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Basics of Marketing - Kotler Philip

The basic principles of segmentation of markets for industrial goods

As a basis for segmenting the markets of industrial goods, you can use most of the same variables that are used in segmenting consumer markets. Buyers of industrial goods can be segmented by geography and by a number of behavioral variables, based on the benefits they seek, the user status, the intensity of consumption, the degree of commitment, the readiness to perceive the product and the attitude towards it.

More often segmentation of the markets of the goods of industrial purpose spend on versions of final consumers of the goods. Different end-users often look for different benefits in the product. So, in relation to them you can use different marketing complexes. Consider, for example, the market of transistors.

The market of transistors consists of three submarkets: military, industrial and commercial.

Military buyers pay great attention to the quality of the product and its availability. Firms selling transistors on the military market should invest heavily in R & D, use sales agents familiar with military procurement procedures, and have a fairly narrow product specialization in production.

Buyers of industrial goods, such as computer manufacturers, are interested in high quality goods and a well-established system of maintenance. The price, if it does not become excessive, has no decisive significance for them. When working in this market, the transistor manufacturer makes modest investments in R & D, uses traveling salesmen with technical knowledge, and offers a wide product range. Commercial buyers, such as manufacturers of pocket radios, in the purchase of components mainly interested in the price and prompt delivery. When working on this market, the manufacturer of transistors spends almost nothing at all on R & D, uses the services of aggressive salespeople who do not have technical training, and offers the most usual range of products that can be produced on a mass scale.

Another variable that can be used to segment the market of industrial goods is the weight of the customer. Many firms establish separate systems for servicing large and small customers. For example, the company "Steelcase", one of the largest manufacturers of office furniture, divides its customers into two groups:

Large customers. Clients such as IBM Corp., Prudencial and Standard Oil are each serviced by a separate unit headed by a national manager who manages the sales area managers in the field.

Customers served through dealers. Smaller customers serve the sales staff of the company directly in sales areas, working in close contact with dealers who hold privileges for the trade in goods "Steelcase".

Industrial firms usually assess the capabilities of their target markets, applying several variables simultaneously for their segmentation.