How To Do B2B Market Segmentation To Increase Marketing Effectiveness

In order to be successful in business-to-business (B2B) marketing, it’s essential to understand how to properly segment your market. By dividing your potential customers into smaller groups, you can more effectively target your marketing campaigns and see a greater return on investment (ROI). In this blog post, we’ll discuss some tips for doing effective B2B market segmentation. Read on to learn more!

Benefits of B2B market segmentation

By segmenting the B2B market, businesses can reap a wide array of advantages. From improved customer service and engagement to increased revenue potential and better-targeted marketing campaigns, understanding your target audience through market segmentation provides endless opportunities for success.

Target customers more effectively with tailored messaging

Business-to-business market segmentation offers organizations a powerful way to target customers, allowing them to create tailored messaging that speaks directly to the customer’s needs and interests.

By clearly defining who their customers are and what they need, companies can craft better messaging that resonates with potential buyers, resulting in more successful sales attempts.

Market segmentation also allows marketers to compare the similarities and differences between customer segmentation groups, giving them insight into how best to approach each customer type and increasing their chances of success even further.

By segmenting its target customer base, an organization can maximize its marketing efforts and reach as many people as possible with meaningful messages while simultaneously building relationships and driving conversions.

Increase customer engagement and conversion rates

Businesses can increase customer engagement and conversion rates by tailoring content and messaging specifically for each market segment. This will ensure that messages are more targeted, relevant, and appealing to prospective customers who are actively seeking similar solutions.

Create a better understanding of customer needs and wants

Business-to-business segmentation provides organizations with essential insights into customer needs and wants.

By grouping customers into distinct customer segments that share common characteristics, such as industry, geographical location, or company size, businesses can better gauge what drives their purchasing decisions.

Analyzing customer objective data to uncover important attributes can enable companies to tailor offers and stronger marketing messages in a more tailored way, understanding exactly what makes each segment unique. Segmentation also helps firms identify prospective opportunities in terms of new market segments that may be ripe for business growth.

Maximize marketing ROI by focusing on the right channels and messages for each target group

By focusing on the right channels and messages for each target group, companies can better allocate their marketing budget and time in order to reach their desired market.

With segmentation, companies can analyze customer needs and develop unique messaging that resonates with the individual groups they are targeting.

By zeroing in on where and how customers want to receive information, businesses can reduce the costs of ineffective campaigns while increasing revenue from effective ones.

This finely tuned targeting will ensure that company resources are used efficiently and effectively, resulting in a greater return on your investments in the long run.

Develop a deeper level of customer loyalty by providing personalized experiences

Utilizing segmentation to identify high-value customer demographics allows businesses to build deeper levels of customer loyalty by creating more personalized experiences for those customers.

By understanding these preferences and engaging with customers in more meaningful ways, businesses can create products and services tailored to the exact needs of each group.

This has clearly demonstrated benefits when it comes to data-driven marketing initiatives, with customers confidently engaging more intensely and frequently.

Ultimately, with the right approach and appreciation for customer diversity, B2B businesses can leverage segmentation to build exceptional levels of customer loyalty and global reach as a result.

These are just a few of the advantages that come with a well-executed B2B market segmentation strategy. By taking the time to properly segment your audience and customize your messaging, you can ensure that your marketing efforts are being used in the most effective way possible.

B2B market segmentation vs B2C market segmentation

Business-to-business (B2B) and business-to-consumer (B2C) market segmentation differ in a few key ways.

B2B segmentation focuses on breaking down the audience into groups that have similar needs, interests, and behaviors related to their business. This helps companies develop more tailored strategies for marketing products and services to the right people.

B2C segmentation, however, is more focused on:

  • demographics segmentation such as age, location, and gender,
  • psychographic segmentation such as social class and lifestyle,
  • behavioral segmentation such as knowledge, attitudes, uses, or responses to products.

Companies typically use this type of segmentation when targeting consumers for products or services that aren’t related to their business activities.

In both cases, it’s important to understand the data and insights available in order to create an effective marketing strategy.

What is common to B2B market segmentation and B2C market segmentation

Both B2B and B2C market segmentation involve the process of breaking down an audience into smaller groups with similar characteristics. By understanding the data and insights available, companies can create more tailored strategies for marketing their products or services to different types of customers.

