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    Recap: - Derived Demand

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    Karishma Gupta
    The document discusses key concepts related to business markets segmentation including: 1) Variables that can be used to segment business markets at the macro and micro level, such as geographic location, industry vertical, customer size, product use, and purchasing strategy. 2) Benefits of segmenting business markets include better matching of customer needs, targeted communication, and better operational efficiency. 3) An effective segmentation identifies groups that are measurable, substantial, differentiable, and actionable.

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    Recap: - Derived Demand

    Uploaded by

    Karishma Gupta
    146 views19 pages
    The document discusses key concepts related to business markets segmentation including: 1) Variables that can be used to segment business markets at the macro and micro level, such as geographic location, industry vertical, customer size, product use, and purchasing strategy. 2) Benefits of segmenting business markets include better matching of customer needs, targeted communication, and better operational efficiency. 3) An effective segmentation identifies groups that are measurable, substantial, differentiable, and actionable.

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    B2B SEGMENTATION.pptx

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    The document discusses key concepts related to business markets segmentation including: 1) Variables that can be used to segment business markets at the macro and micro level, such as geographic location, industry vertical, customer size, product use, and purchasing strategy. 2) Benefits of segmenting business markets include better matching of customer needs, targeted communication, and better operational efficiency. 3) An effective segmentation identifies groups that are measurable, substantial, differentiable, and actionable.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    146 views19 pages

    Recap: - Derived Demand

    Uploaded by

    Karishma Gupta
    The document discusses key concepts related to business markets segmentation including: 1) Variables that can be used to segment business markets at the macro and micro level, such as geographic location, industry vertical, customer size, product use, and purchasing strategy. 2) Benefits of segmenting business markets include better matching of customer needs, targeted communication, and better operational efficiency. 3) An effective segmentation identifies groups that are measurable, substantial, differentiable, and actionable.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 19

    RECAP

    • Derived Demand • Business Purchase • Business Buying

    • Impact on all 4 • Structured


    Ps • Philosophy • Buying Centres
    • Product • Strategy • Conflict
    • Price • Situations • Models
    • Promotion
    • Place • Vendor Evaluation • Levels
    SEGMENTATION
    MARKETING

    • Delivering Customer Value


    DANNY BUYS CHOCOLATES

    Chocolate as a sweet

    Chocolate as anytime snack

    All these can


    Danny Chocolates for family unions Be markets by
    themselves

    Chocolate as a gift

    Chocolate as an after dinner desert


    MANAGEMENT QUESTION
    How do we identify Which groups we
    markets in terms of target so that How many groups
    maximizing returns on promotional are available?
    our investment made in elasticity is high (Segmentation)
    those markets? and ROI is high

    What variables define


    these groups?

    (Segmentation variables)
    SEGMENTATION
    • Who They Are
    – A 24 year old female from Mumbai who works as an engineer in L&T and
    earns Rs. 7.00 lakh per year
    – Demographics

    • What do they Think


    – Mature , satisfied and knowledgeable individual who prefers value for money.
    – Psychographics

    • What do they Do
    – Regular buyer of Colgate who buys Dabur toothpaste during promotion
    – Behavioural
    SEGMENTATIOON BASICS

    WHY
    WHAT
    • Seller is in a better position to spot
    • Group of Customers whose expected
    market opportunities
    reactions to the company’s
    • Can create separate marketing
    marketing efforts would be similar
    programs for different buyers
    during a specified time period.
    • Has a clear idea about the response

    STRATEGIC IMPERATIVES
    SHOULD LEAD TO
    • Pricing
    • Product
    • Target Market Selection
    • Media Selection
    • Niche Market Identification
    • Logistics
    • Product Positioning
    • Sales Organization
    SEGMENTATION BENEFITS

    Opportunity High Customer


    for Growth Retention
    (Niche) (Mktg Prg fit)

    • Better Matching of
    Customer Needs
    • Targeted Communication
    • Better Operational Efficiency

    Better Share of
    Better Share of
    Customer
    Segment
    Wallet
    SEGMENTATION IN B2B

    • Is it the same as in B2C ?

