Market segmentation: industrial market:

The industrial users make up the industrial market. If supermarkets, hospitals, paper manufacturers, etc, purchases were for future use in their industries, we consider them as the industrial users which constitute the industrial market.

The broad, diversified industrial market must be segmented further for a firm to develop effective marketing plans which will enable the marketers to satisfy the industrial needs by supplying the right products and services. We define industrial marketing as the marketing of the producer goods and services for industrial, or producer, good user.

The following classification of the industrial market is useful for the segmentation of the producer goods, market:-

• agriculture, forestry and fishing
• mining and quarrying
• contract construction
• communication, transport and other public utilities
• wholesale and retail trade;
• finance, insurance and real estate
• services
• Government Central Local

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 firms, sales persons 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 and 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.

Geographical Segmentation:

Geographical segmentation of the industrial goods applies if the industries are geographically concentrated. For example firms which process natural resources are located close to the source. This minimises the transport or shipping costs. In Kenya most of the manufacturing companies are located in the industrial area of Nairobi.