Questions on Administrative services, Compliant Handling System, Relations with the vendors sales

staff, quality of delivery, Availability of technical services, After sales service, response time,
suggestions for choosing suitable eqipments, will arrange delivery of equipment, helps the
customer for any civil work, product instruction, training for operating the
equipments, caliberation of equipments, warranty- its coverage, period of
coverage, terms and conditions, support staff knowledge, recommending to
others,

Once your new garage equipment has been installed, whether this is
an emissions analyser, brake tester or a full blown MOT bay, Crypton
will continue to provide ongoing customer support to keep your
equipment running smoothly and help maximise its operational life.

Our ATL Packages, Combined Emissions Analyser and Service Lift

range all include a 3 year parts and labour warranty (UK mainland
only) as standard for complete peace of mind. Our dedicated support
team are available to offer technical advice and deal with any issues
you have. Our online live chat located at the bottom of our website
means you can talk to our team instantly for quick advice, as well as
diagnose and solve problems there and then (if possible).

We have our own nationwide team of GEA accredited service

engineers and UKAS accredited engineers for carrying out Gas and
Smoke calibrations, who all carry a range of spare parts to ensure
downtime is kept to a minimum.

See our terms and conditions here.

At Crypton, we understand that choosing the correct equipment for your

workshop is a daunting task. From planning, equipment selection to installation,
our goal is to support you with a first class and no fuss service, so you can
concentrate on your business.

Here is what you can expect:

Site Survey - Crypton will provide you with a project manager to visit and
measure your workshop and discuss your requirements to advise the best
suitable equipment for you, whilst keeping MOT specifications, efficient use of
space, health and safety issues and personal preferences in mind.

Site Drawings - Our skilled in-house designers will produce detailed CAD
drawings of your workshop proposal to give you the best outlook of what your
equipment would look like in your workshop.

DVSA Application Your project manager will assist you through the application
process. Our CAD drawings are also produced to meet DVSA specifications to
support your application and obtain an Agreement in Principle (AIP).

Installation Your project manager will arrange delivery of your equipment, as

well as the builders for any civil work that needs doing and our Garage
Equipment Association (GEA) accredited engineers to do the installation.

Product Instructions Once installed, an MOT tester will be available to show

you how to use your new Crypton equipment onsite. Once youre up and running,
well continue to provide you with ongoing product support to keep your
equipment running smoothly and maximise its operational life.

Once youre up and running, well continue to provide you with ongoing product
support to keep your equipment running smoothly and maximise its operational
life.

Questions on Administrative services, Compliant Handling System, Relations with the vendors sales
staff, quality of delivery, Availability of technical services, After sales service, response time,
suggestions for choosing suitable eqipments, will arrange delivery of equipment, helps the
customer for any civil work, product instruction, training for operating the
equipments, dia
CAILBRATION

All calibration agreements are for 12 months unless otherwise

specified and cover the minimum of legislative requirements to ensure
the safe, reliability and efficient performance of your equipment and
your own peace of mind.

One of our experienced engineers or service partners will travel to

your premises where they will carry out calibration procedures on your
equipment.

Emissions calibrations will be undertaken by a UKAS accredited

engineer and a certificate issued from a UKAS Lab.

Our agreements include consumable items required by the engineer to

calibrate the equipment (some exclusions apply).

Our agreements are only available on the UK Mainland.

Please contact our support team on 0844 665 7610 or via our live chat
located at the bottom of our website for more information.
 MORE INFORMATION?

After Sales Product Support

Planning & Installation

Warranty

WARRANTY

Garages require efficient, reliable and quality equipment to meet the

requirements and demands of todays garage market. With Cryptons
 standard 3 year warranty, you can be rest assured our garage
equipment will provide you with a competitive edge to offer your
customers the best service in the best environment possible and in the
least amount of time.

The following equipment includes our class leading 3 year parts and
labour breakdown warranty as standard (UK mainland only):

ATL Packages >>>>

Emissions Analyser >>>>

2-Post Lift >>>>

Midrise Scissor Lift >>>>

For complete peace of mind, our 3 and 5 Year Extended Care Packages
guarantees a hassle free service.

Parts and labour breakdown Protection from mechanical or electrical

breakdown. Our manufacturer trained engineers carry out repairs using
original parts.
Calibrations where applicable Well arrange your equipment to be
calibrated by the original manufacturer on time, every time to ensure it
remains legally running to meet DVSA requirements.

