For business-to-business (B2B) enterprises, market segmentation process can be a powerful tool for tactical and strategic applications under growing pressure to better target prospects and customers. Market segmentation strategies have enjoyed extensive acceptance in the consumer world for decades. However, B2B market segmentation process has weakened due to several factors like marginal technical expertise, limited availability of accurate data, poorly differentiated advertising, and inability to develop high-quality leads. But with the rising income and middle-class population globally, business to business enterprises can no longer ignore the B2B market segmentation process.
Buyers seeking customized products, customer support, and attention and are forming very specialized markets. This scenario was earlier seen in consumer markets only, but it has now developed into the B2B market as well. In fact, market segmentation strategies are something that enterprises in B2B can no longer ignore and expect to achieve positive results. However, there are some critical challenges B2B enterprises face with a viable market segmentation process. Are these challenges different from the ones experienced in consumer market segmentation and If yes, then how? what are the possible solutions? In this article, we have tried to answer all such questions.
Challenges in B2B Market Segmentation Strategies
Challenge #1: Dealing with highly complex B2B markets
Decision-making in B2B markets is quite different from decision-making in consumer markets. In the B2B market, buying decisions are normally complex with rules that are intertwined and made by different individuals with varying levels of authority while in consumer markets decisions are simply made by one individual or several individuals. Furthermore, potential buyers in B2B markets are oblique, multifaceted, complex, and ephemeral. This creates a dilemma in formulating market strategies for B2B enterprises. In simple terms, it is difficult to identify who exactly is the target buyer and who we should segment in the B2B market segmentation process.
Challenge #2: Buyers in B2B market are more rational
Buyers in B2B markets are more rational and therefore, to devise market segmentation strategies here, one needs to pay attention to the need of the business rather than segmenting based on consumer segmentation audiences. This poses the challenge; it becomes important for enterprises to identify what drives customers’ needs and because businesses are not individuals, this is not too easy, yet it is the only viable option.
Challenge #3: Complexity of B2B products
In B2B markets, products are usually tailored and that is why making market segmentation strategies success is very difficult in these markets. Additionally, each product bought by a business is rarely being used in isolation, in most cases, it is only a part of a larger system. This has made it mandatory to include experts in the market segmentation process of these markets which makes the whole process expensive. However, in B2B markets, there is a small section of customers who are important enough that they actually rise behind the setback of B2B market segmentation process. They need to be regarded as a unique segment with their own specific needs. Otherwise, they will walk away, and the firm will incur a huge loss.
With the years of expertise in market intelligence services, Infiniti research help businesses to measure the effectiveness of a marketing campaign, identify the most profitable market segments, analyze changes in market expectations, and also devise value maximization market segmentation strategies to enhance their shares. Also, through market segmentation solutions and need analysis, Infiniti helps businesses to gain actionable insights into expanding, diversifying, and tackling market competition.
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