Page 222 - Foundations of Marketing

Business Markets and Buying Behavior | Chapter 7 189

Table 7.2 Examples of NAICS Classifi cation

NAICS Hierarchy for AT&T Inc. NAICS Hierarchy for Apple Inc.

Sector 51 Information Sector 31–33 Manufacturing

Subsector 517 Telecommunications Subsector 334 Computer and Electronic
Manufacturing
Industry Group 5171 Wired Telecommunication Carriers Industry Group 3341 Computer and Peripheral
Equipment Manufacturing
Industry Group 5172 Wireless Telecommunications Carriers

Industry 51711 Wired Telecommunication Carriers Industry 33411 Computer and Peripheral
Equipment Manufacturing

Industry 51721 Wireless Telecommunications Carriers

Industry 517110 Wired Telecommunication Carriers U.S. Industry 334111 Electronic Computer
Manufacturing

Industry 517210 Wireless Telecommunications Carriers
Source: NAICS Association, www.census.gov/eos/www/naics/ (accessed February 12, 2013).

sources, marketers isolate business customers by industrial classification numbers, determine
their locations, and develop lists of potential customers by desired geographic area.
A more expedient, although more expensive, approach is to use a commercial data service.
Dun & Bradstreet, for example, can provide a list of organizations that fall into a particular
industrial classification group. For each company on the list, Dun & Bradstreet provides the
name, location, sales volume, number of employees, type of products handled, names of chief
executives, and other pertinent information. Either method can effectively identify and locate
a group of potential customers by industry and location. Because some companies on the list
will have greater potential than others, marketers must conduct further research to determine
which customer or customer group to pursue.
To estimate the purchase potential of business customers or groups of customers, a
marketer must find a relationship between the size of potential customers’ purchases and
a variable available in industrial classification data, such as the number of employees. For
example, a paint manufacturer might attempt to determine the average number of gallons
purchased by a type of potential customer relative to the number of employees. Once this rela-
tionship is established, it can be applied to customer groups to estimate the size and frequency
of potential purchases. After deriving these estimates, the marketer is in a position to select the
customer groups with the most sales and profit potential.
Despite their usefulness, industrial classification data pose several problems. First, a few
industries do not have specific designations. Second, because transferring products from
one establishment to another is counted as a shipment, double-counting may occur when
products are shipped between two establishments within the same firm. Third, because the
Census Bureau is prohibited from providing data that identify specific business organizations,
some data, such as value of total shipments, may be understated. Finally, because government
agencies provide industrial classification data, a significant lag usually exists between data-
collection and the time when the information is released.

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