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ch 6 b2b

Chapter 6 discusses the significance of business market segmentation in B2B marketing, outlining its benefits such as improved customer understanding and targeted marketing strategies. It details effective segmentation criteria, methods (macro and micro), barriers to segmentation, and various targeting strategies. The chapter concludes with positioning tactics that help create a unique brand image in the marketplace.

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4 views

ch 6 b2b

Chapter 6 discusses the significance of business market segmentation in B2B marketing, outlining its benefits such as improved customer understanding and targeted marketing strategies. It details effective segmentation criteria, methods (macro and micro), barriers to segmentation, and various targeting strategies. The chapter concludes with positioning tactics that help create a unique brand image in the marketplace.

Uploaded by

norannoran34512
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Chapter 6: Business Market Segmentation

Chapter 6

-discusses business market segmentation, its


importance, and various methods used to
segment B2B markets.

-It explains the criteria for effective


segmentation, barriers to segmentation, and
strategies for market targeting and positioning.
6.1 B2B Market Segmentation: Concept and Importance
Definition of Market Segmentation
Market segmentation is the process of dividing a broad market into smaller,
homogeneous groups based on common characteristics.
Importance of B2B Market Segmentation
● Better Understanding of Customers: Helps businesses identify different
customer needs.
● More Effective Marketing Strategies: Allows companies to develop targeted
marketing campaigns.
● Optimized Resource Allocation: Focuses marketing efforts on high-value
customers.
● Competitive Advantage: Helps companies differentiate themselves from
competitors.
● Improved Customer Relationships: Enables personalized communication and
service.
6.2 Effective Segmentation Requirements
For segmentation to be useful, it must meet certain criteria:
1.Measurable – The size and characteristics of the segment must be
quantifiable.
2.Accessible – The segment must be reachable through marketing efforts.
3.Substantial – The segment should be large enough to be profitable.
4.Differentiable – Segments should be distinct from each other in terms of
behavior and needs.
5.Actionable – The company should have the resources and capability to
serve the segment effectively.
6.3 Segmentation Methods in B2B Markets
B2B market segmentation can be done using two main approaches:
6.3.1 Macro Segmentation
Macro segmentation divides the market based on broad factors such as:
1.Industry Type (NAICS/SIC Codes)
● Segments businesses based on their industry classification (e.g., automotive,
healthcare, IT).
2.Company Size
● Large corporations have different needs than small businesses.
● Example: Large enterprises may require enterprise-level solutions, while small
firms may prefer cost-effective solutions.
4.Geographic Segmentation
● Businesses are grouped based on location (e.g., North America, Europe, Asia).
● Useful for companies operating in global markets.
5.Product Usage
● Segments customers based on how they use a product (e.g., heavy users vs.
occasional users).

6.Customer Type
● Commercial organizations (e.g., manufacturers, retailers).
● Government agencies (e.g., defense, healthcare, education).
● Non-profit organizations (e.g., charities, research institutions).
6.3.2 Micro Segmentation
Micro segmentation focuses on specific behavioral and psychological factors that influence buying
decisions.
1. Purchasing Behavior
● Customers are segmented based on their buying process (e.g., price-sensitive buyers vs. quality-
focused buyers).
2. Decision-Making Process
● Some businesses involve multiple decision-makers, while others rely on single individuals.
3. Customer Needs & Preferences
● Businesses may segment customers based on specific needs (e.g., technology-driven buyers vs.
cost-conscious buyers).
4. Customer Loyalty
● Some businesses focus on retaining existing clients, while others prioritize acquiring new
customers.
5. Corporate Culture & Values
● Some companies prefer working with socially responsible suppliers, while others focus on cost
efficiency.
6.4 Barriers to Segmentation
Despite its benefits, market segmentation in B2B can be challenging due to:
1.Lack of Reliable Data – Businesses may struggle to collect accurate customer
information.
2.Complex Decision-Making Process – B2B purchases involve multiple
stakeholders, making segmentation difficult.
3.Overlapping Segments – Some customers may fit into multiple segments,
creating confusion.
4.Changing Market Conditions – Economic, technological, and regulatory
changes can disrupt segmentation strategies.
5.High Implementation Costs – Segmenting markets and customizing marketing
efforts require significant investment.
6.5 Market Targeting
After segmentation, businesses must decide which segments to target based on:
● Market size and growth potential.
● Competitive intensity within the segment.
● Profitability and revenue potential.
Types of Targeting Strategies
1. Undifferentiated Marketing
● A single marketing approach for the entire market.
● Best for standardized products with broad appeal.
2. Differentiated Marketing
● Develops separate marketing strategies for different segments.
● Best for businesses offering multiple product lines.
3. Concentrated Marketing (Niche Marketing)
● Focuses on one specific segment.
● Best for specialized industries (e.g., medical equipment, aerospace technology).
6.6 Positioning in B2B Marketing
Positioning is the process of creating a unique image of a brand in the minds of customers.
6.6.1 Positioning Strategies
1. Product Differentiation
● Highlighting unique product features, quality, or innovation.
● Example: A software company positioning itself as the most secure cloud provider.
2. Service Differentiation
● Offering superior customer service, warranties, or support.
● Example: A logistics company emphasizing on-time delivery guarantees.
3. Price-Based Positioning
● Competing on cost efficiency and affordability.
● Example: A telecom provider offering budget-friendly business plans.
4. Reputation-Based Positioning
● Building credibility through brand reputation, expertise, and trust.
Example: IBM positioning itself as a trusted technology leader
6.7 Positioning Tactics
Once a positioning strategy is chosen, businesses use different tactics to
communicate their value:
1.Brand Messaging & Storytelling – Creating a compelling brand narrative
that resonates with customers.
2.Content Marketing – Using blogs, whitepapers, and case studies to
showcase expertise.
3.Advertising & Promotions – Targeted campaigns through digital, print,
and trade shows.
4.Salesforce & Personal Selling – Training sales teams to communicate
the company’s unique value effectively.
Conclusion
Chapter 6 explains the importance of market segmentation in B2B marketing and how
businesses can identify the right customer groups.
Key Takeaways
● B2B segmentation helps companies focus on the right customers.
● Effective segmentation should be measurable, accessible, substantial, differentiable, and
actionable.
● Macro segmentation is based on industry, company size, and geography, while micro
segmentation considers behavioral factors.
● Market targeting strategies include undifferentiated, differentiated, and niche marketing.
● Positioning involves creating a unique brand perception through product differentiation,
pricing, and customer service.

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