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Fords Model T all in Black, Followed a Mass Market

Approach

SEGMENT MARKETING:
-Targeting a group of customers who share a similar set
of needs and wants.

Segments

Niches

Local areas

Individuals

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MAJOR SEGMENTATION VARIABLES FOR

BUSINESS MARKETS
Demographic:
1. Industry: Which industries should we serve?
2. Company size: What size companies should we serve?
3. Location: What geographical areas should we serve?
Operating Variables:
4. Technology: What customer technologies should we
focus on?
5. User or nonuser status: Should we serve heavy users,
medium users, light users, or nonusers?
6. Customer capabilities: Should we serve customers
needing many or few services?

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Purchasing Approaches:
7.
Purchasing-function organization: Should we serve
companies with highly centralized or decentralized
purchasing organizations?
8.
Power structure: Should we serve companies that
are engineering dominated, financially dominated, and
so on?
9.
Nature of existing relationship: Should we serve
companies with which we have strong relationship or
simply go after the most desirable companies?
10. General purchasing policies: Should we serve
companies that prefer leasing? Service contract?
Systems purchases? Sealed bidding?
11. Purchasing criteria: Should we serve companies that
are seeking quality? Service? Price?
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Situational Factors:
12. Urgency: Should we serve companies that need quick and
sudden delivery or service?
13. Specific application: Should we focus on certain
application of our product rather than all applications?
14. Size or order: Should we focus on large or small orders?
Personal Characteristics
15. Buyer-seller similarity: Should we serve companies whose
people and values are similar to ours?
16. Attitude toward risk: Should we serve risk-taking or riskavoiding customers?
17. Loyalty: Should we serve companies that show high
loyalty to their suppliers?
Adapted from Thomas V. Bonoma and Benson P. Shapiro.
Segmenting the Industrial Market (Lexington MA: Lexington Books,
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1983).

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I. Effective Segmentation Criteria:

Measurable: must be able to quantify segment characteristics; the size,

purchasing power & characteristics of the segments can be measured.

Substantial: must be large and profitable enough to serve.

Accessible: must be effectively reached and served.
Differentiable: must have different needs and respond to marketing

efforts differently; the segments are conceptually distinguishable and

respond differently to different marketing-mix elements. Fuel efficiency
and style.
Actionable: effective marketing programs can be formulated for

attracting and serving the segments.

A firm has to evaluate the various segments and decide how many and
which ones to target: a single segment, several segments, a specific
product, a specific market, or the full market. Segmentation must be
done periodically because segments change with time.
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Segment-by-Segment Invasion Plan

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Value Propositions:
- customer-focused value proposition
Perdue Chicken
More tender golden chicken at a moderate premium price

Dominos
A good hot pizza, delivered to your door within 30 minutes of

ordering, at a moderate price

-Relevance, Distinctiveness, Believability, Feasibility,

Communicability, Sustainability of the FEATURE

DEFINING ASSOCIATIONS:
1. Points-of-Difference
2. Points-of-Parity
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Addressing Negatively
Correlated PODs and POPs
-Present separately
-Redefine the relationship

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