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High-Growth
Companies
Succeed By
•
Selecting a
well-defined
group of
potentially
profitable
customers.
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•
•
Developing a
distinctive
value
proposition.
Focusing
marketing
resources on
acquiring,
developing,
and retaining
profitable
customers.
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Five Criteria for Evaluating Potential
Market Segments
1. Measurability
2. Accessibility
3. Substantiality
4. Compatibility
5. Responsiveness
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Technological Environment Assessment
1. Product technology—the set of ideas embodied in
the product or service.
2. Process technology—the set of ideas or steps
involved in the production of a product or service.
3. Management technology—the management
procedures associated with selling the product.
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Segmentation Benefits
• First, the marketer to become more attuned
to the unique needs of customer segments.
• Second, focus product development efforts,
develop profitable pricing strategies, select
appropriate channels of distribution.
• Third, provides guidelines that are of
significant value in allocating marketing
resources.
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Bases for Segmenting Business Markets
• Macrosegmentation.
• Microsegmentation.
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Selected Macrolevel Bases of Segmentation
• Macrolevel bases of segmentation are concerned with
general characteristics of the buying organization, the
nature of the product application, and the characteristics
of the buying situation.
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Selected Microlevel Bases of Segmentation
The marketer often finds it useful to divide each
macrosegment into smaller microsegments on the
basis of the similarities and differences between
decision-making units.
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Purchasing Strategies Classifications
1. Satisficers approach a given purchasing
requirement by contacting familiar suppliers and
placing the order with the first supplier to satisfy
product and delivery requirements.
2. Optimizers consider numerous suppliers, familiar
and unfamiliar, solicit bids, and examine all
alternative proposals carefully before selecting a
supplier.
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Meaningful Microsegments
 Importance of Purchase -- appropriate when the product is
applied in various ways by various customers.
 Attitudes toward Vendors – an analysis of how various
clusters of buyers view alternative sources of supply often
uncovers opportunities.
 Organizational Innovativeness – some organizations are
more innovative and willing to purchase new industrial
products than others.
 Personal Characteristics – although some interesting
studies have shown the viability of segmentation on the
basis of individual characteristics, further research is
needed to explore its potential as a firm base for
microsegmentation.
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An Approach to
Segmentation of
Business Markets
This figure combines
these macrosegment
bases and outlines and
steps required for effective
segmentation.
Source: Adapted by permission of
the publisher from Yoram Wind
and Richard Cardozo, “Industrial
Market Segmentation,” Industrial
Marketing Management 3 (March
1971): p. 156. Copyright 1974 by
Elsevier Science Publishing Co.,
Inc.
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