Additionally, both methods require companies to research their competition to identify what is working well and how they can improve upon it.

Finally, it’s important for businesses to test, measure, and adjust their strategies over time in order to maximize effectiveness.

B2B market segmentation process

1. Collect B2B customer data

Gather data about potential and existing customers such as their demographics, purchasing approach, and pain points. This information can be collected through surveys, interviews, focus groups, or CRM analytics.

2. Analyze B2B customer data

Once you have collected the data from your customers, you can analyze it to see if there is any patterns or trends. This will help you identify potential market segments that could be targeted with tailored marketing messages.

3. Do Market Research – competitors and their customers

Researching your competition and their customers is an important part of b2b market segmentation. By understanding the strategies that are working well for other companies, you can identify opportunities to improve upon them and create more effective marketing campaigns.

It’s also useful to understand who your competitors are targeting with their messaging, so you can better tailor yours to stand out from theirs.

Additionally, researching customer reviews and feedback can provide valuable insights into what people like or dislike about a product or service, which can help inform your own strategy.

Overall, research is essential for understanding the competitive landscape and developing a successful b2b segmentation strategy.

4. Create segmentation criteria

Once you have identified potential market segments, create criteria for each to further narrow your target audience. This could include characteristics such as geographic location, industry type, company size, or budget.

5. Test your segments

Once you have created your market segments, it’s important to test them to make sure they are effective. Create a few different campaigns with different messages for each segment and measure the results to see which one works best. This will help you refine and improve your segmentation strategy over time.

6. Review and adjust

Monitor the performance of your segments to see if they are still effective. Make any necessary adjustments based on new insights or changes in the market. This will help ensure that your segmentation remains relevant and up-to-date.

By following these steps, you can create an effective B2B marketing segmentation strategy that will help you reach the right customers with more tailored messages. This will ensure that your campaigns are successful and drive maximum value for your business.

Segmentation variables for B2B markets

Segmentation variables for B2B markets are the criteria used to divide up a target audience into smaller groups. There is no one-size-fits-all approach to segmentation and defining variables, as it depends on the industry and other factors. Nevertheless, the most frequently used segmentation variables are industry-specific, business type, company size, and geographical location; additionally purchasers’ approach and situational can be taken into account.

Demographic segmentation


Marketers should select Which industries should they focus on. Some sectors may feature products that are easily replaceable, while others offer goods and services which cannot be substituted. While certain industries are more rewarding, others may be less lucrative. While certain industries are generally more tolerant, others have specific regulations that must be adhered to. As an example, the catering industry must adhere to certain regulations when delivering food to kindergartens.

Type of business

Wholesaler, retailer, manufacturing company.

Manufacturing companies tend to prefer long-term contracts with consistent delivery, while wholesale businesses can easily switch suppliers and have access to a wide range of similar products.

Company size

No matter what size company you decide to go with, there are both benefits and drawbacks. Small companies offer distinct advantages that large ones do not, while the reverse is also true. Careful consideration should be given before deciding which option best suits your company’s needs.

Geographic location

Identifying the optimal geographical regions to target while conducting B2B market segmentation can be a difficult challenge. Utilizing research and data analysis is key when narrowing down your focus areas for maximum efficiency.

If you desire to minimize risk, diversifying your markets by venturing into different regions is key. Take, for instance, the current state of affairs in various regions around the world: Europe and the United States are experiencing an economic recession while Asia remains a beacon of economic growth.

Purchasing approaches segmentation


  • Marketers must determine whether to prioritize customers with long-term relationships or short-term ones.
  • In some cases, customers who are more reliant on your product may become less profitable. Yet, you can still concentrate on these customers due to the fact that long-term relationships and future prospects for this particular segment attract your attention.

General purchase policies

  • Exclusive rights, long-term contracts, short-term contracts, no contracts.
  • Companies that demand high-quality or low-quality products or services.
  • Customer purchasing power (should you focus on companies that are industry leaders with strong purchasing power).
  • Purchasing function organization (should we focus on companies with centralized or decentralized purchasing process).

Situational segmentation

  • Urgency (should you focus on companies who need just-in-time delivery, or urgent delivery).
  • Applications (should you focus on specific applications of your product).
  • Size of orders (should you focus on small or big orders).

