Business to Business Marketing Segmentation Analysis Essay

This essay examines business-to-business (B2B) market segmentation, addressing the choice between macro and micro bases for segmentation and the factors influencing this decision. It delves into the concepts of macro-segmentation, which classifies markets based on organizational and industry variables such as size, location, and industry type, and micro-segmentation, which divides customers into groups based on demographics, geography, behavior, and lifestyle. The essay argues in favor of micro-segmentation, emphasizing its ability to provide in-depth knowledge of target customer groups, enabling the development of tailored marketing strategies and cost-effectiveness. It acknowledges the limitations of macro-segmentation, such as its higher cost and broader focus, and highlights the benefits of micro-segmentation in identifying specific needs and demands of niche segments, leading to more effective product offerings and strategic planning. The Nike and Tata Motors examples are used to illustrate how these segmentation methods are applied in practice, and the essay concludes with a recommendation for marketing managers to prioritize micro-segmentation for its ability to achieve a deeper understanding of the target market and the development of effective marketing plans.

RUNNING HEAD: BUSINESS TO BUSINESS MARKETING
BUSINESS TO BUSINESS MARKETING
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Author’s Note:

1BUSINESS TO BUSINESS MARKETING
There are several reasons for which a business organisation expands its business at an
international level. To maximise market share and revenue a business organisation expand its
business. Business expansion at an international level can help a company to diversify its assets.
To maintain positive revenue growth, business organisations use the global market to launch
unique goods and services. Expansion at the global level can provide certain benefits to a
company which are a new market, diversification of assets, access to talent, competitive
advantage and FDI opportunities. Senior executives of every business organisation have the
responsibility to analyse the market segment before investing. A proper market segmentation
procedure can help the management team of a company to get a clear idea about the segment. To
gain a competitive advantage and boost market share by targeting the specific market segment,
the expansion procedure of a company can be successful. The company can easily achieve
business objectives. This paper aims to analyse which market segmentation is necessary for a
business organisation. A business marketing manager has the responsibility to choose between
macro bases or micro bases or both these two market segmentation is suitable for the company.
Before expanding the business at an international level a business organisation has to
identify its target market and develop the strategic plan according to the target market. There are
certain methods which are used by the business organisation for the classification. Macro-
segmentation marketing, Micro-segmentation marketing and both Macro and Micro-
segmentation marketing are those methods (Cross, Belich and Rudelius 2015). Which method
will be chosen as a market segmentation method is depends on the certain variables which are
the size of the market, product, services, and financial condition of the company. Based on these
variables, the marketing manager has the responsibility to conduct market segmentation.
However, it can be said that the success of a business organisation depends on applying the

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appropriate market segment method. It will help the company to get a clear idea about the
targeted customer group. By knowing the demands and wants of the targeted customer group, a
business organisation can offer the most appropriate products to the targeted market segment.
In this part, micro-segmentation marketing will be analysed. It is through the process of micro-
segmentation that helps modern marketers to apply a knife age method to the target market. With
the help of this method, the customer segments of a market can be analysed. Based on several
specific characteristics customer groups are divided into groups (McDonald 2015). In this
process, customer groups are divided further into four groups which are demographics,
geography, behaviour and lifestyle. For the demographic market segmentation procedure, the
marketing team analyse certain demographic factors which are income, gender, Job, and life
cycle (Tkaczynski 2017). For the geography-based micro-segmentation marketing, customers are
divided at first into the region, then states, then cities and lastly neighbourhoods. For the
behaviour based micro-segmentation marketing, the marketing team analyse certain factors
which are coupon only purchases, frequent purchases, and seasonal only purchases (Rupp, Kern
and Helmig 2014). Fashion-conscious, tech-savvy, adventurer, and traveller are those factors
which are analysed for Lifestyle based micro-segmentation marketing (Weinstein and Cahill
2014). By using micro-segmentation marketing, the marketing manager of a business
organisation can achieve heart in advantages. This segmentation allows a business organisation
to provide all directive efforts to a specific market segment and identify their needs and
demands. This method is cost-effective. In comparison with other marketing efforts, micro
marketing segmentation needs comparatively less amount of money. The growth in micro-
marketing strategies is user-generated. There are certain disadvantages to this procedure. Though
this process targets directly to a specific market segment yet developing this marketing strategy

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is time-consuming. Even a good amount of time is needed to spread this strategy. This marketing
segmentation targets a specific group while there is a chance that the business organisation will
miss its focus on a wide range of market segment. The officials of Nike, which is a business
organisation that produces sports accessories, has segmented its consumer into four categories.
For demographic segmentation, this company identifies different age group, gender and financial
status of the consumers. This company offers products for both men and women between the
ages of 15 to 55 years. For Geographic segmentation, this company has launched different
products for different countries, which will fulfil the needs of the local customer. This company
has to follow this strategy because of its worldwide business. For psychographic segmentation,
this company offers various products, which can fulfil the interest of the consumer. To fulfil the
interest of the young adult consumer, this organisation offers a trendy, stylish and high-quality
product. For behavioural segmentation, products of this organisation offer an active lifestyle with
comfortable sports accessories, footwear and clothing.
In this part, Micro-segmentation marketing will be analysed. This method is used to
recognise the product markets. In the Macro segmentation marketing, the targeted market is
classified based on variables with product scope like organisational variables and industry
(Budeva and Mullen 2014). Variables of macro segmentation marketing are the size of an
organisation, location and the industry. This segmentation method analyses the size of an
organisation. A large business organisation purchases the same product in a different way. By
following a formal purchasing procedure, large organisation buy a huge volume of products.
However, the large organisation demands maximum discounts and services (Powers & Sterling
2008). However, a company should not ignore small customers. This market segmentation
method analyses the industry in which the business organisation operates. Every industry has a

