Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/e- Business and
Organizational Customers
and Their Buying Behavior
Text © The McGraw−Hill
Companies, 2002206 Chapter 7
The products an industrial customer needs to buy depend on the business it is
in. Because of this, sales of a product are often concentrated among customers in
similar businesses. For example, apparel manufacturers are the main customers for
buttons. Marketing managers who can relate their own sales to their customers’ type
of business can focus their efforts.
Detailed information is often available to help a marketing manager learn more
about customers in different lines of business. The U.S. government collects and
publishes data by the North American Industry Classification System (NAICS) codes—
groups of firms in similar lines of business. (NAICS is pronounced like “nakes.”) The
number of establishments, sales volumes, and number of employees—broken down by
geographic areas—are given for each NAICS code. A number of other countries col-
lect similar data, and some of them try to coordinate their efforts with an international
variation of the NAICS system. However, in many countries data on business cus-
tomers is incomplete or inaccurate.
The NAICS is a recent development. The U.S. adopted it as a standard in 1997.
However, it is being phased in over time. The phase-in makes it easier to use the
system because in the past data were reported using Standard Industrial Classifica-
tion (SIC) codes. Many of the codes are similar; check the website at
http://www.naics.com for details. However, the move to the new system should help busi-
ness marketers. The NAICS system is suited for identifying new or fast-changing
industries—and for marketers that spells opportunity. NAICS is also more detailed
than SIC and works better for services such as financial institutions, health care
providers, and firms in the entertainment business. The general logic of NAICS and
SIC is similar. So let’s take a closer look at how the NAICS codes work.
The NAICS code breakdowns start with broad industry categories such as
construction (23), manufacturing (31), wholesale trade (42), finance and insurance
(52), and so on. Within each two-digit industry breakdown, much more detailed
data may be available for three-digit industries (that is, subindustries of theA firm like Alcoa Aluminum is likely to find that the majority of its customers are concentrated within a few industries that it can
identify by Industry Classification System code number.
Business data often
classifies industries
Internet
Internet Exercise Comprehensive information about NAICS codes is avail-
able online (www.naics.com). At the website select “Find Your NAICS Code”
and when the search page appears submit a query for the keyword “weld-
ing.” If your firm was interested in selling its lasers to manufacturers of laser
welding equipment, what is the NAICS code of the industry for which you
would want to get a list of manufacturers?