Are you thinking about how to segment and identify B2B market segments?

Segmentation caters to effective and precise targeting. The accurate the targeting greater will be the chances for conversions. For B2B professionals the market is fairly broad. Proper segmentation can only be done after understanding the basic categories of your buyers as per certain factors.

Market Segmentation

The target market is divided into particular groups grounded on distinct or similar purchase needs for given products or services. Each segment has different needs and buying behavior. Each audience segment must have the following features in order to be used effectively by the marketer.

• Identifiable: Easily recognizable group within a marketplace.
• Sustainability: The customer group must have profitability in size.
• Accessible: The customer group can be easily reached for marketing and sales communication.
• Responsiveness: The client group should respond to the marketing offers shared by the marketing and sales team.
• Actionable: The customer group can easily take actions upon the guidance shared by the marketing team. Actions like paying money for purchase or use of product or service in a particular manner.

B2B Market Segmentation

Generally when we speak of the market segmentation, B2C frame of market segmentation strikes the mind. However, B2B market segmentation is very narrow scoped as compare to B2C.

Segmentation spot	Description	B2B practices
Demographic Segment	Quantifiable market size is classified according to income of company or entrepreneur	What is the size of company and income of the company? However education, family size etc rarely matters in B2B
Geographic Segment	Region (city or country or town etc)	Which country and regions we have economical buyers in?
Geo-demographic Segment	Combination of geographic & demographic variables.	E.g. Non manufacturing countries like UAE can be good segment.
Psychographics Segment	Lifestyle and personality	In this segment the marketer has to identify sensitive spot for relationship building with the client.
*Behavioral Segment	Need based benefit sought. (Other features of behavioral segmentation are rarely considered in B2B)	1. B2B segments are quality conscious, price conscious, time conscious (delivery). Generally quantity, quality, delivery and convenience as well as less risky payment modes are demanded. 2. The other part is you make separate customer and market profiles with respect to different products and services.
Contextual and situational	B2B clients are approached on different platforms	B2B clients are usually approached online on social media platforms, transaction exchange on whatsapp groups and so on.

In the light of above classification and B2B practices we can draw the following features of B2B market segmentation.

Features

• B2B market segments are usually smaller than B2C target audience.
• The relationship building and personal relationship is critical to succeed in B2B markets. Especially for cross selling and B2B repeat purchase behavior.
• B2B clients are usually longer-term clients.
• When it comes to B2B segmentation there are fewer need-based segments and behavioral segments. Other important B2C segmentation factors are either rarely considered or totally avoided in B2B market.
• Generally B2B segments are based on company and revenue size plus purchasing strength of B2B client.
• It is hard to sustain competitive advantage for 5 years because B2B buyers seek low price and high quality as they opt for bulk purchasing. Therefore, upon finding similar quality products in lower price they switch supplier.

Factors shaping the B2B Segmentation

Generally the B2B market segments are not descriptive and wide scoped like B2C segments. Buyers who belong to B2C segmentation purchase for personal purposes rather than commercial means lower quantity and lower amount involved.

However in B2B markets usually purchase transactions are done on bulk quantities e.g. factories sell bulk quantities of fabric and clothes to wholesalers and distributors as well as importers.

Therefore in B2B market segments are classified with short names or description like:

Price Negotiators: The client who bargain on price where it is hard for the supplier to receive a reasonable profit margin.

Range Clients: The buyers who ask you to drop your MOQ to a certain level or ask you to sell as per their budget.

Delivery Buyers: The buyers who are concerned regarding timely delivery and safety of the products.

Quality Buyers: These buyers do not compromise on quality and will pay the price to the supplier for given quality. It’s an ideal segment for B2B marketers.

Final Thoughts

 B2B buyers are very educated and well-informed about the B2B marketplace. They prefer a product or service that not only benefits in terms of ROI but also caters to their brand image. Lower price but cheap quality may cause them to lose existing customers let alone the new ones. Therefore, quality, quantity and price are the basic considerations of an average B2B buyer.

When it comes to segmentation the audience is classified into groups as per the extent of importance they give to each factor i.e. price and quality. Other than that segmentation based on geographic and demographic factors also plays a crucial role in precise targeting.