B2B Marketing Consulting Agency Blog

No Market is Homogeneous

- November 13, 2012 5:33 am

Document ScannersTime and time again, we’ve found that any given market has at least 3-4 main segments. Many of their requirements overlap, but there are always key differences. Are you marketing to these market segments and, if so, do you know which are the most profitable?

For example, in the commercial document scanner market, we found three main types of resellers through market research: System Integrators (SI), Hardware Resellers and Services Firms. The SIs offered hardware installation as just one of their services, so they sold many scanners at a fat margin because they are a smaller part of the sale and can be marked up nicely. Hardware Resellers sell only hardware, sell in high volume and at the lowest price (and margin), so they always complained to manufacturers about price because, to them, scanners are commodities.

Services Firms mainly provide maintenance but sell only a few scanners when they give out. Why is this important? Instead of spending 80% of their effort on 20% of sales (i.e. listening to the Hardware Resellers and lowering price or wasting time with Services Firms), our client instead recruited System Integrators and eventually increased price. As a result of our findings and advice, the manufacturer doubled their sales over the next two years.

Key Takeaways

  • Markets are made up of multiple segments whose buying behavior differs
  • You need to target each segment with offerings that meet their specific needs
  • By treating everyone the same you may spend 80% of your time on those generating only 20% of your business

To better understand your target market, its segmentation and improve compelling messages, contact us.