Business-To-Business (B2B) Customer Segmentation Is

¶ … Business-to-Business (B2B) customer segmentation is significantly more complex than its Business-to-Consumer (B2C) counterpart, as the former often has much longer sales cycles and greater complexity of roles in the buying process. B2B market segments for enterprise software meet the five criterion for segmentation including being identifiable, accessible substantial, representing unique needs and durable (NetMBA, 2010).

Enterprise software segments can also be clearly delineated by the type(s) of software being purchased, including analytics, Customer Relationship Management (CRM), Enterprise Resource Planning (ERP, Supply Chain Management (SCM) and Service Lifecycle Management (SLM). Of these many types of enterprise software, the most clearly defined market segment is Enterprise Resource Planning (ERP) as it is used to unify so many functions across an organization (Shin, 2006).

Demographics and Psychographics of the B2B Software Market Using secondary research including empirical studies of purchasing patterns for ERP systems, the following profile of demographic and psychographic characteristics have been defined. The B2B market segment for ERP systems is dominated by executives who are given the responsibility of managing very large, complex information technology (it) infrastructures. Their titles include Chief Information Officer (CIO), Director of Information Technology (it), and Vice President, Computing Infrastructure.

These are the most common titles that are seen in empirical studies of the B2B market segments' buying processes for ERP systems (Lindley, Topping, Lindley, 2008) (Shin, 2006). These executives are given the responsibility of making it systems a strategic platform for the future growth of an enterprise (Nejmeh, 1994) and are also often highly skilled in the development of complex costing and pricing models to measure the Return on Investment (ROI) of specific it initiatives (Lindley, Topping, Lindley, 2008).

From a demographics standpoint the majority of them are male, between 45 and 54 years of age with the next generation of CIOs being in the 35 -- 44 age group (Shin, 2006). 46% of this market segment have attended college and 21%, graduate school (Lindley, Topping, Lindley, 2008). The majority of them are affluent given their senior-level roles in the enterprise as well, with many earning over $150,000 a year or more. SAP AG is a market leader in the area of enterprise software in general and ERP specifically.

Using the free online research tool Quantcast.com to analyze the demographics of the web traffic to SAP.com the website for SAP AG, validation of the demographics of the market segment has been achieved. Please see the results of this demographic analysis in Appendix 1. From a psychographics standpoint the needs of this market segment are first and foremost on learning about emerging technologies that can deliver greater cost reductions over time.

This is an essential requirement of their roles in an organizations s they progress to more senior positions over time (Nejmeh, 1994). Mastery of complex software is a critical aspect of how members of this market segment continually improve their marketability and also gain greater options for career transitions into senior management. In selling to this segment, it is imperative to not just sell at them, but to educate them through a series of useful interchanges.

One of the most critical areas of all for these professionals is knowledge of Software-as-a-Service (SaaS) and cloud computing, and how it relates to the financial performance of their organizations (Jacobs, 2005). There is also a critical need for understanding and gaining mastery on how entire series of cloud platforms are used for managing an entire enterprise as well, specifically in the area of virtualization and cloud-based performance management (Mladenow, Kryvinska, Strauss, 2012).

From a psychographic standpoint these factors are what motivates members of this market segment as these senior managers often see knowledge as currency they can trade with in their careers. Marketing Opportunities The marketing opportunities to this market segment then center on creating a highly effective series of programs for providing knowledge and intelligence to these C-level and VP-level executives. There is also the need for providing them with insights into how they can save on the.