Segmentation Influences the Definition of

¶ … segmentation influences the definition of organizational buyers and consumers, the product attributes they identify with and expect, and finally how distribution channels emerge to serve these customers. To focus this analysis a new travel service is being planned that combines international business and leisure travel, where for example a business person can complete their work in a given country and then stay over for a week to sightsee and visit tourist sites and locations.

This is a unique service and its customer focus is useful for framing any discussion of segmentation strategies. Segmentation criteria have a direct impact on the target market selection and the organizational buyers and consumers of any product or service, Kotler (2003). Further, Kotler mentions that segmentation is ultimately based on user's needs, and that companies routinely practice market segmentation both on target marketing and on evaluative criteria. There are also companies and segment their markets entirely on demographics, or the characteristics of their target markets.

As markets have become more and more crowded with alternative products and services, marketers are stressing benefits and behavioral segmentation criteria. For the busy business traveler who would find the travel service capable of handling both a detailed business and holiday itinerary possibly with family members, there are both benefits and behavioral segmentation criteria at work. Segmenting-based psychographics is gaining momentum today as many consumer companies look to group consumers by their common interests and attitudes about products, services, and broader societal issues.

This specific segmenting technique is very effective in defining early adopters of new products and services, as there are the "early adopters" for any new product or service. Moore (1999) defines the most critical part of a product's lifecycle being the first stage where early adopters and their high level of interest and even passion for products carry the product's sales "across the chasm" from being only for a few to being an alterative product for the masses. His book, Crossing the Chasm, discusses this dynamic.

Lastly, there is the segmentation based on business-to-business (B2B) demographics which include the size of firms, types of industry, geographic regions, and types of buying organizations. Of all the above-mentioned types of segmentation, organizational buyers are most commonly segmented by B2B demographics, specifically focusing on the areas of procurement and purchasing roles within an organization. For consumers who are vital links in business-to-consumer (B2C) segmentation and selling scenarios, demographics is often used yet is increasingly being replaced by benefits and psychographics-based segmentation strategies as well.

The emphasis in segmentation is shifting away from purely selling on price and availability and focusing more on "what in it for me" messaging to organizational or business buyers and consumers alike. Factors that influence organizational buyers and consumers' purchasing decisions are increasingly being driven by the level of trust they have for a specific manufacturer or service provider over another.

This trust issue is so strong that many organizations literally will make one manufacturer their sole source for products and services for such critical links as the steel used in their products or the cable used for building bridges. For the hypothetical travel service introduced at the beginning of this paper, the success or failure of the business hinges entirely on the ability to become a trusted advisor to potential and existing clients.

In addition to trust, organizational buyers and consumers both evaluate products and services on their congruence or alignment with their own needs and wants. This congruence or alignment with specific needs is critical for any manufacturer to be successful in marketing and selling their products. There are many other factors influencing organizational buyers and consumers, yet trust and congruence or trust specific to product features relative to an organization or consumer's needs are the most critical.

Product attributes also have a significant influence on purchasing decisions by both organizational buyers and consumers.

In terms of the travel service that combines both business and personal travel internationally, the key product or service attributes need to be expertise in planning multiple hotel or lodging locations, in-country transportation between various locations and inter-country transfers and knowledge of visa and passport requirements, including which currencies the traveler needs to have when they arrive in the foreign country, and an entire series of contacts for assistance with potential family emergencies if the traveler is also taking along their entire family.

The focus on total customer service and all-encompassing trust is critical from this product.