We can segment business markets with some of the same variables we use in consumer markets, such as geography, benefits sought, and usage rate, but business markets also use other variables_
1. Industry: Which industries; should we serve?
2. Company: What size companies should we serve?
3. Location: What geographical areas we use?Operating Variables
4. Technology: What customer technologies should we focus on?
5. User of nonuser status: Should we serve heavy users, medium users, light users, or nonusers?
6. Customer capabilities: Should we serve customers needing many of few services?
7. Purchasing- Function Organization: Should we serve companies with highly centralized ordecentralized purchasing organization?
8. Power Structure: Should we serve companies that are engineering dominated, financially dominated and so on?
9. Nature of existing relationship : Should we serve companies with which we have strong relationship or simply go after the most desirable companies?
10. General purchasing policies: Should we serve companies that prefer leasing? Servicecontract? Systems purchases? Sealed budding?
11. Purchasing criteria: Should we serve companies that are seeking quality? Serve? Price?
12. Urgency: Should we serve companies that need quick and sudden delivery or service?
13. Specific application: Should we focus on certain application of our product rather than all applications?
14. Size or order: Should we locus onlarge or small orders?
15. Buyers-sellers similarity: Should we serve companies whose people and values are similar to ours?
16. Attitude toward risk: Should we serve risk-taking or risk-avoiding customers?
17. Loyalty: Should we serve companies that show high loyally to their suppliers?
There are many statistical techniques fordeveloping market segments. Once the firm has identified its market-segment opportunities, it must decide how many and which ones to target. Marketers are increasingly combining several variables in an effort to identify smaller, better-defined, target groups. Thus, a bank may not only identify a group of wealthy retired adults, but within that group distinguish several segment depending on currentincome, assets, savings, and risk preferences. This has led some markets researchers to advocate a needs-based market segmentation approach.
EFFECTIVE SEGMENTATION CRITERIA
To be useful/effective are the segments you have identified:
It has to be possible to determine the values of the variables used for
segmentation with justifiable efforts. This is important especially for thebehavioural and psych-graphic variable so important in social marketing.
The basis for targeting the segmented audience needs to consider ethics and as
be financially justifiable.
The segment has to be accessible and servable by an intervention.
Different audience segments have to be distinguishable and respond differently
to differentintervention mixes. If not, they do not constitute separate
It has to be possible to attract, approach and serve each segment with a
particular mix of methods.
Evaluating and selecting the market segments
In evaluating different market segments, the firm must look at two factors: the segments overall attractiveness and the companys objectives and resources. How welldoes a potential segment score on the criteria? A potential segment must have characteristics that make it generally attractive, such as size, growth, profitability, scale economies, and low risk. Investing in the segment should make sense given the firms objectives, competencies, and resources. Some attractive segments may not mesh with the companys long run objectives, or the company may lack...