Business English Upper Intermediate
U2W09
John Silberstein
johnsilb@aol.com
Agenda
•Marketing Segmentation
Today’s Dilbert
Marketing Segmentation
What is Market Segmentation?
The purpose for segmenting a market is to allow
your marketing/sales program to focus on the
subset of prospects that are "most likely" to
purchase your product. If done properly this will
help to insure the highest return for your
marketing/sales expenditures. Depending on
whether you are selling your product to individual
consumers or a business, there are definite
differences in what you will consider when
defining market segments.
Marketing Segmentation
Category of Needs
Before you begin to segment your market, the
first thing you need to establish is a category of
need that your product satisfies. The following
classifications may help.
Marketing Segmentation
Category of Needs: For businesses:
Strategic
Your product is in some way important to the
enterprise mission, objectives and operational
oversight.
For example, a service that helps evaluate capital
investment opportunities would fall into this domain
of influence. The purchase decision for this category
of product will be made by the prospect's top level
executive management.
Marketing Segmentation
Category of Needs: For businesses:
Operations
Your product affects the general operating
policies and procedures.
Examples might be, an employee insurance plan
or a corporate wide communications system. This
purchase decision will be made by the prospect's
top level operations management.
Marketing Segmentation
Category of Needs: For businesses:
Functional
Your product deals with a specific function within the
enterprise such as data processing, accounting,
human resources, plant maintenance, engineering
design, manufacturing, inventory control, etc. This is
the most likely domain for a product or service, but
you must recognize that the other domains may also
get involved if the purchase of the product or service
becomes a high profile decision. This purchase
decision will be made by the prospect's functional
management.
Marketing Segmentation
Segmentation Needs
Then you should establish what the need is and who is most
likely to experience that need. Your segmentation will be
determined by a match between the benefits offered by your
offering and the need of the prospect. Some "need" categories
for segmentation include:
Reduction in expenses
Improved cash flow
Improved productivity
Improved manufacturing quality
Improved service delivery
Improved employee working conditions/benefits
Improvement in market share/competitive position
Need for education
Involvement with social trends
Specific
Marketing Segmentation
Segmentation Needs
Need for education
Prospects might be businesses or individuals looking for
books on business planning, or seminars on Total Quality
Management.
Involvement with social trends
Prospects might be businesses concerned with
environmental protection, employee security, etc. or
individuals who believe in say 'no' to drugs, anti-crime, etc.
Specific - relating to product/service characteristics
Prospects might be businesses or individuals interested in
safety, security, economy, comfort, speed, quality,
durability, etc.
Marketing Segmentation
Factors that Segment Markets
Having determined the more general
segmentation characteristics you can proceed to
a more detailed analysis of the market. There are
literally thousands of ways to segment a market,
but the following are some of the more typical
segmentation categories.
Marketing Segmentation
Factors that Segment Markets
Industry by SIC code,
Size,
Job position/responsibility,
Climate,
Time related factors,
Language,
Status,
Accessibility,
Future potential,
Ability to make a quick purchase decisions
Access (or lack of access) to competitive offerings,
need for customization,
Product or service application to a business function.
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Marketing Segmentation
Purchase Decision Influencers
Once you have isolated a specific segment of the
market on which to focus, then you can consider
more subtle influences on the purchase decision.
Some of these are:
Number of Decision Makers,
Financial Strength of the Prospect,
Quantity/Volume Requirements,
Commitment Required,
Brand Awareness,
Post Sale Support Expectations.
Marketing Segmentation
Let’s look at the segmentation tree.