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on 8 February 2014

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Transcript of Business-to-Business

Segmentation, Targeting and Positioning

Consumer and Corporate Buying Behavior

Shakhribonu Tursunova, Iuliia Volkova, Sophia Kuhl
1. Basics of B2B STP
2. Segmentation
3. Targeting
4. Positioning
5. Case study
6. Conclusion

How can we segment B2B markets?
Personal characteristics of buyers
Segments should be:
- Measurable
- Accessible
- Substantial/profitable
- Actionable
- Differentiable
What is targeting?
Relative attractiveness
Management demands
Organizational demands
proceed to
Step-wise segment selection process
Identified Segment
selection unsuccessful: select again
Quantitative selection criteria:

Segment volume and potentials
in sales and value
Possible market share in the segment
Possible price level
Frequency of requests and orders
Contact costs for the segment
Expected profit from the segment

Qualitative selection criteria:

Tendencies in the segment concerning demand, competition and environment
Degree of existing or possible customer retention
Possible internal synergies
Competitive advantages in the segment

Market coverage
total partial

Targeting strategies
What is segmentation?

Facilitating a better understanding of the whole marketplace
Understanding the organizational buying behavior
Enabling better selection of market segments that best fit the company’s capabilities
Enabling improved management of the marketing activity

Reasons for segmentation in B2B markets

"Making choices about those segments that should be pursued, and devising the most appropriate strategies for pursuing them" (Brennan et al. 2011)

"Developing a small and manageable number of 'meaningful' business segments" (Laiderman 2005)

Defining targeting
How can we target B2B markets?
What is the need for B2B STP?

No company can afford to serve all their potential customers
Customers whose behavior differs significantly from others need a tailored marketing
STP ensures that sales and customer potentials are exploited efficiently

Reasons for Segmenting, Targeting and Positioning
What is different in business markets?
B2C buyer characteristics:

not very specific about their wants
high likelihood to change habits
more price-sensitive
brand identity is a key point
more individual consumers
decisions are more based on emotions

B2B buyer characteristics:

knowledgeable about purchase
relationships are more long-term
fewer sellers are present
higher sales volume
more persons are involved in the purchase decision (buying center)
decisions have to be based on rational calculations

What is positioning?

"The act of designing a company’s offering and image to occupy a distinctive place in the minds of the target market." (Kotler 2012)

"Positioning is the answer to the question 'What does the product do, for whom, and in place of what?' In this sense, it can be defined as what the product stands for in the consumer’s mind in reference to competition." (Fitzgerald & Arnott 2000)

Defining positioning
What are the key attributes of efficient positioning?
Positioning statements should have:
Two approaches of positioning:
competitive positioning
customer-oriented positioning

A good positioning strategy is influenced by:
Market profile
Size, competitors, stage of growth
Customer segments
Groups of prospects and customers with similar wants & needs
Competitive analysis
Strengths, weaknesses, opportunities and threats in the landscape
Method for delivering value
How you deliver value to your market at the highest level: operational excellence, product leadership, and customer intimacy
Positioning strategy
Profile your market
(a) Document market size, major competitors and how their positioning
(b) Determine the “lifecycle stage”

Segment your market
Define Value Delivery
Evaluate your competition
Stake a position
Select the mindshare you own and record your strategy
Review the components of your market and evaluate what you want to be known for in the future. Design your strategy to be known for this "one thing".
Main Steps of Competitive Positioning
In which field are you best: operational efficiency (the lowest price), product leadership (the best product), or customer intimacy (the best solution & service)
a) List your competitors
b) Rate yourself and your direct competitors

a) Identify areas where your competition is vulnerable
b) Determine whether you can focus on those opportunities
c) Make a decision on how to position your company

Competitive Positioning
Customer-oriented Positioning
What is the perception of the seller in the buying company?


Unique: The only product/service offering with XYZ...

Different: More than twice the (feature) vs. (competitor)

Similar: Sames functionality as (competitor)

How can you figure out what perception your customers have of your brand?

Perceptual Map
Case study
Segmentation Variables
most differentiations: geographic location and kind of tasks
35 variations - 18 non-existing markets = 17 segments

all segments were described in detail

Segmentation Process
attractiveness of the segments was evaluated
criteria used:
- market potential
- stability of political environment or financial resources
- intensity of competition
- kind of autonomous and critical system partners

three segments were more
attractive than the rest
Segment selection and Targeting
Segment Portfolio
adapted from Shapiro/Bonoma (1984)
Brennan (2008), p. 161
Brennan et al. (2011), p. 161
adapted from Kleinaltenkamp/Plinke (2002), p. 219
adapted from Mühlbacher et al. 1994
We provide the greatest variety of products for the Delivery buyers.

We offer the best value for money in the industry for Range buyers.

We are the leading premium seller for Quality fanatics.
B2B STP process is similar in its structure to B2C but the key variables are different.

Segmentation: Consider macro- and micro-factors of the company!

Targeting: Make sure you are choosing the most efficient segments!

Positioning: Do not underestimate this in B2B markets and shape your company's image actively!

For all activities in this context, a detailed market research about your customers, your market, your competitors and your own abilities is inevitable.

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The segmentation funnel
Estimating the attractiveness of a segment
Thanks for your attention!
Company technology
Product and brand-use status
Customer capabilities and strategic type
Purchasing policies
Power structures
Buyer-Seller relationships
Size of the order
Extent to what they share similar views
Processes to search and evaluate alternatives
Approaches to manage risk

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