0204

Problem

Segmentation is a tool that marketers use to identify target markets. Increasingly, purchasing managers are using the segmentation approach to determine which suppliers are most critical to the goals of the organization. Explain.

Step-by-step solution

Show all steps

100% (1 rating) for this solution

Step 1/2

The process of selecting and grouping specific products and services to purchase or market by an organization is termed as “segmentation”. Segmentation is not as simple as it sounds for it is an integration of various strategies and policies.

In the contemporary business era, business marketers are widely using segmentation to identify target markets. Apart from this, segmentation approach is widely being used by procurement managers to determine the relevant and substantial suppliers to reach the goals of the organization. These goals are explained below in brief:

Step 2/2

Reasons to approach segmentation process by procurement managers:

• Segmentation aids in procuring unique portfolio of products and services.

• It provides special discounts and price reduction for bulk orders.

• Choosing specific products and services helps in accumulating pioneer work efficiency.

• Components that stimulate brand identity and revenue are given priority in segmentation markets.

• Segmentation business helps in evaluating best market suppliers that suits better for an organization.