1. WHAT IS MARKET SEGMENTATION?
“Market segmentation is a strategy for selecting customers according to differences in the way they respond to marketing effort, for choosing among alternative market opportunities and for tailoring marketing strategies to those distinctive opportunities”.

2. SEGMENTATION,TARGETING & POSITIONING OF INDUSTRIAL MARKET
Presentation On
SEGMENTATION,TARGETING & POSITIONING OF INDUSTRIAL MARKET

3. Benefits of Market Segmentation
First, the mere attempt to segment the business market forces the marketer to become more attuned to the needs of customer segments.
Second, market segmentation provides the foundation for efficient and effective business marketing strategies.
Third, market segmentation provides a basic unit of analysis for marketing planning and control

4. Requirements for a Effective Segmentation
Measurable
Substantial
Accessible
Differentiable
Actionable

5. Bases For Segmenting Business Markets
Demographic
1. Industry: Which industry should we serve?
2. Company Size: What size companies should we serve ?
3. Location: What geographical areas should we serve?

6. Operating Variables
1. Technology: What customer technologies should we focus on?
2. User or nonuser status: Should we serve heavy users, medium users or light users or nonusers ?
3. Customer Capability : Should we serve customers needing many or few services

7. Situational Factors
1. Urgency: Should we companies that need quick and sudden delivery or service?
2. Specific application: Should we focus on certain applications of our product rather than all applications?
3. Size of order: Should we focus large or small orders

8. Personal Characteristics
1. Buyer-seller similarity: Should we serve whose people and values are similar to ours?
2. Attitude towards risk: Should we serve risk taking or risk avoiding customers?
3. Loyalty: Should we serve companies that show high loyalty to their suppliers?

9. Two Important Set of Characteristics of Business Buyers
The characteristics of the buyer as a consumer organisation.
The behavioral characteristics of the buyer

10. Classification of Market Segmentations
Macro Segmentation: It involves the subdividing of the market into subgroups based on certain overall characteristics of the buyer such as the industry group, type of organisation, size, product requirements, end use of the product bought, geographical locations.

11. 2. Micro Segmentation: It specifically pertains to characteristics of the decision making process and the buying structure within customer organisations.
This includes such factors as the position of buying centers in authority, demographics and personality characteristics of key members of the buying center, attitude towards the vendor and specific attributes in the organisation’s buying decisions.

12. POSITIONING
In marketeting, positioning is the technique by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization. It is the 'relative competitive comparison' their product occupies in a given market as perceived by the target market.

13. POSITIONING
Re-positioning involves changing the identity of a product, relative to the identity of competing products, in the collective minds of the target market.
De-positioning involves attempting to change the identity of competing products, relative to the identity of your own product, in the collective minds of the target market..

14. POSITIONING PROCESS
Defining the market in which the product or brand will compete (who the relevant buyers are).
Identifying the attributes (also called dimensions) that define the product 'space.'
Collecting information from a sample of customers about their perceptions of each product on the relevant attributes.
Determine each products' current location in the product space

15. POSITIONING PROCESS The position of your product
Determine the target market's preferred combination of attributes (referred to as an ideal vector)
Examine the fit between:
The position of your product
The position of the ideal vector
Position.

16. POSITIONING CONCEPTS Functional positions Solve problems
Provide benefits to customers
Get favorable perception by investors and lenders
Symbolic positions
Self-image enhancement
Ego identification
Belongingness and social meaningfulness
Affective fulfillment

17. POSITIONING CONCEPTS Experiential positions
Provide sensory stimulation
Provide cognitive stimulation

18. POSITIONING STRATEGIES
Benefit Positioning: Any distinctive benefit of use of the product becomes the core of positioning like energy saving by a machine, low operating cost, pollution free product etc.
Cost Positioning: The low cost, like the low of product or the low cost per unit if output by a machine.

19. POSITIONING STRATEGIES
Segment Positioning: Products may be positioned with reference to specific segments. Eg: A courier service firm has separate brands for low weight & high weight articles.
Application/Use positioning: A product may be positioned with respect to the use/application or the customer group it is meant for.

20. POSITIONING STRATEGIES
Competitor Positioning: Positioning is done directly against the competitor. This strategy is suitable for a firm that has solid differential advantage.
Quality positioning
Product category positioning some time positioning strategy entails associating with a product class or category.

