Implementation of STP in b2b marketing

Implementation of STP in B2B marketing.

Meghashree Mohan

Implementation of STPD in B2B marketing 2

We can segment business markets with some of the same variables we use in consumer markets such as Geography, Benefits sought ,Usages rate etc but business markets use some other variables also

Source: Marketing management by Kotler, Keller, Koshy, Jha

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Major segmentation variables for business market

Demographics

industry Which industry to focus?

Company size What size of company to serve?

location What geographical area to serve?

Operating variable

technology What customer technology to focus?

User or non user status Heavy users, medium users, light users or no users?

Customer capabilities Should we serve customers needing many or few services?

Purchasing approaches

Purchasing function organization

Should we serve companies with highly centralized or decentralized purchasing power?

Power structure Should we serve companies that are engineering dominated , financially dominated and so on?

Nature of exiting relationship

Should we serve companies with which we have strong relationship or simply go after the most desirable companies?

General purchasing policies

Should we serve companies that prefer leasing, service contract, system purchasing? Sealed bidding?

Purchasing criteria Should we serve companies that seeking quality ? Service ?price ?

Situational Factors

Urgency Should we serve companies that need quick and sudden delivery or service?

Specific application Should we focus on certain application of our products Ruther that all application?

Size or order Should we focus on large or small orders?

Personal characteristics

Buyer seller similarities Should we serve companies whose people and values are similar to us?

Attitude toward risk Should we serve risk taking or risk avoiding customers?

loyalty Should we serve companies that show high loyalty to their suppliers?

Source: Marketing management by Kotler, Keller, Koshy, Jha

Implementation of STPD in B2B marketing 4

DEMOGRAPHY-Which Industry to serve?

Rubber tyre industry

automobile

aircrafts

segmentation

Fork lift trucks

trucks

Farm tractors

Implementation of STPD in B2B marketing 5

Operating values: Size of the firm or Enterprise

Large

Medium

Small

Very small

Size and number of companies

Large orders from large companies

Implementation of STPD in B2B marketing 6

Laboratory apparatus

making industry

Tissue culture laboratories

Fertilizer testing laboratories

Soil testing laboratory

Medical apparatus

Private lab

University labs

Government labs

Private hospitals

Medical collages

Government hospitals Low price & service

More reliable and accurate

Low price & service

More reliable and accurate

Macro segmentation (I)

Micro segmentation(price , service & utility) (II)

Segmentation basis demography and purchasing ability

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Effective segmentation criteria:

I. Measurable: The size, purchasing power are characteristic.

II. Substantial: Large and profitable enough to serve

III. Accessible: effectively reached and served.

IV. Differentiable: conceptually distinguished and respond differently to different marketing mix

V. Actionable: effective program formulated for attracting and serving

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Market targeting

After doing the market segmentation the firm has to evaluate the segment of their market potential. Then the company has to decide which and how many segments to serve and how to serve them.

I. Single segment concentrationII. Selective specializationIII. Product specializationIV. Market specializationV. Full market coverage

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1)Single product in single market.

2)The farm equipment division of MahindraAnd Mahindra concentrated on tractors, andPrimarily targeted agriculture market.

3)The zodiac brand concentrates on formal shirts on executive and professionals.

4)Some hospitals focus on certain therapeutic area, Heart specialty ,gynecology etc

There are certain risk in single segment concentration :a particular market segment can become sour or a competitor may invade the segment.

Evaluating and Selecting The market Segments(i) single segment concentration

M1 M2 M3

P1

P2

P3

Source: Marketing management by Kotler, Keller, Koshy, Jha

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(ii) Selective specialization

M1 M2 M3

P1

P2

P3

1) Specialized product in specialized market.

2) The firm attempts to serve all customer group

Source: Marketing management by Kotler, Keller, Koshy, Jha

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(iii) Product specialization

M1 M2 M3

P1

P2

P3

1)Single product in different markets

2)The firms makes a certain product that it sells to several different market segments

3)E.g. A microscope manufacture , for instance ,sells to university, government and commercial laboratories.

Source: Marketing management by Kotler, Keller, Koshy, Jha

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(iv) Market specializationM1 M2 M3

P1

P2

P3

1)Various products in single market.

2)The firm concentrates on serving many needs of a particular customer group or market.

Source: Marketing management by Kotler, Keller, Koshy, Jha

Implementation of STPD in B2B marketing 13

(v) Full market coverage

M1 M2 M3

P1

P2

P3

1) Different products in different markets.

2) The firm attempts to serve all customer group with all the products they might need.

3) It is possible for only the large firms

4) E.g. a)Reliance :They have wide

range of products in nearly all kind of markets.

Source: Marketing management by Kotler, Keller,

Koshy, Jha

Implementation of STPD in B2B marketing 14

Tyre Market Segmentation

Indian Tyre Industry

Commercial Vehicles

MHCV HCV LCV

Passenger Vehicles

CarsMotorcycles

Scooters

Others

Farm OTR

Industrial

Vehicles

MHCV : Medium Heavy Commercial VehiclesHCV Heavy Commercial VehicleLCV Light Commercial VehicleOTR Off the Road

Market Segmentation for the Tyre Industry is based on the type of vehicle served.

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Bridgestone - Market Specialization

M1 (Cars)

M2 (Trucks)

M3 (2-wheelers)

P1 Touring Tyres

P2 Sport Tyres

P3 Economy Tyres

Bridgestone India has focused on the Passenger Car Segment exclusively as it offers only radial tyres.

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MRF : Compete Market Coverage

M1 (Cars)

M2 (Trucks)

M3 (2-wheelers)

P1 Touring Tyres Economy Tyres High Grip Tyres

P2 Sport Tyres Mileage Tyres Touring Tyres

P3 Economy Tyres Endurance Tyres

Best Fit Tyres

MRF holds a diversified portfolio of products spanning the entire tyre market.

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Positioning

BRIDGESTONE:

Communication : High Performance, Top Quality & International standard.Punch line: Passion for ExcellenceThis communication is substantiated by association to F1 racing

Communication : Superior Endurance, Strength, Sporty & Home-GrownPunch line: Tyres with MuscleSponsors Cricket & Rally racing to position as high endurance and sporty

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Airlines(market 1)

Passenger transport(market 2)

Goods transport(market 3)

Large computers(product 1)

A,B B B

Midsize computers(product 2)

A

Personal computers(product 3)

AC

Company A Company B Company C

Implementation of STPD in B2B marketing

Customer group/markets

Pro

du

ct

vari

eti

es

Segment by segment invasion plans

Source: Marketing management by Kotler, Keller, Koshy, Jha

DIFFERENTIATIONThe process of distinguishing the differences

of a product or offering from others, to make it attractive to a particular target market.

Source of competitive advantage.The objective of diffrentiation is to develop a

position that potential consumers see as unique.

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