Managerial Segmentation of Service Offerings in Work Commuting

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Managerial Segmentation of Service Offerings in Work Commuting


Methodology to efficiently segment markets for public transportation offerings has been introduced and exemplified in an application to an urban travel corridor in which high tech companies predominate. The principal objective has been to introduce and apply multivariate methodology to efficiently identify segments of work commuters and their demographic identifiers. A set of attributes in terms of which service offerings could be defined was derived from background studies and focus groups of work commuters in the county. Adaptive choice conjoint analysis was used to derive the importance weights of these attributes in available service offering to these commuters. A two-stage clustering procedure was then used to explore the grouping of individual’s subsets into homogeneous sub-groups of the sample. These subsets are commonly a basis for differentiation in service offerings that can increase total ridership in public transportation while approximating cost neutrality in service delivery. Recursive partitioning identified interactions between demographic predictors that significantly contributed to the discrimination of segments in demographics. Implementation of the results is discussed.



Steven Silver is a professor in the Lucas Graduate School of Business and College of Business at San José State University. He has earned an MA and MBA from the University of Chicago, a PhD from the Haas School of Business, University of California, Berkeley, and has been a visiting scholar and post-doctoral fellow at the London School of Economics and at Stanford University. Dr. Silver has authored numerous reports and publications in consumer behavior, urban economics and measurement methodology. He has also served on advisory groups and panels for management of the arts and the design of transportation-related programs.

March 2015
Urban work commuting
Multivariate methodology
Market segmentation
Design of service offerings



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