
ick
leave and disability pension and promoting health
(Håkansson, et al., 2003)
.


3

Empirical study


3.1

Description of the data and measurement


The present paper uses
two

datasets as empirical evidence.
Both of them
were collected separately
and are not

related.

The
first
data was collected with a mail survey during a research process. The
data represent 55
-
79 year old people from one city, and it was collected with a mail survey and the
sample was stratified with five year age categories and achieved a
good fit actual age distribution of
the target population. Totally 569 answers were received and 547 of them were accepted for the
analysis.

The
second
data was
also collected with mail survey

in Finland and t
he sample was
stratified with age
. The number o
f responses received was
1677

and
analysis include
s

1588 cases.


Service need was reflected with functional abilities measured with activities of daily living scale.
The scales were different across the surveys
leading to separate analysi
s of measurement s
cales.
Table 1

summarizes the measurement concerning the segmentation basis

in
both

datasets
.
Factor
analysis with varimax rotation was used to reveal the underlying dimension of functional abilities
related to different
daily

tasks.
Summated scales of the

reflected dimensions were used in the
clustering.


Table
1

Measurement items

Data
set

Response scale

Extracted ADL
dimensions

I
tems

Summated scale
s
tatistics

Data

1

1=unable to cope

3=well
-
coping

Personal matters

Eating

Having a
wash

Getting in and out of bed

Dressing

Going to toilet

α=
.864

mean=
2.955

std.dev=
.182

Heavier tasks

Home repairs

Gardening

Shopping

House
-
cleaning

Outdoor activities

α=
.857

mean=
2.674

std.dev=
.523

Lighter tasks

Cooking

Laundering

α=
.819

mean=
2.723

std.dev=
.607

Data
2

1= unable to cope

7=well
-
coping

Shop
ping

Perishables

Consumer goods

α=.892

mean=6.287

std.dev=1.498

Moving outside home

Moving to shops etc.

Using vehicles

Outdoor activities

α=.828

mean=6.348

std.dev=1.309

Heavier housework

Home repairs

Gardening

α=.759

mean=5.391

std.dev=1.848

Lig
hter housework

Housecleaning

Laundering

Cooking

α=.851

mean=6.092

std.dev=1.523

Medicine

Taking medicine

Dosage of medicine

α=.922

mean=6.602

std.dev=1.308

Personal matters

Eating

Having a wash

α=.940

mean=6.642

std.dev=1.243



The
first

data provid
ed three dimensions from the activities of daily living scale. The r
eliability
coefficients suggest

that
the measurement provides a good reliability for the further analysis

based
on Cronbach’s alfa
(Hair, et al., 1998)
. The
second
data provided six factors to indicate the coping
with everyday tasks.
The
se

dimensions had
also
excellent level of reliability.


3.2

Segmentation models based on empirical ev
idence


Two clustering models were created with a two
-
step procedure

(
see
Zhang, et al., 1996)
.
As
discussed above, t
he segmentation basis is
a bit different in
each model
, due to the fact that the
measurement items were
n’t the same
. The activities of daily living is however the baseline for
segmentation.



3.2.1

M
odel
1
: Segments based on
the
first data
set


The two
-
step clustering procedure gave
four cluster
s as a resu
lt
, with a good fit to data, and all of
the component
s

of ADL produced significant differences between the clusters

(Figure
3
)
.
The mean
comparison with one way analysis of variance (ANOVA) indicates significant differences between
the cluster for all the
clustering variables (p<.001).

Table 2 summarizes the descriptive information
of the cluster
s
.



Figure
3

Mean
comparison between cluster
s

by the clustering variables


The first cluster includes
well coping

elderly
.

All dimensions

of ADL indicate that this group
doesn’t need help for the basic activities of daily living. A further analysis shows that this group is
the youngest and the perception of own health status receives highest values, also supporting the
fact that no function
al limitations exist. The income level is also higher compared to the third and
fourth group.


