How should business markets be segmented

Identifying Market Segments and Targets

How should business markets be segmented?

5Major Segments Of Business Markets

Segment 1

Demographic Based on Industry, Location and Company Size.

Which Industry to serve?

What size company to serve?

What area to serve?

Segment 2

Operating Variables

Based on Technology, User or nonuser status and Customer

capabilities.

Which Technology?

Heavy users?Medium users?Nonusers?

Many or Few services?

Segment 3

Purchasing Approaches

Based on Power structure, Relationship, Purchasing Policies and Criteria,

Purchasing-function organisation.

Segment 4

Situational FactorsUrgency, Specific application, Size

or order.

Should we serve companies that need quick service?

To focus on a certain product rather than all?

Should we focus on size of orders?

Segment 5

Personal Characteristics

Based on • Buyer-seller similarity• Attitude towards risk

• loyalty

Should we serve to companies whose values and people are similar?

Should we serve risk-taking customers? Should we serve companies that show

loyalty to the suppliers?