Segmentation Studies

Segmentation is at the very heart of marketing. A segment is a group of individuals or companies with a common attribute that causes them to share similar needs. Marketers tailor their products, services and communications to these common attributes in order to ensure that their offering meets market requirements. Most business-to-business markets possess at least 3 segments, meaning that the astute b-to-b marketer should usually market at least 3 different offerings.

There are three broad approaches to segmentation based on the “demographics” of the firm (we call these firmographics), on the company’s behaviour (i.e. how it acts), and on its needs:

Type of Segmentation	Questions Answered
Firmographics	Geography of location, Size of company, Standard Industrial Classification, etc.
Behavioral	What companies buy, What companies produce, How companies produce it
Needs-Based	What companies want, What drives companies in their actions

A good segmentation is one that enables a supplier to successfully meet customer needs. It will be apparent from the above segmentations that “firmographics” is a very simple means of classifying companies but may not be the most effective. Needs-based segmentations are the most accurate but they are difficult to achieve. People within companies should understand the market in terms of all three different types of segmentations in order to fully understand customer requirements, before tailoring customer value propositions around the needs of the segments of interest.

It is worth highlighting the fundamental principle behind market segmentation: The top 20% of customers in a business may generate as much as 80% of the company’s revenue. What’s more, half of the company’s profit may then be lost serving the bottom 30% of unprofitable customers.

Segmentation is a means of capturing value – customers receive and pay for benefits they value; conversely they neither receive nor pay for benefits they do not value.

B2B International will assist you in segmenting your market and in building the segmentation into your marketing strategy. Specifically, we will help you to:

Differentiate products or services in line with your customers
Improve your competitive positioning
Tailor your product offering and pricing strategy to fit the markets with most potential
Provide focus on your customers so that you can:

Concentrate on providing profitable products or services
Target marketing and selling resources

"All was very interesting. The case studies were very helpful, otherwise it can be quite easy to just sit and listen all day. It was interesting to share experiences with other industries. "