B2B macro and micro Assignment PDF

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Address the question below: Some firms choose market segments using only macro bases of segmentation; others use both macro and micro bases for segmenting the market. As a business marketing manager, would you prefer to use only macro bases, or both macro and micro bases for market segmentation? Which factors would you consider in choosing a segmentation method? Support your view using relevant theoretical concepts and illustrations.

Abstract This report is going to establish the reasons why a marketing manager would incorporate both Macro and Micro-segmentation on the market. Through supporting evidence from online research, relevant theoretical concepts and illustration, the report will provide a variety of factors used when considering the segmentation methods. Introduction According to Albert.T.C, segmentation is a central concept for successfully managing the marketing strategies and programs within industrial settings (2003). Business markets consist of characteristics and objectives to which provides a basis for creating marketing strategies to meet the expectations of organisational buyers, thus introducing adjustments and customisation on products and services. The segmentation process consists of two phases to identify organisations objectives. The first phase is micro-segmentation a more broad and generalised process of targeting and analysing. In contrast, micro-segmentation is a more complex procedure conducted for further detailed information on the objective. Further analysis is taken about the two methods through critical theories and providing supporting evidence from secondary sources. Macro-segmentation Macro segmentation is a broader method of targeting a market. As a business marketing manager, the main factors to consider when focusing on these methods would include the size of the market, usage rate, product and service application and geographical location. Its characteristics are centred around the buying organisation and situation. The process would be attractive and applicable to any organisation, depending on the type of business they want to serve or supply. Geographic Geographically, some businesses are influenced by locally sourced goods and services instead of international prospects due to preference and trade agreements between parties or legal standpoint in terms of international standards, and protocols processes may be different. Another sub-factors that can be influenced by geographical stance is the macroeconomic element which is favoured by an organisation. An example is that Ferguson Australia obtains its seafood food from the southern and northern coasts of Australia instead of overseas due to the

type and quality of the product it provides thus selling at a high mark up to international businesses. Size Size is another significant factor as it provides an outline of the organisation’s employees or revenues (Levina, 2010). Different markets have their definitions for small to big companies; thus, it’s imperative to distinguish on the size of the potential market, country, economy to identify if its worthy for further analysis. This factor provides an overview of the level of possible consumption from the company (Levina, 2010). Amazon is an excellent example as they require a significant supplement of packing boxes over a local based postal office. Usage Rate Usage rate is classified on the nonuser and heavy user spectrum (Hutt & Speh, 2016). Ultimately heavy users have more demanding requirements over the lighter and moderate users due to valuing technical and delivering support services. Size of the market and organisations play a significant role when identifying a potential penetration of agreement between organisations. A business may focus on limited clients as a substitute for the number of products or services they may require thus having heavy users may constitute a small percentage of the market yet account for a higher percentage of the total buying power (Kelley & Hyde & Bruwer, 2015). A great example is Rolls Royce manufacturing its Trent 1000 aircraft engines for 20 Boeing 787 Dreamliners aircraft line up. The company produces a limited amount of engines yet own most of the market share within this type of aircraft Product and Service Application The final factors within the macro level are product and service application. According to Hutt and Speh, specific industrial goods are often used in different ways, and the marketer can divide the market based on specific end-use applications (2016). To differentiate an organisation's requirements and to evaluate emerging opportunities and isolation of specialised needs of each user group is identified through the NAICS categorical process. This factor is very significant as it allows the manager to identify new markets and ways of customisation to the organisation or industry. Weir Minerals is a great example which focuses on the mining industry, providing a variety of services and products to assist the industry from manufacturing equipment, classification, separation of minerals to slurry transportation. Micro-segmentation Segmentation variables used to define micro-segments are essentially behavioural variables related to the members form the decision-making unit (Alina, 2012). A higher degree of knowledge is required to conduct this process. This method focuses on the characteristics of the decision -making units within each micro-segmentation such as the buying Key criteria, perceived importance of the purchase, and attitudes toward vendors (Hutt & Speh, 2016). This stage focuses on gathering information by soliciting input from the sales force and particular marketing segmentation. Key Criteria

