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16-09-28 PGDM-Trim5-S-02 (Segmentation) - Handout
16-09-28 PGDM-Trim5-S-02 (Segmentation) - Handout
16-09-28 PGDM-Trim5-S-02 (Segmentation) - Handout
Amarnath Krishnaswamy
Segmentation
Focus makes marketing more
effective.
Use strengths more effectively in
the areas of opportunities that have
been identified.
Micro-segmentation
Characteristics of the decision-making units
New task / Rebuy
Transactional buyers
Relationship buyers
Cost / Value
Business 1 Business 2
1. Price sensitivity
2. Required quality
3. Desired benefits
4. Technical requirements
5. Speed of delivery
Examples?
1. Price sensitivity
Buying based on price
Sacrificing benefits and features
Requires that (strategy)
Be price competitive
Sell high volumes
Low profit margin
Examples?
2. Required quality
Buying based on best quality.
Requires that (strategy)
Price not a limiting factor
Low sales volumes
High profit margin
Example?
3. Desired benefits
Buying is value
Common in many industries
Requires that (strategy)
Differentiation based on benefits
Example?
4. Technical requirements
Buying is spec oriented
Product must perform effectively, efficiently and
consistently
Requires that (strategy)
Possibly custom produce
Possibly need high quality equipment, staff
Example?
5. Speed of delivery
Combined with other factors
Comes at a cost
Requires that (strategy)
Possibly standardization
Example?
Conclusion
Knowing the segment that works best will help you
pick and choose the segment to focus on to
maximize your returns
1. Purchasing approach
Classified by
How purchasing function is organized
Centralized vs. Decentralized
Ordering / Payment vs. Ordering & Payment
Example?
2. Purchasing situation
Specific to the businesss needs.
Need can be:
Quicker delivery
Consultation: technical etc
Example?
Example?
Conclusion
Example?
Example?
Example?
Conclusion
Read:
Hutt & Speh: Business Marketing Management
Chapter: The Business Market: Perspectives on the
Organizational Buyer
Chapter: Organizational Buyer Behavior