Routine consumables used at time of calibration During calibration,

your equipment will be checked for any faults or repair work that is needed,
saving you any costly repair work in the future.

MOT data updates As it is part of our extended care, there is no need

to organize or budget, saving you over 1,000+. We will send you the latest
MOT updates as theyre released by DVSA to ensure your equipment
remains legally up-to-date.

MORE INFORMATION?

After Sales Product Support

Planning & Installation
Warranty and Conditions of
Trading
Limited Warranty for Crypton products and accessories (singularly or collectively
the Product or Products).

1. Warranty Cover
This warranty is for defects due to faulty material or bad workmanship in all
Products manufactured, sold or certified by Crypton and with which this limited
warranty is included in/ on the package, subject to the following exceptions and
exclusions:-

Consumables, filters, oxygen sensors, printer paper, printer cartridges, keyboard,

mouse, infrared & BT dongles, cables, batteries, oil probes, temp probe, RPM
clamps/ probes, hoses, sample probes are excluded.

Batteries. This warranty does not extend to batteries, except rechargeable

batteries which are ONLY covered during the initial thirty (30) day 'start up
period'.

Software Exception. This warranty extends only to physical defects in the media
(such as CD-ROM) that tangibly embodies each copy of any software sold or
licensed and/or certified by Crypton for use with its Products. All other
warranties in respect of software are excluded to the fullest extent permitted by
law.

2. Period of Cover
Subject to the following exceptions, Products are covered under this warranty for
twelve (12) calendar months from the date purchased by the Customer:

90-Day Warranty Exception. The warranty is for 90 days only for: (a) all external
cables or connectors* not physically mounted to the Product or (b) any external
sensors (such as current clamps or RPM pick ups)

Extended Product Warranty Exception. Certain Products (identified in the price

list) are guaranteed for longer periods from the date they are purchased by the
Customer.
One (1) Year Warranty Exception. The warranty period is for one (1) year for all
printers.

Repair / Replacement Exception. The residual warranty period on warranty

repaired or replaced Products is for either; the balance of the original warranty
period or for 90 days from the date returned and delivered to the Customer,
whichever is the longer.

We give no guarantee in respect of any proprietary electrical or other equipment

made by other manufacturers, and supplied with our Products but will so far as is
possible, transfer the benefit of any guarantee, if any, given by such other
manufacturers.

3. Coverage
This warranty is only for the benefit of the first end user purchaser (the
Customer) and is not transferable under any circumstance.

4. Correction of Warranty Problems

Crypton Customer Support must be notified immediately about any Product
which is alleged to be defective, whereupon we shall either issue instructions to
return the Product to our factory for examination or where applicable, make
alternative arrangements. For valid Product warranty claims we have the option
to repair or replace the affected Products at no charge to you except for the
return to base postage or courier costs. We may use functionally equivalent
reconditioned/refurbished/pre-owned or new Products or parts. No software
updates are automatically provided as a consequence of a warranty repair or
replacement.

5. This Warranty is invalidated by:

Products that are operated in combination with ancillary or peripheral equipment
or software not furnished with the Products. This includes batteries, chargers,
adaptors, power supplies or third party software loaded to the system.

Products that have failed to be maintained in accordance to the Crypton

maintenance guide as described in the user manual or if applicable, where
someone other than an Crypton engineer (or authorised service personnel) tests,
adjusts, installs, maintains, alters, modifies or services the Products in any way.

Products that have: (a) serial or date tags that have been removed altered or
obliterated; (b) board serial numbers that do not match the housing; or (c)
nonconforming housing or parts.
Defects or damage resulting from: (a) use of the Products in a manner that is not
normal; (b) improper operation or misuse; (c) accident or neglect such as
dropping the unit onto hard surface; (d) contact with water, rain, or extreme
humidity or extreme heat.

6. This Warranty excludes

Physical damage to the surface of the Products, including scratches, cracks or
other damage to the display screen or other externally exposed parts. Cables
and pins that have been broken, bent or subject to excessive stress or wear.

IMPORTANT LIABILITY EXCLUSION

Crypton are under no circumstances liable for any consequential, economic or
other indirect loss or damage arising through any defect in the Products.

* For more information on warranty coverage contact Product Support on +44 (0)
844 665 7610 or Email: support@cryptontechnology.com

The following terms and conditions shall apply to all orders placed with and
accepted by Crypton (hereinafter called 'Crypton') by any customer (hereinafter
called 'the Customer') to the exclusion of all and any other presented or
purported terms belonging to the Customer, or whether pursuant to any estimate
or otherwise and without any variation or addition save as is hereinafter
expressly provided or as set out in writing and endorsed by the signatures of
Crypton and the Customer.

