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High-Growth
Companies
Succeed By

• Selecting a • Focusing
well-defined marketing
group of resources on
potentially acquiring,
profitable developing,
customers. • Developing a and retaining
distinctive profitable
value customers.
proposition.

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Five Criteria for Evaluating Potential
Market Segments

1. Measurability

2. Accessibility

3. Substantiality

4. Compatibility

5. Responsiveness

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Technological Environment Assessment

1. Product technology—the set of ideas embodied in


the product or service.
2. Process technology—the set of ideas or steps
involved in the production of a product or service.
3. Management technology—the management
procedures associated with selling the product.

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Segmentation Benefits

• First, the marketer to become more attuned


to the unique needs of customer segments.
• Second, focus product development efforts,
develop profitable pricing strategies, select
appropriate channels of distribution.
• Third, provides guidelines that are of
significant value in allocating marketing
resources.

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Bases for Segmenting Business Markets

• Macrosegmentation.
• Microsegmentation.

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Selected Macrolevel Bases of Segmentation

• Macrolevel bases of segmentation are concerned with


general characteristics of the buying organization, the
nature of the product application, and the characteristics
of the buying situation.
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Selected Microlevel Bases of Segmentation

The marketer often finds it useful to divide each


macrosegment into smaller microsegments on the
basis of the similarities and differences between
decision-making units.
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Purchasing Strategies Classifications

1. Satisficers approach a given purchasing requirement by


contacting familiar suppliers and placing the order with
the first supplier to satisfy product and delivery
requirements.
2. Optimizers consider numerous suppliers, familiar and
unfamiliar, solicit bids, and examine all alternative
proposals carefully before selecting a supplier.

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Meaningful Microsegments

 Importance of Purchase -- appropriate when the product is


applied in various ways by various customers.
 Attitudes toward Vendors – an analysis of how various
clusters of buyers view alternative sources of supply often
uncovers opportunities.
 Organizational Innovativeness – some organizations are
more innovative and willing to purchase new industrial
products than others.
 Personal Characteristics – although some interesting
studies have shown the viability of segmentation on the basis
of individual characteristics, further research is needed to
explore its potential as a firm base for microsegmentation.

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An Approach to
Segmentation of
Business Markets

This figure combines


these macrosegment
bases and outlines and
steps required for effective
segmentation.

Source: Adapted by permission of


the publisher from Yoram Wind
and Richard Cardozo, “Industrial
Market Segmentation,” Industrial
Marketing Management 3 (March
1971): p. 156. Copyright 1974 by
Elsevier Science Publishing Co.,
Inc.

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