What variables are used to segment business markets?

Question

Quizplus · Accepted Answer

The Answer is Business markets can be segmented using a variety of variables that help companies identify and target specific groups of customers with similar needs or characteristics. These variables are often used to tailor marketing strategies and product offerings to meet the specific needs of each segment. Here are some of the key variables used to segment business markets:

1. **Geographic Variables**:
- Location (country, region, city)
- Market density (urban, suburban, rural)
- Climate and geographical differences

2. **Demographic Variables**:
- Industry type (SIC/NAICS codes)
- Company size (number of employees, revenue)
- Type of business (manufacturer, wholesaler, retailer)

3. **Operating Variables**:
- Technology (what technologies the business uses)
- User status (non-user, ex-user, potential user, first-time user, regular user)
- Customer capabilities (need for service support, training, etc.)

4. **Purchasing Approaches**:
- Purchasing function organization (centralized vs. decentralized)
- Power structure (who makes decisions)
- Nature of existing relationships (contractual, partnership, transactional)
- General purchasing policies (just-in-time, value analysis)
- Purchasing criteria (price, quality, service)

5. **Situational Factors**:
- Urgency (need for quick delivery)
- Specific application (how the product will be used within the company)
- Order size (bulk orders, small orders)

6. **Personal Characteristics**:
- Buyer-seller similarity (shared beliefs and values)
- Attitudes toward risk (risk-averse or risk-taking)
- Loyalty (strength of relationship with the vendor)

7. **Psychographics**:
- Corporate culture (innovative, conservative, cost-focused)
- Management values (what the leadership team values and prioritizes)

8. **Behavioral Variables**:
- Usage rate (light, medium, heavy users)
- Benefit sought (quality, service, price)
- Buyer readiness stage (aware, informed, interested, desiring, intending to buy)

By analyzing these variables, businesses can develop a clearer understanding of their market and create segments that are meaningful and actionable. This segmentation allows for more precise marketing efforts and can lead to better alignment of products and services with customer needs, ultimately leading to increased sales and customer loyalty.

What Variables Are Used to Segment Business Markets