Segmenting the Business Market Chapter 5 High-Profit Companies  What makes them successful?  Three targets Business Market Segmentation & Benefits  Market segmentation • “A group of present or potential customers with some common characteristic which is relevant in explaining (and predicting) their response to a supplier’s marketing stimuli.”  Percentage breakdowns Business Market Segmentation & Benefits  Five criteria for measuring desirability • Measurability • Accessibility • Substantiality • Compatibility • Responsiveness Business Market Segmentation & Benefits  Competitive Environment • Competitive analysis • Core competencies • New competition  Technical Environment • Three types of technology     Product technology Process technology Management technology Benefits of Segmentation Bases for Segmenting   B2C Segmentation Macrosegmentation • Organizational characteristics   Examples: Dell • Microsegmentation   Characteristics of decision-making units Examples: Macrolevel Bases  Segmentation Methods • Characteristics of Organization     Size Geography Usage rate Structure of purchasing function • Product Service Application  NAICS Macrolevel Bases  Segmentation Methods (cont’d) • Value in use  Definition • Purchasing situation  Example • First-time • Novice • Sophisticates Microlevel Bases  Segmentation Methods • Key criteria   What’s important to customer Example • • • • Programmed Relationship buyers Transaction buyers Bargain hunters • Value-based strategies    Innovation Customer in fast-growing markets Customer in highly-competitive markets Microlevel Bases  Segmentation Methods (cont’d) • Purchasing strategies   • • • • •  Satisficers Optimizers Structure of the decision-making unit Importance of purchase Attitudes toward vendors Organizational innovativeness Personal characteristics Microsegmentation Illustration • Philips Organizational Market Segmentation Model  Macrosegmentation  Microsegmentation  Check on costs and benefits • UPS  Implementation • Questions to ask