Marketing Management 3(2+1)

Lesson 10 : Market Segmentation

Bases for Segmentation in Industrail Markets

In contrast to consumers, industrial customers tend to be fewer in number and purchase larger quantities. They evaluate offerings in more detail, and the decision process usually involves more than one person, few members, large quantities.

1. These markets are segmented on characteristics such as:
2. Location – due to location, shipping costs may be high bulk to value ratio
3. Company type – Size, decision unit, Purchase criteria.
4. Behavioral characteristics – usage rate, Buying status, purchase procedure.

Market Segmentation simplifies the firm’s product, pricing, promotion and distribution strategies and also facilitates planning and organizing function of management more easily and cost effectively. It tries to satisfy the customers ‘very well’, may produce bigger sales. Nut the issue whether to segment or combine again depends on the firm’s resources, type of competition and emphatically customer’s needs, attitudes and buying behaviour.