The second segment has
limited functional abilities related to lighter house working
. The segment
is well
-
coping considering the personal matters, but shows a li
ttle decrease in heavy housework and
a significantly lower level of coping when concerning lighter housework. This segment is therefore
interesting that the further analysis shows that this group is olde
r compared to the first cluster

and
includes mainly m
en. This partly explains the distinction related to the difficulties in lighter house
work, because the tradition has been that females in the household are responsible related to
cooking and housekeeping. A large share of the respondents in this segment a
re not living alone,
and therefore the assistance related to housekeeping isn’t acute, but is emerging if something
unexpected occurs and females spouses become unable to take care lighter house works. The
perception of one
’s own

health is at the average l
evel and the level of income indicates that these
people are the wealthiest in the sample.


Table
2

D
escriptive information of the clusters


Cluster 1

Cluster 2

Cluster 3

Cluster4

Description

Well coping elderly

Limited functional
abilities related to
lighter

house
work

Limited functional
abilities related to
heavier housework

Limited functioning

Size

61.1%

11.1 %

21.6%

6.2%

Gend
er

Even share of males
and females

Mainly men (88%)

Mainly women (87%)

Men (62%)

Marital status

Mainl
y couples

(70%)

Mainly couples

(90%)

Mainly couples, but
more people l
iving
alone (40%)

Mainly couples

(63%)

Age*

63,90

68,57

67,51

69,94

Income*
1)

2,99

3,14

2,37

2,12

Self
-
rated
health*
2)

3,29

2,58

2,01

1,13

*
Mean values presented, c
luster comparison
made with ANOVA (p<.001)

1)

Measurement scale 1
-
7, 1=less than 500 euros, 7=more than 3000 euros

2)

Measurement scale 1
-
5, 1=very poor health, 5=excellent health status


The
third segment
has
limited functional abilities related to heavier house working
. T
his segment
such as the previous
doesn’t need help in personal activities. The functioning in heavier housework
is more limited compared to the previous group, but the lighter house works are still in or
der and no
help is needed.
M
ost of
the segment consis
ts of females, which
explain
s

the low coping in heavier
house
work

that
traditionally
are

dedicated to males. The difficulties are real,
because a large share
of the segment is living alone if
compared to the first two segments
.



The
final group is the sma
llest one,
and succeeds in
sorting out the aging people
with
limited
functioning

that have difficulties
also in
taking care of personal activities. This group has also the
lowest ability to cope with heavier as well as lighter house working, thus being a g
roup that is
reaching the level of municipal
elderly
services.
This segment is the oldest and the

low

level of self
-
rated health
also indicates

the inability to cope with everyday activities.


3.2.2

Model
2
: Segments based on
the
second

dataset


The
second
seg
mentation model was based on six indicators

of

functioning. The two
-
step clustering
method was

able to identify four clusters
. Figure
4

illustrates the group means.

The differences
between clusters in all the clustering variables were statistically signifi
cant.
This data gives a bit
different kind model, because it succeeds in tracking the decrease
in
functioning in all the
areas

that
were
assessed
.



Figure
4

Mean
comparison between the clusters by the clustering variables


It cle
arly can be seen that the first cluster

captures the truly
well
-
coping elderly

and this is supported
with all dimensions of the ADL scale.

Gen
der distribution is quite even, and m
ajority of the
segment is living with a spouse. This segment is also the youn
gest one

and has a relatively high
-
level of income
.


The second segment is still rather well
-
coping, but shows
tendency for decreasing abilities for
housework
, for both lighter and heavier tasks.

Similarly as in the previous group, the gender
distribution
is almost even

and

larger part of the segment is living with a spouse. This group is the
second youngest

and also has relatively high level of income
.


Table
3

D
escriptive information of the clusters


Cluster 1

Cluster 2

Cluster 3

Cluster4

Description

Well
-
coping elderly

Tendency for
decreasing abilities for
housework

More deteriorated
functioning

Limited
functioning

Size

67,6 %

16,4 %

11,8 %

4,2 %

Gend
er

Women (60%)

Men (55%)

Men (62%)

Even share of males
and females

Marital
status

Mainly couples (70%)

Mainly couples (75%)

Mainly couples (75%)

Largest share of
people living alone
(40%)

Age*

66,54

69,14

70,93

72,85

Income*
1)

4,76

4,64

3,89

3,70

Self
-
rated
health*
2)

5,29

4,63

3,93

4,48

*Mean values presented, cluster compari
son made with ANOVA (p<.001)

1)

Measurement sca
le 1
-
10, 1=less than 600 euros, 10
=more than 3000 euros

2)

Measurement scale 1
-
7, 1=very poor health, 7
=excellent health status


The third group

has

more deteriorated
functioning

in all other areas

expect
taki
ng care of
medication

and personal matters.