Segmentation by personal characteristics

  • Partners similarity (should you focus on companies whose values are similar to your company’s).
  • Attitudes toward risk (should you focus on risk-avoiding or risk-taking customers).
  • Loyalty (should you focus on only loyal customers).

By understanding and leveraging these segmentation variables, companies can create tailored marketing strategies that will reach the right customers with more accuracy.

Additionally, using a variety of variables can help businesses gain better insights into their audience so they can make more informed decisions about how to target them.

Using these segmentation variables, companies can also identify trends in the market and gain insights into customer preferences and behaviors. This will enable them to create more targeted campaigns that are tailored to specific customer needs and interests.

By segmenting their audience, businesses can create more effective marketing strategies that will reach the right customers for maximum ROI. Additionally, this will help them to build stronger relationships with their customers as they understand their needs better.

Firmographic segmentation

Firmographic segmentation is a type of B2B market segmentation. It is comparable to demographic segmentation.

Firmographic segmentation is a method of market segmentation typically used by business-to-business (B2B) companies. It is used to divide a company’s target market into smaller, more targeted groups based on the characteristics of their ideal customer. This type of segmentation focuses on firmographics such as size and industry.

Firmographic segmentation helps companies better understand their target market and identify potential opportunities for growth in specific segments of the market. By understanding which customer profiles have the greatest likelihood of becoming loyal customers, businesses can create highly targeted marketing campaigns that are more likely to be successful.

Moreover, this type of segmentation can help businesses save time and money by focusing on the most profitable customers in their target market.

Firmographic segmentation is becoming increasingly popular as more and more companies are realizing their potential for improving customer acquisition, engagement, loyalty, and profitability. By understanding the needs of their ideal customers, companies can create better marketing strategies that will ultimately result in higher ROI.

Furthermore, this type of segmentation can be used to identify potential partnerships and collaborations that could further boost the company’s growth. By understanding their target market, companies are better equipped to take advantage of opportunities and increase their profitability.

Geographic segmentation for international markets

Geographic segmentation is one of the most popular and widely used types of market segmentation for global businesses. It involves dividing a company’s customer base into smaller, more targetable groups based on their location. Geographic segmentation enables companies to create more effective marketing campaigns that are tailored to the needs of customers in different parts of the world.

Economic segmentation for international markets

Economic segmentation is another popular type of market segmentation for global businesses. It involves dividing a company’s customer base into smaller, more targetable groups based on their economic characteristics and preferences. Economic segmentation enables companies to create marketing campaigns tailored to customers in different markets with different income levels, spending habits, and financial goals.

Cultural segmentation for international markets

Cultural segmentation is a type of market segmentation used by global businesses to divide their customer base into smaller, more targetable groups based on cultural factors such as religion, language, values, and customs. By understanding the cultural preferences of their customers in different parts of the world, companies can create marketing campaigns that are tailored to the needs and values of a particular culture.

Requirements for effective B2B market segmentation

To ensure effective B2B market segmentation, there are four key requirements – measurability, accessibility, substantiality, and actionability.

  • Measurability is essential to determine the size of a market segment and identify opportunities to reach target customers efficiently.
  • Accessibility involves creating data points that allow a marketer to accurately identify and measure customer segments.
  • Substantiality is the process of identifying and selecting a segment that has sufficient market potential to be profitable.
  • Lastly, actionability is essential to ensure that the information provided can be used to create marketing strategies that will reach target customers effectively.

By following these four key requirements, businesses can create successful B2B market segments with greater accuracy and efficiency. This will help them to identify opportunities, develop customer insights and create more effective marketing strategies.

Evaluating B2B market segments

Evaluating B2B market segments is an essential step in creating a successful marketing strategy. It involves assessing segment attractiveness, analyzing business strengths and weaknesses, and selecting the most suitable market segments to target.

By evaluating these factors, businesses can identify opportunities for growth and create more effective marketing strategies that will reach the right customers with greater accuracy. Additionally, this will enable them to build stronger relationships with their customers as they understand their needs better.

B2B market segmentation strategy

B2B market segmentation strategy is an important part of any business’s success. With the right knowledge and understanding of the various strategies available, businesses can create marketing campaigns that reach the right customers with greater accuracy and efficiency. There are three major B2B market segmentation strategies: undifferentiated marketing, differentiated marketing, and concentrated marketing.