21. TYPES OF POSITIONING
Variety Based Positioning : It is based on producing a subset of an industry’s products or services. The focus is on product or service varieties.
Need Based Positioning: The focus is on satisfying most of the needs of the target customers. This strategy is appropriate when customers have different needs and when a tailored set of activities can serve those needs.

22. TYPES OF POSITIONING
Access Based Positioning: Its is applicable on the needs of different sets of customers are similar, but the best ways of accessibility are due to factors like geography or customer scale.

23. TARGETING OF INDUSTRIAL GOODS

24. WHAT IS TARGET MARKETING ?
Market segmentation would reveal the nature of clustering of buyers, the distinctive characteristics of the different segments and the marketing opportunities and requirements.

25. EVALUATION OF MARKET SEGMENTS
Potential
Structural attractiveness
Company objectives and competence

26. STRATEGIES OF TARGET MARKETING
Single Segment Concentration
Selective Specialization
Product Specialization
Market Specialization
Full market coverage

27. Differentiation
The means of differentiation are peculiar to each industry. Differentiation can be based on the product itself, the delivery system by which it is sold, the marketing approach , and a board range of other factors

28. Bases Of Differentiation
Product Attributes: It is based on certain
differentiation characteristics of the physical product.
According to kotler, the main product differentiation are
features.
Performance )reliability
Conformation )repairability
Durability )style and design

29. Service Differentiation: Services can be a factor of
differentiation in number of cases. services as a
differentiator assumes more significance where the
scope of differentiation in respect of the physical
product is limited.
Delivery
Installation
Customer training
Consulting service
Repairs

30. Personnel Differentiation : Sometimes people who matter
can also make a difference. Hiring and training better
people than competitors are the most important
personnel differentiation a company can have.
The six important characteristics of a well trained
personnel are
1) Competency ) Reliability
2) Courtesy ) Responsiveness
3) Credibility ) Communication Capability

31. Image Differentiation: Many consumers are
influenced by the brand or company image, even
when the competitive offerings are similar.
For Example: Some firms tries to project a high
image by publicizing the name of high profile
customers they serve or the business they won
by competing with other heavy weights.

32. ESSENTIALS OF DIFFERENTIATION
Differentiation, to be successful in business marketing,
must have the essential characteristics.
Distinctive: The differentiation should be meaningful from customers’ point of view, i.e.. It should offer some tangible benefit to the customers.
Superior: it is not enough that the differentiation has customer benefits but the customers should also perceive a better benefit than the offerings of other companies

33. 3) Communicable: The difference should be clearly communicable so that it becomes tangible to the customers.
Sustainable: The differentiation should ideally be sustainable ----it should not be easy for the competitors to initiate it.
Profitable: The differentiation will be meaningful for the company only if it is profitable.

34. THANK U

35. Managing the Business Marketing Channels
Presentation on
Managing the Business
Marketing Channels

36. In this session… Basic Structural Elements
Ashwin & Raghavendra
Formulating Channel Strategy
Sandeep
Channel Logistics
Sandeep

37. Basic Structural Elements

38. Marketing Channel defined
It is primary means through which
the industrial firms finds new prospects for its products
communicates with existing customers
physically delivers the products to the industrial user

39. It’s a challenging task, because…
The alternatives are numerous.
Marketing goals differ.
A variety of customer market segments often require that a number of separate channels be employed concurrently

40. Essential Tasks Making contact with potential buyers Negotiating
Establishing contractual arrangements.
Transferring Title
Communications

41. Essential Tasks contd…
Providing required financial arrangements
Servicing the product
Providing local inventory.
Transportation.
Storage

42. Types of Distribution Channels
Direct Distribution
It is a channel strategy that does not utilize middlemen but instead the manufactures own sales force deals directly with the customer.
Indirect Distribution
It involves utilization of one or more types of middlemen in the channel.

