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B2B Market Segmentation Day 2/Part 2

Deirdre Mathelin Feb 2010

B2B Market Segmentation MicroSegmentation

Deirdre Mathelin Oct 2009

Micro-segmentation
More intimate knowledge of potential customers Purchasing approach
How a company is organized to buy

Situational Factors Personal Characteristics of Buyers

Purchasing Approach
Purchasing Organization
Separate or centralized procurement? Know who to approach

Power Structures
Relative influence of different departments, e.g. target communications at key department

Purchasing criteria
Purchase price, technical performance, quality, continuity of supply, etc

General Policies
Vendor rating, accreditations, etc

Buyer Characteristics
Buyers are human What drives their buying behaviour? Can segment based on buyerseller match Time-consuming and therefore expensive to manage Exclusively for key customers

B2B Market Segmentation The Business Relationship

Deirdre Mathelin Oct 2009

B2B Relationships
Personal Selling Sales Responsibilities Sales Functions Acquiring New Customers and Winning Orders Building Relationships Sales Organization

Personal Selling
Business Marketer and customer communicate to work out product requirement Negotiation of adjustments to supplier’s product offer to meet customer’s needs Interaction at different levels in the organization to initiate, develop and handle the relationship Any employee who interacts directly with managers from a customer company add to that customer’s experience of the supplier

Sales Responsibilities
Identify and secure revenue-generating opportunities: Supplier needs to match customer’s needs with product offering May need to improve the product offering or suggest sourcing, cost or productivity solutions Represents the supplier to the customer and the customer to internal team Maintains customer files and feeds back information into the company Principle point of contact to handle questions, complaints, etc Assumes responsibility for response to customer

Sales Functions
Different types of sales functions
Business Development:
Create business by influencing individuals who can select suppliers Do not usually try to secure orders

Frontline Sales People:
Win orders from existing customers Target new ones Review and renegotiate contract

Sales Administration
Order processing Accurate and timely deliveries Main role is to fulfil orders

Acquiring New Customers and Winning Orders
Lead Generation
Direct mailing, trade shows, advertising

Prospecting
Qualify the lead (value/volume, KDM, funding, etc) Database

Call/Meeting Preparation
Set clear objectives Good product knowledge Ability to communicate product match to customer’s needs

Selling
Set customer priority Deal with objections & close the sale

Order Fulfilment
Negotiate the contract Deliver the product (co-ordinate & communicate internally)

Building Relationships
If new client demonstrates viable long term prospects Business marketer:
Builds on-going relationship Aims to win repeat business

Sales person:
Oversees ongoing contract Acts on feedback Scopes & negotiates more of a share of customer’s requirements Responds and helps resolve customer’s sourcing problems Monitors company for new product opportunities Negotiates new contracts

Sales Organization
There are a number of ways in which a company can organize its sales force
Geographically based
Simple/Few products and customers have common needs

Product based
Diverse range of products

Customer based
Same basic technology, but customized for specific customers

Key Account Management
Technically demanding, teacher-customers Provide critical resources to vendor Account for significant % of revenue

B2B Market Segmentation Conclusion

Deirdre Mathelin Oct 2009

So What Did You (hopefully) Learn? B2B Market Structure The B2B Customer
Team, process

B2B Market Segmentation
Macro/Micro

Market Segment Evaluation and Target Selection Customer Relationship Management Sales Function and Organization


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