Business buyer segments and market classification

Business Buyer Segments

Evaluating the various market segments that would purchase a product for business use, the defining strategies to addressing the unmet needs of one of these segments from a consumer-based strategy is the intent of this analysis. For purposes of example, Herman Miller's line of high-back office chairs serve as the product that defines each specific segment. From this segmentation analysis a strategy is defined for a consumer-based chair manufacturer looking to address the unmet needs of one of the segments.

Office Chair Market Segments

As business-to-business (B2B) customer segments are much more oriented towards the long-term, they rely much more extensively on relationships than on price or product features alone. As a result, the following segments are not driven by transactions alone; they look to Herman Miller for support, services and lowering their total cost of ownership for the chairs over five to seven years, the period they are depreciated against for accounting purposes.

The first segment are the large-scale enterprise accounts, who often purchase between 100 and 500 chairs for populate new facilities, refurbish existing ones, or redesign acquired companies to match their company standards. This enterprise segment is volume- and relationship-based and often is sold to through a direct sales channel, with Herman Miller account executives calling directly on the company. This segment demands a high degree of customization as well, and has preferences for fabrics, colors, and specific design criteria of chairs as well. A second market segment is those mid-size companies who purchase between 35 to 100 chairs a year, and often prefer to work with local resellers they already know and trust (Dieckmann, 2007). As a result, this segment does not expect to get too much customization and often buys the chairs that are in stock at the local distribution location. The third category is the small business, who in many cases cannot afford a single chair from Herman Miller due to the high price relative to incomes of these smaller companies. The famous Aeron chair for example, a favorite for large-scale enterprises is often too expensive for the small business owner. Instead of this high-end chair, small business owners look at the stand, off-the-shelf chairs for their offices.

Capturing a Business-Based Segment Through Consumer Marketing