43. Participants in the Industrial Channel
Distributors
General line distributors
Specialists
Combination House
Manufactures Agents/Representatives.
Jobbers
Brokers
Commission Merchants

44. Channel Alternatives Producer Industrial Buyer Wholesaler B Agent C D

45. Channel Alternatives contd…
Manufacturer’s Sales Branches
Manufacturer
Manufacturer’s Representatives
Industrial Distributors
Customer

46. Formulating Channel Strategy

47. Channel Design Process
Selection of Channel
Evaluation of Alternatives
Quantitative
Analysis of Channel Objectives
Qualitative
Analysis of Company, Competitive & Environmental Conditions
Specification of Feasible Channel Alternatives
Analysis of tasks to be performed by the channel

48. Channel Design Process contd…
Channel Objectives
Profit Considerations
Reflect marketing goals
Channel Design Constraints
Availability of good alternatives
Traditional channel process
Product characteristics
Financial resources
Competitive Strategies
Geographic dispersion

49. Channel Design Process contd…
Pervasive Channel Tasks
Channel Alternatives
Degree of directness
Assessing product/Market Factors
Type of intermediary
Number of channels
Legal issues

50. Channel Design Process contd…
Channel Selection
Evaluating alternative channels
Qualitative dimensions

51. Channel Administration
Selection of Channel Members
Securing Good Intermediaries
Motivating Channel Members
A Partnership
Dealer Advisory Councils
Margins & Commissions

52. Factors influencing Channel Structure
Is the market Vertical or Horizontal?
Market potential
Geographical concentration of purchasers
Gross Profit Margin
Price Volatility
Need for Product Installation
Repair & Maintenance Service requirements
Firm’s Financial position
Seller’s Marketing Objectives

53. Channel Logistics

54. Channel Logistics
It’s a function of facilities, their location and transportation network.
A operation in which such activities as production scheduling
storage
inventory control
order handling
packaging
selection of plant & warehouse sites
transportation
with their resulting costs, are balanced against the value of customer satisfaction.

55. Channel Logistics contd…
Classified as
Stationary Facilities
Transportation Network
Location

56. Markets change faster than Marketing
Thank You

57. Vendor Analysis & Vendor Rating
Criteria (Factors) for Vendor Appraisal
Technical Capability
Manufacturing Capability
Service Capability
Financial Capability
Management Capability
Methods of evaluating Vendor Performance (Vendor Rating)
Categorical Method
Weighted Point Method
Cost-Ratio Method

58. Categorical Method Categorical Method
Is based on the experience and opinion of the user
departments
Significant performance criteria are drawn up by the
purchasing department
Users assign a grade of plus, minus or neutral against each
criterion
Regular meetings are held and suppliers rated overall as
high, medium or low
Inexpensive but subjective rating system

59. Weighted Point Method Weighted Point Method
Significant performance criteria are listed
weights are assigned to each criteria based on their
importance
The scores of all the criteria are totaled to get the composite
performance score of each vendor
Acceptable and unacceptable ranges can be applied for the
composite scores
This enables to compare the ratings of all the suppliers

60. Weighted Point Method Example
Factor
Weight
Actual Performance
Performance Score
Quality
Delivery
Price
Cost Redn. Suggestions 40 30 10 20
90% Acceptable
125% of lowest price 100/125=0.8
% of total received=60
40X .9 =36
30X .9 =27
10X .8 = 8
20 X .6 =12
Total Score =83

61. Based on the use of cost analysis in rating suppliers
Cost-Ratio Method
Cost-Ratio Method
Based on the use of cost analysis in rating suppliers
Significant performance criteria are identified
Costs associated with each criteria are identified
Costs associated with quality
Defective products, inspections, visits to vendor
plants, sample evaluation etc.,
Costs associated with delivery
Telephone follow-ups, additional paper work to
expedite orders, factory down-time due to delays,
emergency transport costs etc.,
Costs associated with service
Intangible costs of training, spare availability, repair
capability, prompt responses etc.,

62. Cost Ratio Method Contd.
All such costs for different criteria are related to the value of
the products received
A higher cost to value ratio gives a lower rating and a lower
value of the ratio will give a higher rating
The costs so computed are adjusted with the supplier’s quoted
price to determine the “net adjusted price”
This method is gaining in importance

63. Cost Ratio Method Example
Supplier
Q/C Ratio
D/C Ratio
S/C Ratio
Total Cost Penalty
Quoted Price/Unit
Net Adj. Price/Unit A B C D 2% 1% 3%
-4%
-1%
7 %
4 %
1 %
95.5 95
94.75
95.25
94.55
101.65
98.54
96.20