Page 163 - Foundations of Marketing

130 Part 2 | Marketing Research and Target Markets

Type of Organization
A company sometimes segments a market by types of
organization within that market because they often require
different product features, distribution systems, price
structures, and selling strategies. Given these variations, a
firm may either concentrate on a single segment with one
marketing mix (a concentration targeting strategy) or focus
on several groups with multiple mixes (a differentiated
targeting strategy). A carpet producer, for example, could
segment potential customers into several groups, such as
automobile makers, commercial carpet contractors (firms
that carpet large commercial buildings), apartment com-
plex developers, carpet wholesalers, and large retail carpet
outlets.

Customer Size
An organization’s size may affect its purchasing procedures
and the types and quantities of products it needs. Size can thus
be an effective variable for segmenting a business market.
To reach a segment of a specific size, marketers may have to
adjust one or more marketing mix ingredients. For example,
marketers may want to offer customers who buy in large
Courtesy of Sappi quantities a discount as a purchase incentive. Personal sell-
ing is common and expected in business markets, where a
higher level of customer service may be required—larger
customers may require a higher level of customer service
Segmenting Business Markets because of the size and complexity of their orders. Because
Sappi produces high-quality paper products. It segments based on the needs of large and small buyers tend to be distinct, mar-
product use, focusing marketing efforts on companies that produce keters frequently use different marketing practices to reach
design work that requires a high grade of paper.
target customer groups.

Product Use
Certain products, particularly basic raw materials such as steel, petroleum, plastics, and lum-
ber, can be used numerous ways in the production of goods. These variations will affect the
types and amounts of products purchased, as well as the purchasing method. Consider the
advertisement for Sappi, for example. Paper is a product that can be used for a variety of
purposes and targeted at many different markets. Sappi, a producer of high-quality paper,
is targeting its McCoy line of coated papers at businesses that do design work and that care
about crisp colors and paper feel. As part of its marketing strategy, you can see in this ad that
Sappi produces its own educational publication, The Standard , featuring articles on printing
and design. The magazine gives the firm added credibility among its target audience, while
physically showcasing the product, paper.

LO 5 . Know what segment STEP 3: DEVELOP MARKET SEGMENT
profiles are and how they are
used. PROFILES

A market segment profile describes the similarities among potential customers within a
segment and explains the differences among people and organizations in different seg-
ments. A profile may cover such aspects as demographic characteristics, geographic fac-
tors, product benefits sought, lifestyles, brand preferences, and usage rates. Individuals

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