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certain demand for the product. So a business organisation must conduct an in-depth analysis of
the industry in which the company will operate. Because this company has to same product to
different customer in a different way. The buying practices and need may vary country wise. So
before investing it is necessary to analyse the geographic segmentation (Craft and Hassan 2015).
To deliver the relevant experiences to the consumers, Macro-segmentation is an efficient
method. For example, Tata Motors producers trucks. While entering a foreign market, the
officials of this company analyse the needs of the customers, the size of the targeted market, and
the location of the market. Based on these variables, the officials of this organisation offers
specific products in a country.
In this part, both macro and micro-segmentation marketing will be analysed. In this part,
both macro and micro bases for market segmentation will be analysed. The marketing manager
of a business organisation can take a sequential approach to market segmentation. In this
approach, both micro and micro bases for market segmentation is utilised. In this method, the
marketing manager analyses every possible option by utilising Micro-segmentation marketing. In
this part, the marketing manager analyses the organisational variables and industry. After
conducting the Micro-segmentation marketing manager identify the target segments (Wright,
Wright and Kooli 2016). The marketing manager conducts micro-segmentation marketing to
target specific market segments. In this part, the marketing manager analyses demographic
variables of the market, geographic variable of market, behaviour variable of the market and
lifestyle variable of the market. By using this approach, a business organisation can achieve in-
depth knowledge about the targeted segment.
This it can be recommended that the marketing manager of a business organisation
should utilise Micro bases segmentation to get in-depth knowledge about the targeted customer

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group. There are certain reasons for which Macro bases segmentation and both Macro and Micro
bases segmentation is not recommended. First of all, in comparison with micro basis
segmentation macro bases segmentation is comparatively costly. Secondly, Macro-bases
segmentation analyses a wide area. Thirdly both Macro and Micro bases segmentation is difficult
to conduct. The modern business has been becoming more complex. That is the reason Micro
bases segmentation method is recommended. This segmentation procedure will be allowed this
business organisation to develop a strategic plan which specifically targets the chosen market
segment. By analysing four variables of this segmentation, which are demographics, geography,
behaviour and lifestyle, the management team of the company will identify the needs and
demands of the targeted segment. Based on gender, ethnicity, age, location, the wants and needs
of the target customer groups will be identified. Do this segmentation method is time consuming
get it can be said that was a long-term benefit of business organisation can utilise this
segmentation method. This segmentation method will allow this company to target the niche
segments. As this method will allow a company to get a clear idea about the demands of the
target customer segment. So it can be said that the company can easily provide accurate products
which will fulfil the need of the targeted customer group. To conduct this segmentation method,
a company has to spend less amount of money. So it can be said that this is a cost-effective
method for market segmentation. That is the reason the marketing manager of a business
organisation should choose Micro bases segmentation to classify the target market.
Thus it can be concluded that the marketing manager of a company can use Micro bases
segmentation method for the classification of the market. It will help a business organisation to
collect necessary information about the targeted market segment. This procedure will be useful
for a company to understand the needs, demands and wants of the targeted market segment.

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Before expanding the business at the international level, the management team of a business
organisation should conduct the market segmentation procedure.

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References:
Budeva, D.G. and Mullen, M.R., 2014. International market segmentation. European Journal of
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Craft, S.H. and Hassan, S.S., 2015. Global consumer market segmentation strategy decisions and
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Cross, J.C., Belich, T.J. and Rudelius, W., 2015. How marketing managers use market
segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing Science
(AMS) Annual Conference (pp. 531-536). Springer, Cham.
McDonald, M., 2015. Market segmentation. Wiley Encyclopedia of Management, pp.1-10.
Powers, T.L. & Sterling, J.U. 2008, "Segmenting business-to-business markets: a micro-macro
linking methodology", The Journal of Business & Industrial Marketing, vol. 23, no. 3, pp. 170-
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Rupp, C., Kern, S. and Helmig, B., 2014. Segmenting nonprofit stakeholders to enable successful
relationship marketing: A review. International Journal of Nonprofit and Voluntary Sector
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Tkaczynski, A., 2017. Segmentation using two-step cluster analysis. In Segmentation in social
marketing (pp. 109-125). Springer, Singapore.
Weinstein, A. and Cahill, D.J., 2014. Lifestyle market segmentation. Routledge.
Wright, L.T., Wright, R. and Kooli, K., 2016. Business marketing concepts and cases. Journal of
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