Segmenting Business Markets

Consumer and business marketers use many of the same variables to segment their markets. Business buyers can be segmented geographically, demographically (industry, company size), or by benefits sought, user status, usage rate, and loyalty status. Yet, business marketers also use some additional variables, such as customer operating characteristics, purchasing approaches, situational factors, and personal characteristics. By going after segments instead of the whole market, companies can deliver just the right value proposition to each segment served and capture more value in return.

Almost every company serves at least some business markets. For example, American Express targets businesses in three segments—merchants, corporations, and small businesses. It has developed distinct marketing programs for each segment. In the merchants segment, American Express focuses on convincing new merchants to accept the card and on managing relationships with those that already do. For larger corporate customers, the company offers a corporate card program, which includes extensive employee expense and travel management services. It also offers this segment a wide range of asset management, retirement planning, and financial education services.

Finally, for small business customers, the credit-card company AAmerican Express has created OPEN: The Small Business Network, a system of small business cards and financial services. It includes credit cards and lines of credit, special usage rewards, financial monitoring and spending report features, and 24/7 customized financial support services. "OPEN is how we serve small business," says American Express."

Many companies set up separate systems for dealing with larger or multiple-location customers. For example, Steelcase, a major producer of office furniture, first segments customers into 10 industries, including banking, insurance, and electronics. Next, company salespeople work with independent Steelcase dealers to handle smaller, local, or regional Steelcase customers in each segment. But many national, multiple-location customers, such as British Petroleum or Siemens, have special needs that may reach beyond the scope of individual dealers. So Steelcase uses national account managers to help its dealer networks handle its national accounts.

Within a given target industry and customer size, the company can segment by purchase approaches and criteria. As in consumer segmentation, many marketers believe that buying behavior and benefits provide the best basis for segmenting business markets.15

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Salehoo Secrets and Tips

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