5.4.1 STP in Business Markets¶
Segmentation, targeting, and positioning (STP) are foundational concepts in marketing. While the principles of segmentation in B2B markets are similar to those in B2C markets, their objectives and execution differ significantly. This document explores segmentation in B2B markets, emphasizing the nuances that distinguish it from B2C.
Segmentation Variables in B2B Markets¶
Segmentation in B2B markets often uses variables similar to B2C (e.g., geographic, demographic, psychographic) but also incorporates additional parameters unique to B2B contexts.
1. Geographic Segmentation¶
Defines the location of the customer’s operations. - Country: Global, national, or local presence. - Region: North America, Europe, Asia-Pacific, etc. - City: Specific urban or rural areas.
2. Firmographic (Demographic) Segmentation¶
Focuses on measurable attributes of the firm. - Industry Type: Construction, manufacturing, technology, service, etc. - Firm Size: Revenue, employee count, or turnover. - Ownership Type: Government, private, non-profit, cooperative, franchise, etc. - Scale of Operations: Global, regional, or local players.
3. Psychographic Segmentation¶
Examines the relative importance of the offering to the customer. - Product Importance: The significance of the product/service to the customer’s business. - Example: ERP solutions are critical to business operations, whereas consumables like paper are less significant and price-sensitive. - Decision-Maker Priorities: - Price: Cost competitiveness. - Product Features: Specific capabilities or technical specs. - Service: Reliability, after-sales support, etc. - Convenience: Ease of purchase or product availability. - Assurance of Supply: Confidence in uninterrupted delivery.
4. Behavioral Segmentation¶
Analyzes purchasing behavior and patterns. - Volume: Size of the purchase order. - Purchase Frequency: Regularity of purchases. - Attitude Towards Risk: Risk-averse or risk-tolerant purchasing behavior. - Loyalty: Brand or supplier loyalty. - Urgency: Time sensitivity of purchases.
5. Benefit Sought¶
Determines what the customer values most in the purchase: - Price: Cost savings. - Quality: Product durability or performance. - Service: Support and maintenance. - Relationship: Trust and ease of collaboration.
6. Buying Approach¶
Examines how the customer makes purchasing decisions. - Centralized vs. Decentralized Buying: - Centralized: Decisions made at a corporate level for all offices/regions. - Decentralized: Individual offices or regions make their own purchasing decisions. - Purchase Policies: - Standardized: Pre-defined templates for vendor selection. - Custom Process: Involves detailed bidding, vendor evaluation, and multiple stakeholders.
Key Differences Between B2B and B2C Segmentation¶
| Aspect | B2C Market | B2B Market |
|---|---|---|
| Objective | Identify the target customer. | Understand customer requirements and solve their problems. |
| Number of Customers | Many | Few, but each is significant. |
| Customization | Limited | High, based on specific customer needs. |
| Focus | Product features and price. | Business benefits and problem-solving. |
| Relationship | Minimal | Critical for long-term collaboration. |
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