Marketing Segmentation in Industrial Product
(a) Segmentation bases in industrial product markets
Segmenting an industrial product market introduces a number of additional bases, uses similar bases and also precludes some of the ones more frequently used for consumer product markets. Such bases are:
• Type of application/end use e.g. adhesives for home, office and industrial use. 3
• Geographical e.g. Scotland, Wales, North West, North East, South East, East
Anglia or by country/region.
• Benefits sought: Closely related to the above, but more in terms of what the product actually does for the purchasing company e.g. detergents for general cleaning or detergents that are actually used in the production process.
• Type of customer: e.g. banks or insurance companies or people who purchase for public authorities.
• Product/technology: e.g. fibres for the carpet industry or the clothing industry.
• Customer size: e.g. larger customers might receive different ‘treatment’ to smaller customers and this is called ‘key account selling’ whereby the sales manager deals directly with major accounts.
• Usage rate: e.g. light users or heavy users; regular or sporadic users.
• Loyalty of customer: e.g. regular purchasers of the company’s products (be they for large or small purchases) and sporadic purchasers. Here again, the treatment given to loyal customers might differ to that accorded to occasional customers. • Purchasing procedures: e.g. centralised versus decentralised purchasing (which can affect the buyer/seller relationship); the extent to which purchasing is carried out by tightly defined, or more flexible, specifications which allows the seller more latitude in terms of making suggestions; the extent to which purchasing is by tender (i.e. by some kind of closed bidding system) or by open negotiation. • Situational factors: consider the tactical role of the purchasing circumstances.
In some purchasing situations it may require a more detailed knowledge of the customer whereas in
Segmenting an industrial product market introduces a number of additional bases, uses similar bases and also precludes some of the ones more frequently used for consumer product markets. Such bases are:
• Type of application/end use e.g. adhesives for home, office and industrial use. 3
• Geographical e.g. Scotland, Wales, North West, North East, South East, East
Anglia or by country/region.
• Benefits sought: Closely related to the above, but more in terms of what the product actually does for the purchasing company e.g. detergents for general cleaning or detergents that are actually used in the production process.
• Type of customer: e.g. banks or insurance companies or people who purchase for public authorities.
• Product/technology: e.g. fibres for the carpet industry or the clothing industry.
• Customer size: e.g. larger customers might receive different ‘treatment’ to smaller customers and this is called ‘key account selling’ whereby the sales manager deals directly with major accounts.
• Usage rate: e.g. light users or heavy users; regular or sporadic users.
• Loyalty of customer: e.g. regular purchasers of the company’s products (be they for large or small purchases) and sporadic purchasers. Here again, the treatment given to loyal customers might differ to that accorded to occasional customers. • Purchasing procedures: e.g. centralised versus decentralised purchasing (which can affect the buyer/seller relationship); the extent to which purchasing is carried out by tightly defined, or more flexible, specifications which allows the seller more latitude in terms of making suggestions; the extent to which purchasing is by tender (i.e. by some kind of closed bidding system) or by open negotiation. • Situational factors: consider the tactical role of the purchasing circumstances.
In some purchasing situations it may require a more detailed knowledge of the customer whereas in