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Industrial Market
Segmentation, Target
Marketing and
Positioning
SEGMENTING, TARGETING, AND
POSITIONING (STP) NETWORK
For an industrial marketer, it is an important
strategic marketing decision to select the target
markets (or customers) and to position the
product (or service) favourably in the minds of
the target customer.
Cont’d
Procedure Followed for Market Segmentation
• Macro-variables
• Micro-variables
Major Variables used for Segmenting
Industrial Market
Cont’d
Macro-segmentation
Macro-segmentation is an approach consists of
identifying the macro-variables on the basis of industry
characteristics or organizational characteristics such as
type, size, geographic location or product application.
The information on macro-variables can be obtained
through secondary sources of information such as trade
directories, business magazines, government publication,
and company sources.
Some of the macro-variables used
for industrial market are classified
into
Industry characteristics
Many industrial firms market their products or services to different
“types of industries”. These industries are classified by Standard
Industries Classification (SIC) by government publication.
Organisational characteristics
The “size” of the customer organization is an important macro-
variable used to segment the market. Larger organisations have
different purchasing requirements and will respond differently to
marketing strategies or programs as compared to smaller firms that
Micro-segmentation
Micro-segments are homogenous groups of customers within the
macro-segments. Thus, industrial marketers subdivide macro-
segments into micro-segments only if necessary.
�Once the decision is made on target segments, the segments that will
be served by an industrial organisation. The next step is to decide which
strategy the firm will adopt out the three broad strategies available,
these are the following.
⚫CONCENTRATED MARKETING
⚫DIFFERENTIATED MARKETING
⚫UNDIFFRENTIATED MARKETING
CONCENTRATED MARKETING
�It means focusing all the marketing efforts on a single or relatively few, carefully defined
segment. The result is likely to be somewhat narrow range of product service accompanied by
high quality, high price, ang highly selective promotional and distribution strategies.
DIFFERENTIATED MARKETING
�Differentiated marketing focuses on a specific market, a “different” market, that is
interested in buying a certain type of product.
A differentiated marketing strategy is when a company creates campaigns that
appeal to at least two market segments or target groups. For example, a store can
promote a sale that appeals to people in at least two cities or locations, or a
company can market a product that appeals to women in at least two age groups.
Fig.6.2 Alternative strategies for
target markets
�UNDIFFERENTIATED MARKETING
�The following are the criteria that are useful to industrial marketers in
selecting a target-market strategy.
NICHE MARKETING
Positioning –is defined as the distinct place a product (or service)occupies in the
minds of the target customers relative to competing products (or service). In
other words , positioning is how the firm wants its product (or service) to be
perceived by the target customers on important attributes or benefits.
*PROCEDURE FOR DEVELOPING
A POSITIONING STRATEGY*
An industrial should follow the following steps while developing
a positioning strategy ;
Identify the target customer’s needs in terms of major attributes or
benefits, while buying a product (or service).