1. All contracts made between Crypton and the Customer shall be deemed to
be made in England and shall be construed in accordance with English
Law.
2. Where a credit facility is given to the Customer, invoices must be paid
according to the agreed payment terms. No discount may be taken for
cash or accelerated payment or for any other reason including set off,
unless expressly agreed in writing between the parties. Crypton reserves
the right at their sole discretion to cancel or amend credit terms to any
Customer with immediate effect and without giving a reason.

3. Without prejudice to other remedies, Crypton reserves the right to recover

from the Customer any legal costs incurred in the proper pursuit of monies
owed by the Customer to Crypton and to charge interest in line with the
Late Payment of Commercial Debt Act. Title in the Products supplied will
only pass to the Customer when the Customer has paid all that is owing to
Crypton under the relevant contract of sale and until that time the
Customer shall store the Products in such manner as to make them clearly
identifiable as Crypton's property, insure them and take all necessary
 precautions to keep them safe from theft loss or damage. The Customer
will hold such Products as bailee and will protect Crypton's title to the
Products against claims by third parties. Should the Customer pass the
Products on or incorporate them into other goods Crypton shall have a lien
on the said goods or such proportion of the goods as is represented by the
value of the Products until the Customer's debt to Crypton is fully
discharged. A like lien shall apply to any Products supplied by Crypton to
the Customer for which the Customer has not made payment in full.

4. Crypton undertakes to repair, or, at Crypton's option, to replace, or to

refund the purchase price of defective Products supplied by Crypton,
provided that written notice of the defect is received within the specified
warranty period of the Products. The return of Products to Crypton shall be
the responsibility and at the cost of the Customer. Other than the
foregoing guarantee, no liability will be accepted by Crypton for any
damage or loss, consequential or otherwise, due to the supply, offer to
supply or failure to supply any of the Products or services or failure to
advise or ensure the fitness for the purpose of any Products or service or
information that shall be provided by Crypton, or the use or misuse of such
by the Customer. The foregoing guarantee shall be void in the event, that
any of the warranty conditions are not satisfied.

5. Carriage and any export/import charges where applicable, are chargeable

except where stated in the price list or agreed in writing. Where carriage
or other shipping fees are chargeable the cost is added to the invoice
value. Otherwise, all prices quoted are ex works and exclusive of carriage,
packing, insurance charges and value added tax. Responsibility for
insuring Products purchased rests with the Customer from the point at
which Products leave Crypton premises unless otherwise agreed in
writing. At the Customer's request, Crypton will insure Products in transit
and invoice the Customer for the cost of such insurance. Damages or
shortages to a consignment must be signed for as such on the relevant
delivery documentation and a claim made on the carriers in writing within
three days of delivery. Where Crypton vehicles are used, the driver must be
notified at the time of delivery and the consignment note marked to
indicate the damage or shortages. The practice of signing for the Products
unexamined does not absolve the Customer from this condition. The
Customer is responsible for unloading at the delivery destination.

6. Goods consigned to the order of end-users and/or distributors render them

liable for all carriage and handling charges incurred, if delivery of Products
is refused on arrival at specified destination.

7. Crypton reserves the right to amend prices without notice and the prices
invoiced will be those ruling at the date of supply.

8. The Customer shall not be entitled to cancel the contract or the further
performances thereof, save with the prior written consent of Crypton.
 Then upon such terms as Crypton may require by way of indemnity or
compensation for any loss, (including loss of profit) damage, cost or
expense which Crypton may have suffered or incurred by reason for such
cancellation and for any cost or expense which Crypton may have incurred
prior to such cancellation or in the anticipated performance of the
contract.

9. All specifications, measurements, brochures and references to power and

performance of the Products the subject of this contract are
approximations or estimates for guidance only and may be varied by
Crypton at any time without notice.

10. Delivery dates, where given, are Crypton's estimates only and unless
otherwise provided Crypton shall incur no penalty due to failure to supply
on the estimated date, or at all.

11. Orders and Contracts between Crypton and the Customer shall be treated
in confidence. The Customer shall safeguard the intellectual property
rights of Crypton in all drawings, writing, computer programs and other
materials of Crypton. All software or firmware supplied under licence to
the Customer whether or not contained within semiconductor devices or
equipment, is the intellectual property of Crypton or it's suppliers and the
Customer shall not copy, reproduce or pass it on to any third party without
the express written consent of Crypton.

