1. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations

2. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Selecting a well-defined group of potentially profitable customers. High-Growth Companies Succeed By Focusing marketing resources on acquiring, developing, and retaining profitable customers. Developing a distinctive value proposition.

3. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Five Criteria for Evaluating Potential Market Segments 1.Measurability 2.Accessibility 3.Substantiality 4.Compatibility 5.Responsiveness

4. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations 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.

5. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations 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.

6. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations Bases for Segmenting Business Markets Macrosegmentation. Microsegmentation.

7. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations 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. Selected Macrolevel Bases of Segmentation Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations

8. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations 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. Selected Microlevel Bases of Segmentation Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations

9. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations 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.

10. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations 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.

11. Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations 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. An Approach to Segmentation of Business Markets Copyright © 2004 by South-Western, a division of Thomson Learning, Inc. All rights reserved. Developed by Cool Pictures and MultiMedia Presentations