Undifferentiated marketing

Undifferentiated marketing involves targeting the entire market with a single product or service. This is often used when businesses are unable to identify potential segments and are looking to reach as many customers as possible with their products or services.

Differentiated marketing

Differentiated marketing focuses on creating tailored messages for different customer segments based on their needs and interests. This strategy allows businesses to create more effective and targeted campaigns that are tailored to specific customer needs.

Concentrated marketing

Lastly, concentrated marketing involves targeting a single segment of the market with specialized products or services. This strategy is often used when a business has identified an attractive niche in the market and wants to focus on it exclusively.

By understanding these strategies and leveraging the right data, businesses can create effective marketing strategies that will help them reach the right customers and increase their success.

Choosing a B2B market coverage strategy

When choosing a B2B market coverage strategy, businesses must consider the size and potential of their target markets, company resources, product’s stage in its life cycle, market variability, competitors’ marketing strategies, product variables.

For smaller or niche markets, focused strategies such as concentrated marketing may be more suitable. However, for larger markets, differentiated strategies that focus on segmentation can be more effective. Additionally, businesses should consider how they are going to measure success and track their performance when selecting a market coverage strategy.

By following these guidelines and leveraging data to properly segment the market, businesses can create effective marketing strategies that reach the right customers with greater accuracy and efficiency. This will help them to maximize their growth opportunities and build strong relationships with their customers.

Levels of B2B market segmentation

B2B market segmentation is a crucial factor for businesses to consider when creating marketing strategies that will reach the right customers. There are four levels of segmentation that businesses can use in their B2B marketing campaigns, including mass marketing, segmenting marketing, niche marketing, and micromarketing. Each of these approaches has its own advantages and disadvantages, and businesses must consider their target market when deciding which segmentation strategy to use.

Mass marketing

Mass marketing is a broad approach that involves targeting the entire market with a single message or product. This is often used when businesses are unable to identify potential segments or have limited resources for targeted campaigns. While mass marketing allows for greater reach, it can be less effective as customers may not all respond to the same message.

levels of segmentation
Levels of segmentation

Segmented marketing

Segmented marketing involves targeting specific segments of the market with tailored messages and products that are designed to meet their needs. This allows businesses to create more effective campaigns that will resonate with certain customer segments and increase engagement.

Niche marketing

Niche marketing is a more focused approach that involves targeting specific niches within the market. This strategy can be beneficial when businesses are able to identify and understand their target customers and create specialized products or services for them.


Micromarketing involves targeting very specific individuals with tailored messages and products. This is often used for high-value customers or those who require specialized services. Micromarketing can be more expensive, but it also allows businesses to create highly personalized experiences that will help them build strong relationships with their customers.

Multivariate B2B market segmentation

It involves dividing markets into smaller market segments based on factors such as geography, demographics, psychographics, product usage, and customer loyalty. There are several types of multivariate B2B market segmentation including simple multivariable segmentation, advanced b2b market segmentation, and multistage b2b market segmentation. Each approach has its own advantages and disadvantages depending on the type of business and target audience.

Simple multivariable segmentation

Simple multivariable B2B market segmentation is the process of dividing markets into smaller segments. An example of this type of segmentation could be used to target customers by industry.

Advanced B2B market segmentation

Advanced B2B market segmentation is used to divide larger markets into smaller, more detailed segments by using a number of variables simultaneously. An example of this type of market segmentation could be used to target customers by customer industry and then by application.

Multistage B2B market segmentation

This type of segmentation means first dividing markets one way and then other. For instance, if a company has their sales offices located in many different countries, they can segment the markets by country and then further refine them according to industry.


B2B market segmentation is a critical component of any successful marketing strategy. By considering factors such as geography, demographics, psychographics, product usage, and customer loyalty when creating campaigns, businesses can ensure they are reaching the right customers with the most effective messages and products.

Whether you choose to use mass marketing or micromarketing approaches for your B2B campaigns, it’s important to consider how best to tailor them for each target audience in order to maximize engagement and conversions. With careful consideration of these strategies and their implications on various markets, businesses can create more effective B2B marketing plans that will help drive sales success.

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