Chapter 6 - BusinesstoBusinessMarketing Lecture4a...

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Business-to-Business Marketing Lecture 4a Business market segmentation
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Great  diversity in needs  and  behaviours  of business customers Ideally, customers are all unique it requires completely unique offering  per customer to achieve  max satisfaction On the other extreme, also possible to have standard offering  to  meet needs of the “average ” customer (majority) at an acceptable  level (e.g. operating efficient for firms) But standard offering does not satisfy non-average customers , who will then be served by our competitors, which progressively leads to  loss of market position Lecture 4a: Business market segmentation   Segmentation
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Understanding customers involves adopting a  position in- between  over-standardised  and over-customised The pioneering view put forward by  Wendell Smith  was that  segmentation:                                             “ consists of viewing a  heterogeneous market … as a number of smaller homogeneous  markets  in response to differing product preferences  among  important market segments ” (1956, p.6). The market is seen as  a set of different customer  requirements , that helps firms achieve their target  better, by clearly matching  their strengths and capabilities with  the requirements of specific segments Lecture 4a: Business market segmentation
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Value of industrial segmentation  (Shapiro and Bonoma, 1984) : Facilitating better understanding  of the whole market  place, including the behaviour of buyers  and why they  buy; Enabling better selection  of market segments that best fit  the company’s capabilities; Enabling improved management  of the marketing activity Lecture 4a: Business market segmentation
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Segmentation provides the marketer with the basis to achieve  by establishing  degrees of homogeneity  in what would  otherwise be a heterogeneous market place.  The homogeneous groups that result from segmentation enable  the marketer to decide what parts of the market to target  with its  solutions,  in the expectation that it can  solve customer problems   more effectively and profitably than competitors.  Segmentation enables the best match between the seller/buyer  problem-solving abilities and uncertainties so  sustainable relationships  can be created.  Lecture 4a: Business market segmentation
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Iterative (repeated step-by-step) process  of  classification  in  meaningful groups Each additional step leads to further sub-divisions Starts with the 
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This note was uploaded on 05/12/2011 for the course MARKETING 222 taught by Professor Antonios during the Spring '11 term at Aarhus Universitet.

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Chapter 6 - BusinesstoBusinessMarketing Lecture4a...

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