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Paper info: Segmenting Industrial Buyers by Loyalty and Value


Segmenting Industrial Buyers by Loyalty and Value


Gregory Elliott and Lawrence Ang

Place of Publication

The paper was published at the 17th IMP-conference in Oslo, Norway in 2001.


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The process of ?market segmentation? is a cornerstone of modern marketing and anessential task for relatively smaller seller organisations as they address themselves tomarkets much larger and more diverse than their limited output capacity. In massconsumer markets the process is, arguably, well developed and sophisticated. Inindustrial markets, it is generally acknowledged that the process is less wellunderstood and even less well practised. The obvious diversity of industrial marketsand frequently idiosyncratic buyer-seller relationships explain, in part, this lack ofgeneralisability.This paper proposes a methodology for industrial market segmentation which is basedon the joint consideration, and explicit calculation, of both the value of the customerto the seller, and the value of the seller to the customer. Implicit in the process ofmeasuring value are the central concepts of relationships, and customer loyalty.