■ Organisational/industrial
segmentation techniques
So far this chapter has concentrated on segmentation of consumer markets.
Obviously many companies’ main markets lie in the organisational or indus-
trial sphere. In these markets, companies have to sell products and services
directly to organisational purchasers. There are differences between the type
of segmentation variables used in an organisational market and the ones that
have so far been outlined for consumer markets. The difference in approach
lies in the nature of organisational buyer behaviour.
■ Organisational buyer behaviour
Organisation’s purchase decisions are likely to be more complex because
of the number of individuals and groups involved in the purchase deci-
sion and the possibility of the actual product/service being more expen-
sive and sophisticated. All the individuals that participate in the
decision-making process will have interdependent goals and share com-
mon risks although they may face different systems of reward. What
emerges is a decision-making unit (DMU) made up of all these individ-
uals and groups. Individuals in the DMU will play one of six main roles:
1 Initiator: Identifies a problem that can be overcome by the purchase of
a product or service. An individual in a retail company may, for
instance, identify a problem in the merchandising function of the com-
pany that could be resolved by a new piece of software. (The merchan-
dise function develops the buying plan for a retail company, monitors
sales and product margins amongst other things.)
2 User: Will be the actual user of the product in the merchandising func-
tion of the company in this case. They may well be the initiators
although this role may be someone outside the user group.
3 Buyer: Actually undertakes the negotiation with potential suppliers.
The brief for the technical requirements of the software needed, how-
ever, is likely to come from one of the other areas of the DMU.
Segmentation 73Yuppies Young upwardly mobile professionals
Dinks Dual income no kids
Bumps Borrowed-to-the-hilt, upwardly mobile professional show-offs
Silks Single income lots of kids
Glams Greying leisured affluent middle aged
Jollies Jet-setting oldies with lots of loot Figure 4.16
Acronyms
developed from
lifestyle groupings