12. The Customer is responsible for the site preparation, where necessary,
together with the provision of any supplies and services that may be
required. The specifications and the responsibilities of agents, distributors
and end users are clearly set forth in separate leaflets available on the
various Products concerned. If failure to fulfill this responsibility extends
the time taken to commission Products or results in the need for extra site
visits by engineers the Customer is fully liable for any and all extra cost. If
installation of Products is unduly delayed, Crypton reserves the right to
pass on cost inflation as a supplementary charge.

13. In addition to the price agreed between Crypton and the Customer, the
Customer shall pay any additional or increased cost or expense incurred
by Crypton by reason of any suspension or delay in manufacture or delivery
of the goods caused by inadequate or defective instructions given or
supplied by the Customer, any variations requested by the Customer or any
act, omission or default of the Customer.

14. Crypton may, without liability, cancel the contract and all further
performance thereof (without prejudice to any other right or remedy of
Crypton under the Contract) where the Customer is in breach of any of its
obligations under the Contract and has failed to remedy the breach
following receipt of reasonable notice (being not less than seven days)
 specifying the nature of the breach and the timescale of the required
remedy.

15. Crypton reserves the right to amend or waive any or all of these conditions
without affecting any other condition and without notice other than when
new conditions are imposed on an existing Contract.

16. The Company reserves the right to introduce improvements in design or

specification without prior notice.

17. E & O E.

TESTIMONIALS

"Chris at Diagnostics 2000 recommended we used Crypton due to the

limited size of space and need for a strong and sturdy 2-Post lift for our
busy workshop. The installation went very smoothly. The engineer
made a neat and tidy job of the installation and was very
knowledgeable in answering any of our questions with ease. After
using our new lift for almost a week now, we are finding the quality is
very good. It operates quietly and smoothly and even with a large sized
vehicle on, there is very little movement of the vehicle whilst it's being
worked on. We would consider buying Crypton again."

Damien Purves at Lloyd Motor Group.

Distributed by: Chris Fiddes at Diagnostics 2000

"Our new Crypton emissions unit was delivered and installed on the
same day. Super service!"

James Friel at VOLKS-WAYS.

Distributed by: GSF, Glasgow.

"Crypton's mid-rise scissor is a total workhorse for bodyshops, tyres,

brakes, servicing, timing belt replacement and even coil spring jobs."
SMS Alloa.

"I feel Crypton is a quality brand with a good reputation for its
products and service. One year on, our MOT equipment still looks good
as new and the after sales service from Crypton has been very good. I
would recommend them."

Patrick Jones at Ayr Audi Volkswagen Service Centre.

Industrial marketers can hardly be blamed for feeling that segmentation is
very difficult for them. Not only has little been written on the subject as it
affects industrial markets, but such analysis is also more complex than for
consumer markets. The problem is to identify the best variables for
segmenting industrial markets. The authors present here a nested
approach to industrial market segmentation. Separated according to the
amount of investigation required to identify and evaluate different criteria,
the layers are arranged to begin with demographics as the area easiest to
assess. Then come increasingly complex criteria, including company
variables, situational factors, and personal characteristics. The authors warn,
however, that a nested approach cannot be applied in cookbook fashion but
rather must be adapted to individual situations and circumstances.

As difficult as segmenting consumer markets is, it is much simpler and easier

than segmenting industrial markets. Often the same industrial products have
multiple applications; likewise, several different products can be used in the
same application. Customers differ greatly, and it is hard to discern which
differences are important and which are trivial for developing a marketing
strategy.

Little research has been done on industrial market segmentation. None of

the ten articles in the Journal of Marketing Researchs special August 1978
section, Market Segmentation Research, for instance, dealt with industrial
market segmentation in more than a passing manner. Our research indicates
that most industrial marketers use segmentation as a way to explain results
rather than as a way to plan.

In fact, industrial segmentation can assist companies in several areas:

Analysis of the marketbetter understanding of the total marketplace,

including how and why customers buy.
Selection of key marketsrational choice of market segments that best fit
the companys capabilities.
Management of marketingthe development of strategies, plans, and
programs to profitably meet the needs of different market segments and to
give the company a distinct competitive advantage.

In this article, we integrate and build on previous schemes for segmenting

industrial markets and offer a new approach that enables not only the simple
grouping of customers and prospects, but also the more complex grouping of
purchase situations, events, and personalities. It thus serves as an important
new analytical tool.