Key criteria is a significant component when identifying a segmentation as it allows the marketer to recognise an organisation’s point within the purchase decision spectrum. Through extensive research, the marketer can place each organisation into their respective groups which enable the business to identify what their product or service can serve. According to Hutt & Speh, many supplier profiles appear to prefer high quality, prompt delivery, the premium price versus standard quality and low prices (2016). As a marketer, the main objective is to understand what each organisation is trying to achieve for its target market. As a result, the firm must be able to alter its marketing mix for its clients (Chand, 2012). For example, Ferrari wouldn’t outsource their car seats fabric from china due to their business brand position of luxury sports cars as Italian fabrication is recognised as a status symbol over importing from china, a more cheap and lower quality region. Therefore prospects wouldn’t aline with the organisation’s goals; thus by segmenting groups on a micro-level analysis will assist the business in identifying potential firms that they may be able to collaborate. Purchasing Strategy Purchasing strategy is also another factor a marketer should focus on as this method allows microsegments to be classified according to an organisation’s purchasing strategy (Hitt & Speh, 2016). Depending on their business objectives, a business may seek one or two primary suppliers for their products with further customisation within their agreements to satisfy their business process or position. A great example can be seen within the E-commerce industry, accurately drop shipping. This method allows the business to transfer orders directly to suppliers and then supplier sends the product straight to the customer; thus, e-commerce business doesn’t hold inventory, therefore, decreasing fees. As a result, the supplier may have a TQM department which focuses on Quality checking of the product, thus providing extra value. Organisation Innovativeness As a marketing manager, the final factor that l would incorporate within the segmentation on a microlevel would be Organisational innovativeness. According to Hutt & Speh, it’s when organisations are more innovative and willing to purchase new industrial products than others (2016). This factor enables marketers to discover subgroups that must be targeted first during a new product or service introduction. By identifying the subset, the market is then able to alter the customisation of the products or service to produce the best appliance for organisations. As a result, the customisation will benefit the marketing organisation through a competitive agreement between firms. An example of innovativeness is the competition between Apple and Samsung with the phone industry where both companies focus on identifying the new innovative product which can improve their devices. I.e. introduction of the gorilla glass on smartphones or new intel processors for a laptop for improved performance. Each of these factors require a different marketing approach for the company which results in the suppliers selecting the target segments that are considered to be profitable in terms of its specific market activity (Verhallen, Frambach & Prabhu, 1998). As a result, micro bases can have many more direct marketing implications (Morris & Pitt & Honeycutt. Jr, 2001). Information required to conduct micro-segmentation is challenging to acquire as its usually identified during the next marketing research stages such as survey, in-depth interviews. Microlevel cost time

and money which other businesses may not have as a result may not require that level of detail —therefore leading their focus more on the Macro level. Organisations identify a need for a more detailed analysis at the micro-level once the costs of direct marketing research programs on macro segmentation show growth potential. Conclusion As a result, the marketing manager’s selection of segmentation mainly depends on the organisation’s objectives and market size. Ultimately firms who choose to use both Macro and Micro-segmentation will have a deep understanding of their market and customers. An analysis within this report about the factors considered allows us to understand why a business marketing manager would incorporate both of the segmentations. References Albert, T 2003, Industrial Marketing Management 4th edn, University of Hartford, West Hartford. Alina, F 2012, Marketing segmentation : Fundamental process in business to business 3rd edn, Bucharest. Chand, S 2012, "Macro and Micro Segmentation: Variables for Segmenting Organizational Markets", Your Article Library, viewed March 19 2020, . Hutt, M & Speh, T 2016, Business Marketing Management B2B 12th edn, Cengage Learning. Kelley, K & Hyde J & Bruwer J 2015, "Usage rate segmentation: Enriching the US wine market profile", Dovepress, viewed March 29 2020, . Levina, O 2010, Business to Business Market Segmentation, Mikkelin Ammattikorkeakoulu, Mikkeli, viewed March 12 2020, . Morris, M, Pitt, L & Honeycutt, Jr, E 2001, Business to Business Marketing : A strategic Approach 3rd edn, SAGE, Thousand Oaks. Verhallen, T, Frambach, R & Prabhu, J 1998, Industrial Marketing Management :StrategyBased Segmentation of Industrial Markets 4th edn,....