BUS 539 B2B Marketing

Week 4 Strategic B2B Marketing

Class Notes, Dr. Koray ANDIR
koraycandir@yahoo.com

Three Strategic Concepts in B2B Marketing

Segmenting

Targeting

Positioning

Definition of Market

people or organizations with

needs or wants, and with
the ability and
the willingness to buy

A group of people (organizations) that lacks any one of these

characteristics is not a market

Business Markets
The business market comprises all the organizations that
buy goods and services for use in the production of other
products and services that are sold, rented, or supplied to
others.
It also includes retailing and wholesaling firms that acquire
goods for the purpose of reselling or renting them to others
at a profit.

Types of Organizational Customers

Commercial
Enterprises

Government
Units

Industrial
Distributors

State Institutions

Value-Added
Resellers

Municipalities

Original
Equipment
Manufacturers
Wholesalers

Nonprofit and
Not-for-Profit
Organizations
Hospitals,
colleges,
nursing homes,
etc.

Market Segmentation
The process of dividing a market into:
Sub group people or ..organizations
with....one or more similar characteristics
causing .....to have similar product/service
needs

Segmentation Matters

All Customers are created

equal: Some of them are more
equal!

Steps in Segmenting a Market

Select
a
market
for
study

Choose
bases
for
segmentation

Select
descriptors

Profile
and
analyze
segments

Select
target
markets

Design,
implement,
maintain
mkting
mix

Segmentation Criteria - Consumer Markets

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Segmentation Criteria Business Markets

Base Type

Segmentation
Base

Organizational Organizational Size

Characteristics

Explanation
Grouping organizations by their relative size (MNCs, international,
large, SMEs) enables th identification of design, delivery, usage
rates or order size, and other purchasing characteristics.

Geographic Location

In many situations the needs of potential customers in one

geographic area are different from those in another area.

Industry Type
(SIC Codes)

Standard industrial classifications (SIC) are codes used to identify

and categorize all types of industry and businesses.

Buyer
Decision-making Unit
Characteristics Structure (DMU)

The attitudes, policies, and purchasing strategies used by

organizations provide the means by which organizations can be
clustered.

Choice Criteria

The types of product/services bought and the specifications that

companies use when selecting and ordering products
and equipment may also form the basis for clustering customers
and segmenting business markets.

Purchase Situation

This approach segments buyers on the way in which a buying

company structures its purchasing procedures, the type of buying
situation, and whether buyers are in an early or late stage in the
purchase decision process.
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B2B Macro Segmentation Bases

Based on the characteristics of organisations and the broader purchasing

context in which they operate.

Bases for macro segmentations tend to be observable or obtainable from

secondary information.

Can be divided into different organisational characteristics.

B2B Micro Segmentation Bases

Micro segments may exist within a macro segment.

A detailed understanding of individual members of the macro segment needed

(management philosophy, decision making structures, purchasing policies, etc.).

Starting with broad characteristics then developing increasingly fine detail (from
understanding the industry to an organisations operating variables, purchasing
approach, and finally personal characteristics).

Common Micro Segmentation Bases in B2B Markets

Product

Applications

Technology

Purchasing policies

Decision making unit structures

Decision making process

Buyerseller relationship

Segmentation Based on Products

Do people really buy a Porsche for engineering excellence?
Do people really choose an Armani suit because it lasts so
well?

Segmentation Based on Products

Do people really buy a Porsche for engineering excellence?
Do people really choose an Armani suit because it lasts so
well?
Do people, who say they buy their chemicals purely on
price, never require any technical support or urgent
deliveries from time to time?

Three Strategic Concepts in B2B Marketing

Segmenting

Targeting

Positioning

Targeting strategies

Figure 5.3

The undifferentiated targeting strategy

Least demanding targeting strategy.
Assumes that the market is one homogenous unit with no significant
differences.

One single marketing mix serving all needs.

Relatively inexpensive.

The differentiated targeting strategy

Involves the development of a number of different marketing mixes for different
segments.
Allows a business to tailor its offerings to suit different segments.

Spreads risk across market segments.

Requires a detailed overview of the market and its development potential.
Can dilute a companys efforts.

The concentrated targeting strategy

The concentrated approach is the most focused and involves specialising on
serving one specific segment.
Can lead to very detailed knowledge of the target segments needs and wants.

This strategy can help keep costs down as there is only one marketing mix to
manage.
Helps to develop a niche market.

Three Strategic Concepts in B2B Marketing

Segmenting

Targeting

Positioning

Positioning

Positioning is not what you do to a product; it is

what you do to the mind of a prospect.

Ries and Trout (1972)

Common Positioning Strategies

Attribute/Benefit
Price/Quality
Use or application
Product class
Competitor comparison

Positioning Statement
For [target segment], the [concept]
is [most important claim] because
[single most important support].
Example:
For PC users, the IOMEGA Zip drive
is the best portable storage device because
it is most cost-effective system.