Consider the dilemma of one skilled and able industrial marketer who
observed recently: I cant see any basis on which to segment my market.
We have 15% of the market for our type of plastics fabrication equipment.
There are 11 competitors who serve a large and diverse set of customers,
but there is no unifying theme to our customer set or to anyone elses.

His frustration is understandable, but he should not give up, for at least he
knows that 15% of the market purchases one product, and that knowledge,
in itself, is a basis for segmentation. Segments exist, even when the only
apparent basis for differentiation is brand choice.

At other times, a marketer may be baffled by a profusion of segmentation

criteria. Customer groups and even individual customers within these groups
may differ in demographics (including industry and company size), operating
differences (production technology is an example), purchasing organization,
culture, and personal characteristics. Usually, a marketer can group
customers, prospects, and purchase situations in different ways depending
on the variables used to segment the market. The problem is to identify
relevant segmentation bases.

We have identified five general segmentation criteria (see Exhibit 1), which
we have arranged as a nested hierarchylike a set of boxes that fit one into
the other. Moving from the outer nest toward the inner, these criteria are:
demographics, operating variables, customer purchasing approaches,
situational factors, and personal characteristics of the buyers.

Exhibit 1 Nested Approach

Exhibit 1 shows how the criteria relate to one another as nests. The
segmentation criteria of the largest, outermost nest are demographics
general, easily observable characteristics about industries and companies;
those of the smallest, innermost nest are personal characteristicsspecific,
subtle, hard-to-assess traits. The marketer moves from the more general,
easily observable segmentation characteristics to the more specific, subtle
ones. This approach will become clearer as we explain each criterion.

We should note at this point that it may not be necessary or even desirable
for every industrial marketer to use every stage of the nested approach for
every product. Although it is possible to skip irrelevant criteria, it is important
that the marketer completely understand the approach before deciding on
omissions and shortcuts.

Demographics

The outermost nest contains the most general segmentation criteria,

demographics. These variables give abroad description of the company and
relate to general customer needs and usage patterns. They can be
determined without visiting the customer and include industry, company
size, and customer location.

The Industry.

Knowledge of the industry affords a broad understanding of customer needs

and perceptions of purchase situations. Some companies, such as those
selling paper, office equipment, business-oriented computers, and financial
services, market to a wide range of industries. For these, industry is an
important basis for market segmentation. Hospitals, for example, share some
computer needs and yet differ markedly as a customer group from retail
stores.

Marketers may wish to subdivide individual industries. For example, although

financial services are in a sense a single industry, commercial banks,
insurance companies, stock brokerage houses, and savings and loan
associations all differ dramatically. Their differences in terms of product and
service needs, such as specialized peripherals and terminals, data handling,
and software requirements, make a more detailed segmentation scheme
necessary to sell computers to the financial services market.

Company Size.

The fact that large companies justify and require specialized programs
affects market segmentation. It may be, for example, that a smaller supplier
of industrial chemicals, after segmenting its prospective customers on the
basis of company size, will choose not to approach large companies whose
volume requirements exceed its own production capacity.

Customer Location.

The third demographic factor, location, is an important variable in decisions

related to deployment and organization of sales staff. A manufacturer of
heavy-duty pumps for the petrochemical industry, for example, would want
to provide good coverage in the Gulf Coast, where customers are
concentrated, while putting little effort into New England. Customer location
is especially important when proximity is a requirement for doing business,
as in marketing products of low value-per-unit-weight or volume (such as
corrugated boxes or prestressed concrete), or in situations where personal
service is essential (as in job shop printing).

As noted, a marketer can determine all of these demographic variables

easily. Industry-oriented and general directories are useful in developing lists
of customers in terms of industry, size, and location. Government statistics,
reports by market research companies, and industry and trade association
publications provide a great deal of demographic data.

Many companies base their industrial marketing segmentation approach on

demographic data alone. But while demographics are useful and easily
obtained, they do not exhaust the possibilities of segmentation. They are
often only a beginning.

Operating Variables

The second segmentation nest contains a variety of segmentation criteria

called operating variables. Most of these enable more precise identification
of existing and potential customers within demographic categories.
Operating variables are generally stable and include technology,
user/nonuser status (by product and brand), and customer capabilities
(operating, technical, and financial).

Company Technology.

