Business Market segmentation

BySanchit Aggarwal

Bits Pilani K.K Birla Goa Campus

Importance in B2B(business to business firms)

• It is common for a B2B firm to have substantial investment costs and will often need to implement labour-intensive promotional strategies.

• Example- Aluminium industry

• Personal selling is commonly used in business markets.

• Some complex or expensive products may have a sales lead-time of several years, which means a team of sales people may easily invest 100s of hours in gaining a sale.

Business markets can be segmented on the basis of these five variables:

Demographic Operating

Purchasing Approaches

Situational Factors

Personal characteristics

Approach to business segmentation

1st Stage : Identify Macro segment2nd Stage : Identify Micro segment

Example

• The first variable considered is a business description, which broadly splits the potential market into food service, manufacturing, and supermarkets. food service was then further split by business description (restaurant/café or pizza outlet) and then by operating practice (whether or not they are a franchised operation).

• Manufacturers are further defined by whether they use pizza sauce as a key ingredient (say for frozen pizza) or may use this style of sauce in other products (frozen or microwavable pasta for example). And finally supermarkets were further defined by whether or not they already sell a private label pizza sauce through their stores.

THANK YOU