Variables of Segmentation: Industrial Markets

Industrial marketing involves the marketing of goods and services from one business to another. The industrial gods are used in the industry for producing different end products. The segmentation of the Industrial markets takes into account the Size of Industry, Size of company, Location, Infrastructure, purchasing criteria and so on. These variables have been divided into 5 broad categories viz. Demographic variables, Operating Variables, Purchasing approaches, Situational Factors and Personal characteristics. Here is a brief discussion:
  1. Demographical Variables: The demographic variables of Industrial market segmentation include the type of industry, type of the target company, its location. Some marketers target a specific type of industry while some marketers seek a group of industries to target. For example, a company, which produces clutch wires for motorcycles, may target a motorcycle company. On the other hand, a company which deals with multiple products such as Spoilers, GRP Components, GRP Panels, Car Styling Kits, Rear Parcel Shelves, Door Trim Panels, Injection Molding, Azdel Components, Tractor Body Parts etc. will look for a portfolio of target companies such as Automobiles, Trucks and Buses manufacturers, tractors and construction equipment manufacturers, Locomotives and Railways, Defense, Airport furniture manufactures, medical equipment, windmills and so on………
  2. Operating Variables: Operating variables deal with the customer technologies, user and no user or heavy user status, and the customer capabilities.
  3. Purchasing Approaches: Some companies have centralized purchasing while others have decentralized purchasing. Industrial marketing often involves competitive tendering. In this process, the purchasing organization undertakes to procure goods and services from suitable suppliers. This is normally done for high value of some purchases and the purchasing organization shall seek a number of bids from competing suppliers and choose the best offering. This is called strategic procurement. Organizational structure or power structure is also important criteria. This gives an insight into the general purchase policy of the buying organization.
  4. Situational Variables: These variables include the urgency, quick delivery or scheduled delivery of the goods and services. The other criteria may be specific application and size of the order.
  5. Personal Characteristics: Personal selling is very important & effective in industrial marketing because many products need to be customized to suit the requirements of the individual customer. Other criteria are buyer-seller similarity, attitude towards risk and loyalty of a industrial customer.