Marketing Strategy and Competitive Positioning pdf ebook

Company technology
The customer’s stage of technology development will impact directly on its manufacturing 
and product technology, and hence on its demand for different types of product. Traditional 
factories operating mixed technologies and assembly methods require different product and 

---

191
SEGMENTING BUSINESS MARKETS
sub-assembly inputs (such as test equipment, tooling, components) compared with the auto-
mated production unit. High-technology businesses may require very different distribution 
methods – Tesco requires suppliers to have the capability to cooperate in electronic stock control 
and cross-docking to avoid retail stockholding. Increasingly, high-technology firms require that 
their suppliers are integrated to their computer systems for all stages of the purchase process.
Customer capabilities
Business customers may differ significantly in their internal strengths and weaknesses, and 
hence their demand for different types of product and service. For example, in the chemicals 
industry customers are likely to differ in their technical competencies – some will depend 
on their suppliers for formulation assistance and technical support far more than others. 
For many years in the computer business, Digital Equipment specialised in selling mini-
computers to customers who were able to develop their own software and systems, and did 
not need the full-service offering of IBM and others; it targeted a segment on the basis of 
the customers’ technical strength in computing.
Purchasing organisation
How customers organise purchasing may also identify important differences between custom-
ers. For example, centralised purchasing may require suppliers to have the capability to operate 
national or international account management, while decentralised purchasing may require 
more extensive field sales operations. Depending on a supplier’s own strengths and weak-
nesses, the purchasing organisation type may be a significant way of segmenting the market. 
IBM, for example, has always maintained a strong position in companies with a centralised 
IT department, while other suppliers have focused on companies where IT is less centralised.