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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
purchase in smaller quantities.
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
⚫The customers in the niche have a different and somewhat complex set
of needs. Which should be first indentified by getting information from
the customers with the help of marketing marketing research. The
company should then develop a new product (or sevices) or promote an
existing product in a new way so as to tailor to the special needs and
benefits of such customers.
⚫Generally, the customers in the niche are willing to
pay a higher price to the company which best satifies
their special needs.