A companys technology, involving either its manufacturing process or its

product, goes a long way toward determining its buying needs. Soda ash, for
example, can be produced by two methods that require different capital
equipment and supplies. The production of Japanese color televisions is
highly automated and uses a few large, integrated circuits. In the United
States, on the other hand, color TV production once involved many discrete
components, manual assembly, and fine tuning. In Europe, production
techniques made use of a hybrid of integrated circuits and discrete
components. The technology used affects companies requirements for test
gear, tooling, and components and, thus, helps determine a marketers most
appropriate marketing approach.

Product and Brand-Use Status.

One of the easiest ways, and in some situations the only obvious way, to
segment a market is by product and brand use. Users of a particular product
or brand generally have some characteristics in common; at the very least,
they have a common experience with a product or brand.

Manufacturers who replace metal gears with nylon gears in capital

equipment probably share perception so frisk, manufacturing process or cost
structure, or marketing strategy. They probably have experienced similar
sales presentations. Having used nylon gears, they share common
experiences including, perhaps, similar changes in manufacturing
approaches.

One supplier of nylon gears might argue that companies that have already
committed themselves to replace metal gears with nylon gears are better
customer prospects than those that have not yet done so, since it is usually
easier to generate demand for a new brand than for a new product. But
another supplier might reason that manufacturers that have not yet shifted
to nylon are better prospects because they have not experienced its benefits
and have not developed a working relationship with a supplier. A third
marketer might choose to approach both users and nonusers with different
strategies.

Current customers are a different segment from prospective customers using

a similar product purchased elsewhere. Current customers are familiar with a
companys product and service, and company managers know something
about customer needs and purchasing approaches. Some companies
marketing approaches focus on increasing sales volume from existing
custom-ers, either by customer growth or by gaining a larger share of the
customers business, rather than on additional sales volume from new
customers. In these cases, industrial sales managers often follow a two-step
process: first they seek to gain an initial order on trial, and then they seek to
increase the share of the customers purchases. Banks are often more
committed to raising the share of major customers business than to
generating new accounts.

Sometimes it is useful to segment customers not only on the basis of

whether they buy from the company or from its competitors, but also, in the
latter case, on the identity of competitors. This in formation can be useful in
several ways. Sellers may find it easier to lure customers from competitors
that are weak in certain respects. When Bethlehem Steel opened its state-of-
the-art Burns Harbor plant in the Chicago area, for example, it went after the
customers of one local competitor known to offer poor quality.

Customer Capabilities.

Marketers might find companies with known operating, technical, or financial

strengths and weaknesses to be an attractive market. For example,
accompany operating with tight materials inventories would greatly
appreciate a supplier with are liable delivery record. And customers unable
to perform quality-control tests on incoming materials might be willing to pay
for supplier quality checks. Some raw materials suppliers might choose to
develop a thriving business among less sophisticated companies, for which
lower-than-usual average discounts well compensate added services.

Technically weak customers in the chemical industry have traditionally

depended on suppliers for formulation assistance and technical support.
Some suppliers have been astute in identifying customers needing such
support and in providing it in a highly effective manner.

Technical strength can also differentiate customers. Digital Equipment

Corporation for many years specialized in selling its minicomputers to
customers able to develop their own software, and Prime Computer sold
computer systems to business users who did not need the intensive support
and hand holding offered by IBM and other manufacturers. Both companies
used segmentation for market selection.

Many operating variables are easily researched. In a quick drive around a

soda ash plant, for example, a vendor might be able to identify the type of
technology being used. Data on financial strength is at least partially
available from credit-rating services. Customer personnel may provide other
data, such as the name of current suppliers; reverse engineering(tearing
down or disassembly) of a product may yield information on the type and
even the producers of components, as may merely noting the names on
delivery trucks entering the prospects premises.

Purchasing Approaches

One of the most neglected but valuable methods of segmenting an industrial

market involves consumers purchasing approaches and company
philosophy. The factors in this middle segmentation nest include the formal
organization of the purchasing function, the power structures, the nature of
buyer-seller relationships, the general purchasing policies, and the
purchasing criteria.
Purchasing Function Organization.

The organization of the purchasing function to some extent determines the

size and operation of a companys purchasing unit. A centralized approach
may merge individual purchasing units into a single group, and vendors with
decentralized manufacturing operations may find it difficult to meet
centralized buying patterns.1To meet these different needs, some suppliers
handle sales to centralized purchasers through so-called national account
programs and those to companies with a decentralized approach through
field-oriented sales forces.

Power Structures.

