Categories of Buyers Choice Criteria

MAJOR SEGMENTATION VARIABLES FOR INDUSTRIAL MARKETS

Demographic

Industry : which industries that buy this product should we focus on ?

Company size ; what size companies should we focus on ?

Location : what geographical areas should we focus on ?

Operating Variables

Technology : what customer technologies should we focus on?

User/non-user status : should we focus on heavy, medium, light users or non-users?

Customer capabilities : should we focus on customers needing many services or few services?

Purchasing Approaches

Purchasing function organization : should we focus on companies with highly centralized or

decentralized purchasing organizations?

General purchase policies: should we focus on companies that prefer leasing ? service contracts?
systems purchases? sealed bidding?

Purchasing criteria; should we focus on companies that are seeking quality? service ? price?

Situational Factors

Urgency ; Should we focus on companies that need quick and sudden delivery or service?

Specific application : Should we focus on certain applications of our product rather than all
applications?

Size of order: Should we focus on large or small orders?

Personal Characteristics

Buyer-seller similarity: Should we focus on companies whose people and values are similar to
ours?

Attitudes toward risk: Should we focus on risk-taking or risk-avoiding customers?

Loyalty: Should we focus on companies that show high loyalty to their suppliers?

Some Macro Variables Used to Segment the Industrial Market

Eight Steps to Better Pricing

Assess what value your customers place on a product or service

Look for variation in the way customers value the product
Assess customers price sensitivity
Identify an optimal pricing structure
Consider competitors reactions
Monitor prices realized at the transaction level
Assess customers emotional response
Analyze whether the returns are worth the cost to serve

VALUE ADDED

There are seven areas of providing added value

1. Area of product-associated benefits
2. Financial benefits
3.

Reputation gained over no. of years

4. Offering consultancy services/problem solving (consultative selling technique)

5. Training
6. Reliable schedule for delivery
7. Companys perceived reputation for efficient servicing, availability of spares and ease of upgradation
PRICING METHOD