Effective B2B Market Segmentation

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1. The benefits of b2b segmentation are not hard to grasp. The challenge is arriving at the most effective groupings. “A common approach when segmenting business markets is to base this mainly on company size.” These “demographic” approaches to business market segmentation, sometimes referred to as “firmographic segmentation”, are perfectly reasonable and may suffice. However, they do not offer that sustainable competitive advantage that competitors cannot copy. A more challenging segmentation is one based on behavior or needs. Certainly large companies may be of key or strategic value to a business but some want a low cost offer stripped bare of all services while others are demanding in every way. If both are treated the same, one or both will feel unfulfilled in some way and be vulnerable to the charms of the competition.

   In Firmographic segmentation

2. The benefits of b2b segmentation are not hard to grasp. The challenge is arriving at the most effective groupings. “The consumption levels of business-to-business customers are so widely different that this often makes sense due to large companies usually thinking and acting differently to small ones.” These “demographic” approaches to business market segmentation, sometimes referred to as “firmographic segmentation”, are perfectly reasonable and may suffice. However, they do not offer that sustainable competitive advantage that competitors cannot copy. A more challenging segmentation is one based on behavior or needs. Certainly large companies may be of key or strategic value to a business but some want a low cost offer stripped bare of all services while others are demanding in every way. If both are treated the same, one or both will feel unfulfilled in some way and be vulnerable to the charms of the competition.

   In Firmographic segmentation

3. Do companies fall clearly into one of the segments? A company cannot be in more than one segment. This is unlike consumer segments where one week I may fit into an airline’s business-class segment and another week fit into low cost. “In many cases, companies pick out the key firmographic characteristics of each needs-based segment and use these as segment identifiers.” Choosing Segments To Work With

   In Firmographic segmentation

4. “However, people’s needs differ and therefore satisfying them may require different approaches.” What Is Marketing If It Is Not About Segmentation?

   In Needs-based segmentation