These also vary widely among customers. The impact of influential

organizational units varies and often affects purchasing approaches. The
powerful financial analysis units at General Motors and Ford may, for
example, have made these companies unusually price-oriented in their
purchasing decisions. Or a company may have a powerful engineering
department that strongly influences purchases; a supplier with strong
technical skills would suit such a customer. A vendor might find it useful to
adapt its marketing program to customer strengths, using one approach for
customers with strong engineering operations and another for customers
lacking these.

Buyer-Seller Relationships.

A supplier probably has stronger ties with some customers than with others.
The link may be clearly stated. A lawyer, commercial banker, or investment
banker, for example, might define as an unattractive market segment all
companies having as a board member the representative of a competitor.

General Purchasing Policies.

A financially strong company that offers a lease program might want to

identify prospective customers who prefer to lease capital equipment or who
have meticulous asset management. When AT&T could lease but not sell
equipment, this was an important segmentation criterion for it. Customers
may prefer to do business with long-established companies or with small
independent companies, or may have particularly potent affirmative action
purchasing programs (minority-owned businesses were attracted by
Polaroids widely publicized social conscience program, for example). Or they
may prefer to buy systems rather than individual components.

A prospective customers approach to the purchasing process is important.

Some purchasers require an agreement based on supplier cost, particularly
the auto companies, the U.S. government, and the three large general
merchandise chainsSears, Roebuck; Montgomery Ward; and J.C. Penney.
Other purchasers negotiate from a market-based price, and some use bids.
Bidding is an important method for obtaining government and quasi-
government business, but because it emphasizes price, bidding tends to
favor suppliers that, perhaps because of a cost advantage, prefer to compete
on price. Some vendors might view purchasers who choose suppliers via
bidding as desirable, while others might avoid them.

Purchasing Criteria.

The power structure, the nature of buyer-seller relationships, and general

purchasing policies all affect purchasing criteria. Benefit segmentation in the
consumer goods market is the process of segmenting a market in terms of
the reasons why customers buy. It is, in fact, the most insightful form of
consumer goods segmentation because it deals directly with customer
needs. In the industrial market, consideration of the criteria used to make
purchases and the application for these purchases, which we consider later,
approximate the benefit segmentation approach.

Situational Factors

Up to this point we have focused on the grouping of customer companies.

Now we consider the role of the purchase situation, even single-line entries
on the order form.

Situational factors resemble operating variables but are temporary and

require a more detailed knowledge of the customer. They include the
urgency of order fulfillment, product application, and the size of order.

Urgency of Order Fulfillment.

It is worthwhile to differentiate between products to be used in routine

replacement or for building a new plant and those for emergency
replacement of existing parts. Some companies have found a degree of
urgency useful for market selection and for developing a focused marketing-
manufacturing approach leading to a hot-order shopa factory that can
supply small, urgent orders quickly.

A supplier of large-size, heavy-duty stainless steel pipe fittings, for example,

defined its primary market as fast-order replacements. A chemical plant or
paper mill needing to replace a fitting quickly is often willing to pay a
premium price for a vendors application engineering, for flexible
manufacturing capacity, and for installation skills that would be unnecessary
with routine replacement parts.
Product Application.

The requirements for a 5-horsepower motor used in intermittent service in a

refinery will differ from those of a 5-horsepower motor in continuous use.
Requirements for an intermittent-service motor will vary depending on
whether its reliability is critical to the operation or safety of the refinery.
Product application can have a major impact on the purchase process and
purchase criteria and thus on the choice of vendor.

Size of Order.

Market selection can begin with the individual line entries on the order form.
A company with highly automated equipment might segment the market so
that it can concentrate only on items with large unit volumes. A non
automated company, on the other hand, might want only small-quantity,
short-run items. Ideal for these vendors would be an order that is split up
into long-run and short-run items. In many industries, such as paper and pipe
fittings, distributors break up orders in this way.

Marketers can differentiate individual orders in terms of product uses as well

as users. The distinction is important; users may seek different suppliers for
the same product under different circumstances. The pipe-fittings
manufacturer that focused on urgent orders is a good example of a
marketing approach based on these differences.

Situational factors can greatly affect purchasing approaches. General Motors,

for example, makes a distinction between product purchasesthat is, raw
materials or components for a product being producedand nonproduct
purchases. Urgency of order fulfillment is so powerful that it can change both
the purchase process and the criteria used. An urgent replacement is
generally purchased on the basis of availability, not price.

The interaction between situational factors and purchasing approaches is an

example of the permeability of segmentation nests. Factors in one nest affect
those in other nests. Industry criteria, for instance, an outer-nest
demographic description, influence but do not determine application, a
middle-nest situational criterion. The nests are a useful mental construct but
not a clean framework of independent units because in the complex reality of
industrial markets, criteria are interrelated.

