Demographical Segmentation:

This is like in the case of consumer market segmentation. The industrial firms can be segmentation according to their sizes (e.g. based on sales volumes or number of employees). The type of business can also be used, eg. firms which sell to other industrial firms can be considered. The segmentation can be based on type of customer, size of customer and type of buying situation.

• Type of customer: customer types can be identified by using the standard industrial classification called SIC. The SIC codes have two-digits, three-digits and four-digits which help to identify industries plus sub-classes of each industry. The information is available for the industrial or business targeted markets.

This is regarding the number of firms, their sizes, locations, etc.

• Size of customer: The size of customer is measured by some factors eg. sales volume, number of employees, number of production facilities and number of sales offices. Many marketers divide their customers into large and small accounts. They use distribution channels to reach the segments. For example, the firm's salesperson handle their large accounts while the small accounts are left for the firm's agents or intermediaries.
• Type of buying situation: A business or industrial buyer modifies his market segments into (I) new buy, (ii) straight rebuy and (iii) modified rebuy. These have been discussed previously under section 10 (I,ii,iii) above.
• Other bases of segmentation: Many bases which were discussed in chapter 6 under consumer market segmentation are also relevant to segmenting the industrial or business markets.