    • What variables define B2B customers


    ?

    • How do we choose customers?


    SEGMENT CHARACTERISTICS
    Philip Kotler Gross, Banting, Meredith & Ford Reeder & Reeder

    Information on variables of interest


    The size, purchasing power and the Information on location and other
    should exist and be obtainable
    characteristics of the segments characteristics of the buyers should
    through primary or secondary
    should be MEASURABLE. be available. (MEASURABLE)
    sources (MEASURABLE)
    The segments are large and
    Segments should be sufficiently Variables should impact on decision
    profitable enough to serve with a
    large and/or should hold potential making for significant customer
    tailored marketing program.
    in the future. (SUBSTANTIAL) groups whose responses to
    (SUBSTANTIAL)
    marketing programs must be
    Supplier should be able to retain old different.(DIFFERENTIABLE)
    The segment can be effectively
    customers and pin point new ones
    reached and served (ACCESSIBLE)
    (ACCESSIBLE)
    Variables should be related to
    The segments should be Segments should have staying differences in customer
    conceptually distinguishable and power and the relationship can be requirements and buying behavior.
    should respond differently to a given established between supplier and They should indicate marketing
    marketing mix. (DIFFERENTIABLE) clients.(STABLE) approaches with respect to
    marketing mix (OPERATIONAL)
    Effective programs can be Degree of similarity between buyer
    formulated to attract and serve the and seller in regard to risk taking,
    markets. (ACTIONABLE) service standards and corporate
    style. (COMPATIBLE)
    SEGMENTATION IN B2B

    EXERCISE : HUDCO VALVES


    SEGMENTING BUSINESS MARKETS
    Geographic

    Macro Level Industry Vertical


    Segmentation
    Customer Size

    Product Use
    Business
    Markets
    Purchasing Strategy

    Purchasing Criteria
    Micro Level
    Segmentation Purchase Importance

    Personal
    Characteristics
    SEGMENTING BUSINESS MARKETS
    Geographic International / National / Zones / State

    Industry Vertical Sectors,

    Small, medium, Large based on


    Customer Size
    Sales, Profits, Manpower etc

    Product Use Heavy User, Medium User, Light User

    Adversarial , Relationship, Centralized, Decentralized, Single Source,


    Purchasing Strategy
    Multiple source
    Quality, Price, Delivery, Warranty, After Sales Service, Supplier
    Purchasing Criteria
    Reputation, Quality certification
    Critical , Not Critical
    Purchase Importance
    High Ticket , Low ticket,

    Personal Characteristics Decision Style & Risk Taking


    BENEFIT SEGMENTATION

    Product Benefit Target Segment

    Butterfly Valve Corrosion Resistant Chemicals (Acids)

    Ball Valves Fire Resistant Petrochemicals

    5 HP motor 7 hp torque Immediate start during winters Canadian oil wells

    Ultrathin Light weight LCD projector Mobility Travelling Salesman for technology
    products

    20 gm bath soap One use & throw Hotels


    SEGMENTATION PROCEDURE

    • Decide suitable Criteria (variables for Segmentation)


    • Macro & Micro Level Variables

    • Evaluate the Segment


    • Size, Potential, Cost, Revenue, Profits

    • Make Allocation Decisions


    • Single or Multiple segments, Sales Force, Channels, etc
    BOTTOMLINE FOR SEGMENTING

    • Homogenous Response (within segment)

    • Heterogeneous Demand Function (across


    segments)
    SOME EXAMPLES
    • Trucks • Electronic Weighing

    • Individual Drivers
    • Laboratory
    • Small Fleet ( 1- 10)
    • Middle Fleet ( 10 – 50)
    • Gems & Jewellery
    • Large Fleet ( 50 & • Retail
    Above) • Health
    • State Road Transport • Industrial
    • Armed Forces
    • Veterinary
    • Exports
    CAUTION

    • Too Many Segments


    – Confusion & Conflict ( within company brands)

    • Too Little Segments


    – Inefficient servicing of customer needs rendering
    segmentation irrelevant

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