This se
gment has larger share of males,
and
the distribution of
marital status is similar with the previous group.

Members of this group are a bit old
er than those in
previous group, and this cluster includes mem
bers that evaluated their state of health being the
poorest.

The income level is lower compared to the two previous clusters.



The final
cluster
has already
limited
functioning

in all tasks of daily living.

Ge
nder distribution is
quite even
. Compared to t
he other groups, this segment has large share of
people living alone.
This
segment evaluates the state of their current health being
better than elderly in the previous cluster
.
On average, this segment is the oldest and has the lowest income.


3.2.3

Findings


Figure 5 summarizes the results of the empirical study mainly based on the second segmentation
model. The following discussion will however consider the service system separately for both
models.
Considering the organizing of
elderly welfare

services, base
d on the
first
segmentation
model, the first three groups are those aging could be served with private competitive organizations

to meet also the hidden needs
. Th
e first

segment could be the one that acquires services from
companies, but not necessary on t
he basis of limited coping. The second segment is yet at a good
position although limitation
s

exist, the need for

services good rapidly change if

sudden illness is
faced by the spouses that take care of household issues. The service system should be able t
o
develop a response system so that the acute changes could be responded before the maintenance of
everyday activities is lost. The third segment is the
target audience

for non
-
profit organizations,
because the need for help in everyday life in this segmen
t isn’t necessary in the
municipal
obligations defined by
criteria

locally set down
. Due to the low income, the help in heavier
housework (doing small repairs, gardening etc.)
could be provided by
the third parties and voluntary
work
in order
to maintain t
he quality of life and assist elderly to live in their own homes.
For public
sector these three groups can be seen as important target groups for preventive and proactive
services provided mainly by other municipal sectors than social and health care
or sp
ecific elderly
care
such as technical and environment (welfare supportive environments), leisure and physical
exercise
sectors (maintaining social, mental and physical welfare)
.
The final cluster is the one that is
partly in the reach of municipal

elderly
care

services provided by social and health care sector
but
also has clear place for services organized by non
-
profit organizations.


Segment
1
Well
-
coping elderly
Segment
2
Tendency for decreasing
abilities for housework
Segment
3
More deteriorated
functioning
Segment
4
Limited
funtioning
Consumed services
-

services bought
not based

on functional limitations
Basic social and health care
Other municipal sectors
(
techinical
,
environment
,
leisure e
.
g
.)
Consumed services
-

services bought
based
on
functional limitations
Basic social and health care
Other municipal sectors
Basic social and health care
Other municipal sectors
Elderly care
(
Home care
,
housing
services e
.
g
.)
Consumed services
-

services bought
based
on
functional limitations
Non
-
profit service producers
-

Economic limitations
-

Services needed outside
the public sector oblications
Non
-
profit service producers
-

Economic limitations
-

Services needed outside
the public sector oblications
4
.
7
.
2011

-

11
.
7
.
2011
Private market
24
.
7
.
2011

-

31
.
7
.
2011
Non
-
profit market
24
.
7
.
2011

-

31
.
7
.
2011
Public market

Figure
5

The segments and possibilities for service delivery



The

second

segmentation model wa
s able track the expected life span were the deterioration of
functioning proceeds with age. The evaluation of self
-
rated health however suggests that although
the functioning in everyday tasks is lower, the level
of
perceived health is higher than assumed
.
The
first two segments have significantly higher incomes than the last two groups. This gives a
promising view for private sector operators, since there already exists limitations in heavier
housework and also some deterioration is detected in the other
physically emphasized dimensions
of ADL.
On the other hand, these group
s may be the ones that consume
services not because their
functioning requires, but merely for releasing time and effort for other issues considered important
in life.
The last two segm
ent
s are those that could be served

more

by non
-
profit organizations, and
the last segment is clearly the one needing municipal
elderly care
services.
Especially, moving
outside home and shopping are not necessities that the public sector needs to take car
e of, leading
thus the opportunity for non
-
profit
-
organizations to target for these issues.



