Mass marketing can work but not always and not in most of the markets. Maruti Suzuki offered it Maruti 800 model for quite a few years in India as part of its Mass Market strategy. It is cost effective marketing as the firm doesn’t need to create offering tailored to different needs in the market. The firm starts losing business by the entry of competitors that offer a product which meets the needs in a better way,

Organisations follow market segmentation strategy to better serve the needs of the market. Market segmentation has the following levels that are practised basis the market opportunity and Business objectives.

1) Segment marketing – Organisations target one or more segments within a market. Each target market is offered a different marketing program. This strategy is referred to as Segmentation Strategy. Buyers with similar buying characteristics and needs are grouped together. Basis the organisations strengths, competitive advantage, and objectives, the firm can venture into a single segment or more. Instead of a single offering for the entire market, a firm offers products based on the different segment requirements.

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Each market offers a unique opportunity for marketers to form segments. As all the customers show different buying behaviour, marketers group the customers in segments to target them via marketing functions. The basic idea is not to serve the entire market but identify a segment that the organisation can best cater to. The marketers identify certain criteria to group customers together. There is not a single way of segmenting the market so the marketers study different variables. Following are the bases/ variables that are mostly followed for market segmentation. An individual in a segment will mostly exhibit the same behaviour as compared to any other individual or individuals in the same segment.

1) Geographic segmentation – the market classification is done basis the geographical area. People in different geographical regions display different characteristics. The division is done basis continents, nations, states, regions, districts. The company needs to cater to the needs as per the preferences of consumers in that region. For example, a coffee maker can advertise throughout the year in cold regions. Similarly, fast food chains like McDonald’s had to introduce vegetarian offerings with local flavours (non-beef, spices, etc.) in countries like India. The marketers also study the population density in the towns and villages to understand and forecast the sales.

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Below steps are mostly followed to segment the market.
1) Segmenting the market using the Segmentation variables. The marketers should clearly define a segment such that it doesn’t exhibit the characteristics of a different segment. The individuals in the group or segment should more or less have common characteristics. For example, a deodorant for male customers will be very different from that needed by females in the market. This will come under segmenting the market using demographic variables, etc.

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Requirements/ qualities of good segmentation as listed below-
As Market Segmentation involves grouping the customers in a market, it is essential that each segment should have certain characteristics to be called a Segment. In order to have effective segmentation of markets, following characteristics should be considered.

1) The segment should be identifiable and measureable in terms of size, purchasing power, etc. The target customers and the non-customers should be clearly defined for proper analysis. There should be data for doing meaningful analysis.

2) The segment should correlate to the organisations objectives and mission.

3) Organisational capability and resources should exist to serve the segment. A segment can be attractive but the organisation should have the resources, capabilities and capital to invest for the segment.

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Organisation not only are sellers but also buyers. The Business Markets includes organisations that buy products on large scale either for production of another product or for their own use. They buy products and add value to the same for selling to Consumers.

These organisations are end users, and buy products and services for their operations. For example, a candy bar producer needs to buy materials to produce and package the candy bar. It needs to buy milk, sugar, preservatives, paper for packaging etc. from suppliers to produce the candy bar.

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There are three major types of buying situations depending on the purchase and its information. (Industrial Buying and Creative Marketing; Boston: Allyn& Bacon, 1967; Ch 2)

(1) New task – The purchase is done for the first time with no purchasing experience, and extensive search is done to evaluate options. The greater the cost or risk involved, more the expertise of decision making participants is needed. For example, an organisation buying raw materials to manufacture laptops for the first time.

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For smooth functioning of the organisations operations, as part of “Strategic Marketing Planning”, responsibilities have to be clearly assigned to departments and managers. Purchasing agents or managers from the purchasing department are mostly involved in straight rebuy or modified rebuy situations. The main responsibilities include-

• Choosing a supplier
• Data collection on goods to be procured (quality, characteristics, expiry, etc.)
• Negotiating price
• Signing of contract

In case of a New Task situation, the decision is mostly taken by experts from different departments- finance, production, marketing, etc. To accelerate the buying process and overcome hurdles of taking approvals in the hierarchy, some organisations have upgraded the position of the manager in purchasing department to the level of Vice President.

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Like consumer buying, Business buying is also affected by many factors. We need to understand all these factors to understand how these factors force an organisation to adopt different strategies in different markets. There are external as well as internal factors that affect the organisational buying like government policies, industrial changes, organisational values, learning of the decision makers, experience, etc. Business Marketers need to understand these factors to design effective marketing strategies.

(1) Environmental Factors – The organisation is greatly influenced by its environment such as Government regulations, Location, industrial development or changes, technological changes, Cultural factrors. Buying centre of the organisation has to adjust to these changes and carefully take decision on purchase of products. Companies sign long term contracts with suppliers to ensue constant supply of materials for production. This also avoids price fluctuations. Various Government policies and regulations also affect business buying. A curb on certain materials by the government forces an organisation to make changes to the product requirements.

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There are common steps involved in Business buying though each organisation has its own way of making decision for buying products. The process may also differ for all the three buying situations – New Task, Modified Rebuy and Straight Rebuy. Below are the common steps involved in Business buying process-

(1) Need/ Problem recognition – in business buying the need or problem arises for a product needed for operation of the business. Business buyers buy products either to take advantage of new opportunities in the market or to find a solution for any issues related to operations.

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Marketing professionals need to understand why people buy the things they do, and how do they arrive at a final decision of buying a certain product from among many at a certain place (retailer, wholesaler, manufacturer, ecommerce, etc.). In order to understand consumer preferences one needs to understand the elements that drive consumer behaviour in the buying process.

Buyer Behaviour is concerned with decision making process of consumers and organisations that purchase products for personal use, or adding value to the product before selling to the final consumer.

Buyers can be final Consumers as well as Industrial buyers.

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