The nesting approach cannot be applied in a cookbook fashion but requires,

instead, careful, intelligent judgment.
Buyers Personal Characteristics

People, not companies, make purchase decisions, although the

organizational framework in which they work and company policies and
needs may constrain their choices. Marketers for industrial goods, like those
for consumer products, can segment markets according to the individuals
involved in a purchase in terms of buyer-seller similarity, buyer motivation,
individual perceptions, and risk-management strategies.

Some buyers are risk averse, others risk receptive. The level of risk a buyer
is willing to assume is related to other personality variables such as personal
style, intolerance for ambiguity, and self-confidence. The amount of attention
a purchasing agent will pay to cost factors depends not only on the degree of
uncertainty about the consequences of the decision but also on whether
creditor blame for these will accrue to him or her. Buyers who are risk averse
are not good prospects for new products and concepts. Risk-averse buyers
also tend to avoid untested vendors. Some buyers are meticulous in their
approach to buyingthey shop around, look at a number of vendors, and
then split their order to assure delivery. Others rely on old friends and past
relationships and seldom make vendor comparisons.2 Companies can
segment a market in terms of these preferences.

Data on personal characteristics are expensive and difficult to gather. It is

often worthwhile to develop good, formal sales information systems to
ensure that sales people transmit the data they gather to the marketing
department for use in developing segmented marketing strategies. One
chemical company attributes part of its sales success to its sales information
systems routine collection of data on buyers. Such data-gathering efforts are
most justified in the case of customers with large sales potential.

Reassembling the Nest

Marketers are interested in purchase decisions that depend on company

variables, situational factors, and the personal characteristics of the buyers.
The three outer nests, as Exhibit 2 shows, cover company variables; the
fourth inner-middle nest, situational factors; and the innermost nest,
personal characteristics.
Exhibit 2 Classification of Nests

Moving from the outer to the inner nests, the segmentation criteria change in
terms of visibility, permanence, and intimacy. The data in the outer nests are
generally highly visible (even to outsiders), are more or less permanent, and
require little intimate knowledge of customers. But situational factors and
personal characteristics are less visible, are more transient, and require
extensive vendor research.

An industrial marketing executive can choose from a wide range of

segmentation approaches other than the nested approach. In fact, the
myriad of possibilities often has one of the four following outcomes:

No segmentation. The problem is too large to approach.

After-the-fact segmentation. Our market research shows that we have
captured a high share of the distribution segment and low shares of the
others; thus we must be doing something right for customers in high-share
segments.
Superficial segmentation. While we know all banks are different, its
easier to organize marketing plans around banks because we can identify
them and tell the sales people whom to call on. This dangerous outcome
gives a false sense of security.
Obtuse, convoluted, and disorganized segmentation. We have a 300-
page report on market segmentation and customer buying patterns, but there
is just too much information in there. So we have decided to focus on
insurance companies and hospitals to avoid another two-day market planning
meeting.
The hierarchical structure approach is easy to use. Marketers can, in most
cases, work systematically from the outer nests to the inner nests. They can
run through the whole set of criteria and identify important factors that
otherwise might be neglected. And they can balance between reliance on the
easily acquired data of the outer nests and the detailed analyses of the inner
nests.

We suggest that a marketer begin at the outside nest and work inward
because data are more available and definitions clearer in the outer nests.
On the other hand, the situational and personal variables of the inner nests
are often the most useful. In our experience, managers most frequently
neglect situational criteria. In situations where knowledge and analysis exist,
a marketer might decide to begin at a middle nest and work inward or, less
probably, outward.

After several attempts at working completely through the process, companies will
discover which segmentation criteria are likely to yield greater benefits than others
and which cannot be considered carefully without better data. A warning is
necessary, however. A company should not decide that an approach is not useful
because data are lacking. The segmentation process requires that assessments of
analytic promise and data availability be made independently. The two steps should
not be confused. When the necessary data are gathered, managers can weigh
segmentation approaches. The study revealed that the supplier's service managers under estimate
the quality judgments of their customers. The largest differences with respect to the general company
items were observed in the following areas. 1. Administrative services. 2. Complaint handling system. 3.
Relations with the vendor's sales staff. 4. Relations with the vendor in general. 5. Quality of delivery. The
largest differences with respect to after sales service were observed in the following areas. 1. Availability
of technical services staff. 2. Response time. 3. Price performance ratio.