4

Conclusions


The public and non
-
profit sectors may apply market segmentation and separate the total group of
elderly into smaller, diverse segments to allocate sc
arce resources effectively.
As analysis shows us
the majority of elderly people cope in
their
daily living with a little assistance or with no assistance at all. In
the
public
elderly care
the main focus is to provide service
s

to those who have lowest capa
city to take care of
themselves. The municipalities should be also interested in
providing preventive and
proactive
activities
for
the elderly

of other segments

to maintain their condition and so
enable them
to remain independent.
As helping people to main
tain their lives in their own homes has an opportunity to save in more expensive
care such as institutional care.


However w
elfare supportive
circumstances and services
to promote
health
could be
provided largely in other
municipal
sectors than social and
health care

and also in
private sector.


According to several studies
about elderly
the first stage of frailty is loss of grip power in hands. Lack of
grip power in hands is considered to predict old age disability
(Hyatt et al., 1990; Rantanen et al. 1999
).
As municipalities give service to aged who have serious loss of ability there is obvious need for
those who could cope with such help as cleaning, help with cooking and home maintenance. For
example, in the study of Hiironen (2008) it was shown that

20,
2% of people aged
between 55
between 70 are willing to buy cleaning services from private sector. The other services that people
are likely to buy are help with home maintenance, filling the tax declaration,

opening jars and
garden works.

As our results sh
ow the majority of elderly have minor decrease in capabilities. It´s
also to be noticed that the income level of those who need only little help is higher than the more
frail. That leaves the potential customer segment for private markets to emerge.

It is
commonly
acknowledged that he public sector can benefit from the private and third sectors service production
in help with elderly.
There can be several solutions considered in making private supply to meet
individual needs of the elderly that are in help
which the public sector doesn´t fulfill.

For

elderly
availability and easy use of
needed
services are important and therefore the
inter
sectoral
cooperation

and service integration are
crucial subject
s

of development

in segmented market.

Therefore the measu
rement and research related to disabilities of the aging people should be done
and disseminated so that all the possible actors in the service system would be aware and able to
target services correctly.




References


Alpass, F. M. and

Neville, S., 'Loneliness, Health and Depression', 2003, Aging & Mental Health,
7, p. 212
-
216.


Bjorner, J. B., Kristensen, T. S., Orth
-
Gomér, K., Tibblin, G., Sullivan, M. and Westerholm, P.,
Self
-
Rated Health: A Useful Concept in Research, Prevention and

Clinical Medicine, Ord & Form
Ab, 1996, 144.

Bone, P. F., 'Identifying Mature Segments', 1991, The Journal of Services Marketing, 5, p. 47
-
60.


Dytchwald, K. and Zitter, M., 'A Blueprint for Hospitals in an Aging Society: Segmenting the Elder
Market', 198
7, The Healthcare Forum Journal, 39, p. 37
-
38.


Fielding, R. and Li, J., 'A Validation of the Concept of Current Perceived Health and the Current
Perceived Health
-
42 (CHP
-
42) Questionnaire', 1997, Quality of Life Research, 6, p. 35
-
42.


Gehrt, K. C. and Pi
nto, M. B., 'The Impact of Situational Factors on Health Care Preferences:
Exploring the Prospect of Situationally Based Segmentation', 1991, Journal of Health Care
Marketing, 11, p. 41
-
52.


Hair, J. F., Anderson, R. E., Tatham, R. L. and Black, W. C., Mul
tivariate Data Analysis, Prentice
Hall, 1998, 730.


Hiironen, M.
-
L., Hoivayritykset kotona asuvien ikääntyneiden toimintakyvyn tukena; Ikääntyvien,
kuntapäättäjien ja hoivayrittäjien näkökulma, University of Jyväskylä, 2008.



