Presentation by Narayanan Palani, PGDM (Exec)’2011-12
• Industrial marketers use segmentation asa way to explain results rather than as away to plan• Industrial segmentation can assistcompanies in following areas:• Analysis of the market• Selection of key markets• Management of marketing
• Customer groups and Individualcustomers within these groups may differin• Demographics• Operating differences• Purchasing organization• “culture”• Personal characteristics
1. Demographics2. Operating Variables3. Customer Purchasing Approaches4. Situational Factors5. Personal Characteristics of Buyers*It is possible to skip irrelevant criteria
• Relate to general customer needs andusage patterns• The Industry– Broad understanding of customer needs– Perceptions of purchase situations– Industry is an important basis for• Selling paper, office equipment, business orientedcomputers, financial services
• Company Size– Large companies justify and requirespecialized programs affects marketsegmentation• Customer Location– Decisions related to deployment– Organization of sales staff
• Identification of existing and potentialcustomers within demographic categories.• Operating Variables are stable include– Technology– User/Non user status (by product and brand)– Customer Capabilities (operating, technicaland financial)
• Company Technology:– Manufacturing process– Product– Determining it’s buying needs– The technology used affects companies’requirements for• test gear,• tooling, and components and thus, helps• determine a marketer’s most appropriatemarketing approach.
• Product and Brand-Use status:– Industrial Sales Managers followTwo step process:• First they seek to gain an initial order on trial• They seek to increase the share of majorcustomer’s business than to generating newaccounts
• Customer Capabilities:– Company operating with tight materialsinventories would greatly appreciate asupplier with reliable delivery record– Technically weak customers in the chemicalindustry have traditionally depended onsuppliers for formulation assistance andtechnical support– Technical strength also differentiatecustomers
• Purchasing Function Organization:– Determines the size and operation of acompany’s purchasing unit– Centralized approach (merge individualpurchasing units to single group)– Decentralized approach (field oriented salesforce)
• Power Structures: Influence of onedepartment over the other• Buyer Seller Relationships• General Purchasing Policies• Purchasing Criteria
• Urgency of order fulfillment• Product Application• Size of Order– An urgent replacement is generally purchasedon the basis of availability, not price
• Some buyers are risk averse• Buyers who are risk averse are not goodprospects for new products and concepts• Data on personal characteristics areexpensive and difficult to gather
• Marketers are interested in purchase decisionthat depend on company variables• Industrial marketing executive can choosefrom following outcomes• No segmentation• After the fact segmentation• Superficial segmentation• Obtuse, convoluted and disorganizedsegmentation
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