Solved: Assume you have been appointed as the Marketing Manager

Assume you have been appointed as the Marketing Manager of a B2B marketing organisation
with which you are familiar. The organisation’s market comprises business firms and other
organisations. You believe you need to segment the market to better target the needs of
different customers.
a) Explain the different approaches you could use to segment the market, and then
recommend the most appropriate approach (supporting your recommendations with
appropriate reasoning).

b) Explain how you would assess the value of potential segments.

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Expert Answer

A)customer segmentation is powerful,beca it allows the marketer to draw an accurate picture of their customers,group them according to similarities and devise pinpointed messages to specific segments of their customer base.inevitably these messages are personalised and tallored,which results im a significantly higher number of conversations.But there is no one single way of segmenting customers that is clearly the best option.

  1. Segmenting Customers Based on Firmographics:Firmographics is to B2B marketing what demographics is to B2C marketing:it is a method of segmenting customers based on the squared qualities of a particular segment.Firmographic segmentation groups customers based on things like the size of the business,where the company is located,what the competitive nature of their industry is ,etc.
  2. Segmenting Customers Based on Tiering:customers tiering is a method of segmentation based on how well the customer matches the goals of your business.for instance,you can use customer tiering to segment customers based on how much revenue you can expect them to bring to your business during the duration of your relationship,or by how closely that customer matches your own sales and marketing strategies.
  3. Segmenting customers based on Needs:This model segments Customers based on their needs.of all the methods of segmentation,this one offers the marketer the most accurate way to target their customer segments.its highly scalable,because the marketer can designate as many needs-based segments as they like.The drawback is that the needs of customers can be difficult to determine,or even to define.its also hard for marketing to express to sales reps who will be working with each customer segment.

In my point of view segmentation customers based on Tiering is most appropriate approach because it is a forward thinking approvh to segmentation,because its ranks the importance of customer or lead based on the most important factor-how the customer potentially bring in terms of value.

B)In evaluating different market segments,the firm must look at two factors:the segmentation overall attractiveness and the company’s objectives and resources.A potential segment must have characteristics that make it generally attractive,such as size,growth,profitability,scale economies, and low risk.Investing in the segment should make sense given the competencies and resources.Some attractive segments may not mesh with the company long run objectives or the company may lack one pr more necessary competencies to offer superior value.

Single segment concentration

volkwagen concentrates on the small car market and porsche on the sports car market.Through concentrated marketing,the firm gains a strong knowledge of the segment needs and achieves a strong market presence.furthermore,the firm enjoys operating economies through specialising its production,distribution and promotion.if its captures segment leadership the firm can earn a high return on its investment.companies can try to operate in super segments rather than in isolated segment.A super segment is a set of segments sharing some exploitable similarity.for example,many symphony orchestras target people who regularly attend concerts.

Selective specialization:

A firm selects a number of segments,such as objectively attractive and appropriate.There may be little or no synergy among the segments,but each promises to be a moneymaker.This multi-segment strategy has thae advantage of diversifying the firms risk.

Product specialization:

The firm makes a certain product that it sells to several different market segments.An example would be a microscope manufacturer who sells to university,government and commercial laboratories.the firm makes different microscope s for the different customer groups and builds a strong reputation in the specific product areas

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