Hunt, S. D. and Arnett, D. B.
, 'Market Segmentation Strategy, Competitive Advantage, and Public
Policy: Grounding Segmentation Strategy in Resource
-
Advantage Theory', 2004, Australasian
Marketing Journal, 12, p. 7
-
25.


Hyatt, R., Whitelaw, M., Bhat, A., Scott, S. and Maxwell, J., 'As
sociation of muscle strength with

functional status of elderly people', 1990,
Age and Ageing
,

p.
330
-
336.


Håkansson, C., Svartvik, L., Lidfeldt, J., Nerbrand, C., Samsioe, G., Scherstén, B. and Nilsson, P.
M., 'Self
-
Rated Health in Middle
-
Aged Women: Asso
ciations with Sense of Coherence and
Socioeconomic and Health
-
Related Factors', 2003, Scandinavian Journal of Occupational Therapy,
10, p. 99
-
106.


Idler, E. L. and Angel, R. J., 'Self
-
rated Health and Mortality in the NHANES
-
I Epiemiologic
Follow
-
up Study
', 1990, American Journal of Public Health, 80, p. 446
-
452.


Kananoja, A., Jokiranta, H. and Niiranen, V., Kunnallinen sosiaalipolitiikka: Osallisuutta ja
yhteisvastuuta, PS
-
kustannus, 2008.


Leinonen, R., 'Self
-
Rated Health in Old Age: A Follow
-
up Study o
f Changes and Determinants',
2002, Sport and Health Sciences, Doctoral Dissertation, p. 65.


Moschis, G. P., 'Approaches to the Study of Consuemr Behavior in Late Life', 1991, Advances in
Consumers Research, 18, p. 517
-
520.


Moschis, G. P., 'Gerontographic
s: A Scientific Approach to Analyzing and Targeting the Mature
Market', 1992, The Journal of Services Marketing, 6, p. 17
-
26.


Nyholm, M.
-
L. and Suominen, H., 'Pa
lveluverkossa yötäpäivää', 1999.



Pak, S. and Pol, L. G., 'Segmenting the Senior Health Care
Market', 1996, Health Marketing
Quarterly, 13, p. 63
-
77.


Rantanen, T., Guralnik, J., Foley, D., Masaki, K., Leveille, S., David Curb, J. and White, L.,
'
Midlife hand grip strength as a predictor of old age disability', JAMA, 1999; 281, p. 558
-
560.


Slivin
ske, L. R., Fitch, V. L. and Wingerson, N. W., 'The Effect of Functional Disability on Service
Utilization: Implications for Long
-
Term Care', 19
98, Health & Social Work, 23.



Smith, R. B. and Moschis, G. P., 'A Socialization Perspective on Selected Consum
er Characteristics
of the Elderly', 1985, Journal of Consumer Affairs, 19, p. 74
-
95.


Stein Wellner, A., 'Segmenting Seniors', 2003, Forecast, 23, p. 1
-
4.


Stone, T. R., Warren, W. E. and Stevens, R. E., 'Segmenting the Mental Health Care Market', 1990,
Jo
urnal of Health Care Marketing, 10, p. 65
-
69.


Thompson, N. and Thompson, S. Empowering older people. Beyond the care model. 2001, Journal
of Social Work, April 2001, 1, p. 61
-

76


Vaez, M., Kristenson, M. and
Laflamme, L., 'Perceived Quality of Life and Self
-
Rated Health
among First
-
Year University of Students', 2004, Social Indicators Research, 68, p. 221
-
234.


Wedel, M. and Kamakura, W. A., Market Segmentation, Kluwer, 1998.


Verbrugge, L. M., 'A Global Disa
bility Indicator', 1997, Journal of Aging Studies, 11, p. 337
-
362.


Woodside, A. G., Wilson, E. J., van der Walt, N. T. and Brodie, R. J., 'Forecasting Consumer
Acceptance of New Products for Multiple Market Segments Using Multiple Methods', 1989,
Advances

in Consumers Research, 16, p. 326
-
331.


Zhang, T., Ramakrishnon, R. and Livny, M., 'BIRCH: An efficient data clustering method for very
large databases', 1996, The ACM SIGMOD Conference on Management of Data, Montreal,
Canada.