Marketing Strategy and Competitive Positioning pdf ebook

Industry type
Factors such as the Standard Industry Classification (SIC) provide a first stage of analysis, 
both for identifying target industries and subdividing them into groups of companies with 
different needs or different approaches to buying. This may be the basis for vertical market-
ing to industry sectors. Retailers and hospitals, for example, both buy computers, but they 
have different applications and different buying strategies.
Company size
Size may also be highly significant if, for instance, small companies have needs or buying 
preferences that are distinctly different from those of larger companies. Typical measures 
would be variables such as number of employees and sales turnover. Size may be very sig-
nificant because it impacts on issues such as volume requirements, average order size, sales 
and distribution coverage costs and customer bargaining power, which may alter the attrac-
tiveness of different segments as targets. Company size may be analysed alongside other 
demographics. Companies, for example, selling ingredients for paint manufacture in the 
United Kingdom could initially segment the market by SIC to identify paint manufactur-
ers, then by size of company as indicated by number of employees (there are only seven 
companies employing more than 750 employees and together they account for over 60 per 
cent of the paint market).
Customer location
The geographic location of customers may be a powerful way of segmenting the market 
for a business product for several reasons. Domestically, location will impact on sales and 
distribution costs and competitive intensity may vary if there are strong local competitors 
in some regions. Increasing concerns over the carbon footprint of sourcing are leading some 
firms to concentrate their supply, where possible, more locally. For example, leading super-
markets such as Waitrose have developed policies to source as many fresh food products 
locally as possible.
Product demand may vary also – the demand for chemicals for water softening in operat-
ing cooling equipment in factories will vary according to local water hardness conditions. 
Internationally, product preferences may also be different by location – medical diagnostic 
products are sold to the National Health Service in the United Kingdom, but to private 
testing agencies and medical practices in the United States, and to hospital laboratories in 
the developing world, all of whom display very different product and price requirements.