Situational Segmentation of Industrial Markets

Organisational buying situations may be classified on four distinct dimension. Individual dimensions and combinations of dimensions may be used to group industrial market transactions into separate segments. Segmentation based on buying situations can help marketers design and modify marketing programmes, and can assist marketers in predicting the response of particular segments to specified offerings. For example, Choffra and Lilien [5] have shown that knowledge about the composition of the decision-making unit (DMU) or buying centre in a specified situation helps marketers design or modify communication programmes, and concentrate attention on those market segments to which their competitive advantages are most meaningful. Formal analysis of differences among organisational buying situations received its greatest impetus from Robinson, Faris and Wind [14] who in 1967 differentiated new tasks from modified rebuys from straight rebuys. Moriarity and Galper [11] and the Scientific American [15] have classified buying situations by product. Hakansson, Johanson and Wootz [8] and Luffman [10] differentiated situations on the basis of perceived risk. Other scholars have refined and expanded theseclassifications. Interviews* with purchasing personnel and other members of DMUs, and with industrial marketing personnel, indicate that practitioners have adapted these classifications to suit their own needs and have in that process enriched the classification system. Specifically, practitioners differentiate buying situations on the bases of importance to the buying organisation, the source or origin of the buying process, and the level of funding approval needed. Information from scholarly and practitioner sources may be combined to produce a four-dimensional classification system for industrial buying situations. These dimensions include:(1) buyers’ familiarity with the buying task (new or rebuy); (2) product type; (3) importance of the purchase to the buying organisation; and, (4) principal type of uncertainty present in the purchase situation.