B2B Marketing Notes

CH 5 Segmenting the business market and estimating the segment demand

What are the key criteria for determining which characteristics best define a unique market segment?
1. Measurability: The degree to which information on the particular buyer characteristics exists or can be obtained.
2. Accessibility: The degree to which the firm can effectively focus its marketing efforts on chosen segments.
3. Substantiality: The degree to which the segments are large or profitable enough to be worth considering for separate marketing cultivation.
4. Responsiveness: The degree to which segments respond differently to different marketing mix elements, such as pricing or product features.
Macro-segmentation centres on the characteristics of the buying organization and the buying situation and thus divides the market by such
organizational characteristics as size, geographic location, the North American Industrial Classification System (NAICS) category, and organizational
structure. Such characteristics are important because they often determine the buying needs of the organization.
Micro-segmentation requires a higher degree of market knowledge, focusing on the characteristics of decision-making units within each
macrosegment — including buying decision criteria, perceived importance of the purchase, and attitudes toward vendors.
SELECTED MACROLEVEL BASES OF SEGMENTATION
Variables Illustrative breakdowns
Characteristic of buying organization
Size (the scale of operations of the organization) Small, medium, large; based on sales or number of employees.
Geographical location USA, Asia Pacific, Europe, Middle East and Africa.
Usage rate Heavy users, light users, moderate users, non-users.
Structure of procurement Centralized, decentralized.
Product/service application
NAICS category Varies by product or service
End market served Varies by product or service
Value in use High, low.
Characteristic of purchasing situation
Type of buying situation New task, modified rebuy, straight rebuy.
Stage in purchase decision Early stages, late stages.
SELECTED MICROLEVEL BASES OF SEGMENTATION
Variables Illustrative breakdowns
Key criteria Quality, delivery, supplier reputation.
Purchasing strategies Single source, multiple sources.
Structure of decision making unit Major decision participants (for example, purchasing manager and plant manager).
Importance of purchase High importance, low importance.
Organizational innovativeness Innovator, follower.
Personal characteristics
Demographics Age, educational background
Decision style Normative, conservative, mixed mode.
Risk Risk taker, risk avoider.
Confidence High, low.
Job responsibility Purchasing, production, engineering.

KEY ACCOUNT MANAGEMENT

An integrative model:
Intrapreneurial ability, communication quality, activity intensity, activity pro-activeness, esprit de corps, and organizational support drive
relationship effectiveness. Relationship effectiveness, the mediating, variable, is composed of trust, relationship commitment, cooperation,
conflict resolution, and information sharing. Further, strategic, operational, and personal fit serve as both an antecedent to relationship
effectiveness and as moderators of the relationships between the aforementioned antecedents and relationship effectiveness. Ultimately,
relationship effectiveness is antecedent to KA performance.
 Relationship effectiveness: Extent to which an organization receives good relational outcomes for the KA of interest.