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Segmenting Business Markets

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Segmenting Business Markets
LESSON 3: B2B MARKETING - PART 2 - Segmenting Business Markets

In this lesson, we will discuss concepts and applications related to Business to Business (B2B) market segmentation. Market segmentation involves breaking down a large heterogeneous market into smaller homogeneous markets. Separate marketing programs – the marketing mix - can then be developed to meet the needs of each segment. Concentration of marketing solutions is the key component of all marketing plans, and market segmentation is the tool that allows marketers to achieve this focus.

LESSON OUTCOMES
By the end of this lesson you should be able to: 1. Describe the bases for segmenting business markets 2. Discuss alternative strategies for selecting target markets

* LESSON CONTENT
SUBTOPICS:
1. Segmenting Business Markets 2. Market Strategies for Business 3. Product Positioning

SUBTOPIC 1. Segmenting Business Markets
You’ll recall from Lesson 2 that essentially markets are segmented for three reasons: First, to enable the identification of groups of customers with similar needs, and the analysis of their buying behavior. Secondly, segmentation provides information for the specific matching of the design to marketing mixes with the characteristics of the segment. Segmentation also helps marketers to satisfy customers while meeting their organization’s objectives.

A segmentation base is a characteristic or variable of individuals, groups, or organizations that is used to divide a total market into segments. Markets can be segmented using a single or multiple variables.

The five bases of segmentation commonly used in the B2C marketplace we learned are: 1. Geographic is based on region, size, density, and climate characteristics. 2. Demographic is based on age, gender, income level, ethnicity, and family life-cycle characteristics. 3. Psychographic includes personality, motives, and lifestyle characteristics. 4.
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