GB530 Unit 4 Segmentation and Targeting Analysis Example

Three Owner Segments and 19,400 Buildings: A Unit 4 Segmentation and Targeting Analysis for a Roof Survey Firm

[Student Name]

Purdue University Global

GB530: Marketing Management

Unit 4 Segmentation and Targeting Analysis

[Instructor Name]

[Date]

The firm, the segment counts and every figure are composite and illustrative; the frameworks and sources cited are real.

Segmenting a Business Market

Shapiro and Bonoma (1984) proposed a nested approach to segmenting industrial markets, moving from outer characteristics that are easy to observe, such as industry and company size, through operating variables and purchasing approaches, to situational factors and the personal characteristics of buyers. The outer layers are cheaper to identify; the inner layers predict buying behavior better. Scioto Thermal Imaging applied the first three layers, then used the buyer research from Unit 3 to check the inner ones.

Layer 1, demographics: owners of several commercial buildings with low-slope roofs larger than 40,000 square feet in the three states.

Layer 2, operating variables: building type, roof area and portfolio size.

Layer 3, purchasing approach: whether roof spending is decided centrally by asset managers or building by building.

Three segments emerged from those layers.

Exhibit 1: Sizing the Segments

Values use a provisional annual program price of about 4.2 cents a square foot, the price set out in the pricing analysis.

Industrial and logistics portfolios. About 420 owner accounts holding about 6,300 buildings, roughly 15 buildings an account, with roofs averaging about 160,000 square feet. Annual program value per building about $6,770; segment value about $42.6 million a year.

School districts. About 280 districts holding about 3,900 buildings, roughly 14 a district, with roofs averaging about 85,000 square feet. Value per building about $3,600; segment value about $14.0 million.

Retail and office owners. About 1,100 owners holding about 9,200 buildings, roughly 8 an owner, with roofs averaging about 60,000 square feet. Value per building about $2,540; segment value about $23.3 million.

The retail and office segment has the most buildings, but industrial and logistics portfolios are worth nearly twice as much, because their roofs are much larger and their owners hold more buildings each.

Exhibit 2: Evaluating the Segments

Five criteria, weighted by what an annual program needs, were applied to all three segments, with 5 as the strongest rating.

Size (25 percent): industrial 5; schools 3; retail and office 4.

Growth (20 percent), measured by the share of roofs entering the age when moisture problems begin: industrial 5, since many were built in the recent warehouse boom; schools 3; retail and office 2.

Accessibility (20 percent), whether a few decision makers control many buildings: industrial 4, through asset managers; schools 2, through public procurement; retail and office 3.

Fit with the firm's position (25 percent), whether buyers value independent, whole-roof evidence: industrial 5, driven by insurers and lenders; schools 4; retail and office 3.

Competitive intensity (10 percent), scored higher where competition is weaker: industrial 3; schools 4; retail and office 3.

Weighted scores: industrial and logistics 4.60; school districts 3.15; retail and office 3.05.

Industrial portfolios win on every criterion that measures what an annual program needs: large roofs, many buildings per decision maker and owners under pressure to document condition.

Why Industrial and Logistics Portfolios

The segment combines the largest value with the most accessible buyers. A single asset manager may oversee twenty or thirty distribution buildings, and the Unit 3 research showed that asset managers approve roof spending above about $5,000. One successful sale therefore brings many buildings. Roof age adds urgency: many of these buildings have single-ply roofs installed in the same few years, so their owners face a wave of aging membranes at once. Insurers and lenders financing logistics properties increasingly ask for condition evidence, which an annual survey program provides.

Why School Districts Are Deferred

Schools are attractive in some ways. Their roofs are often old and leak-prone, and districts value independent evidence when deciding how to spend limited capital funds. But they are hard to reach for a small firm. Purchases above modest amounts go through public bidding, with specifications often written by architects who favor core-cutting methods. Budgets are set annually and often a year ahead. Roof work is concentrated in summer, when buildings are empty, which clashes with the firm's peak survey season. And each district must be won separately.

The firm should defer schools, not abandon them. Once it has a record of results with industrial portfolios and case studies to show, it can enter the school segment through architects and cooperative purchasing agreements that let districts buy without separate bids.

The Buying Center Within the Target

Webster and Wind (1972) describe organizational purchases as decisions shared among several roles. Within industrial portfolios, the roles are clearer than in the other segments: asset managers decide, facility managers use the service and make the first call, and insurers and lenders influence from outside. That clarity is part of why the segment is accessible. In school districts, by contrast, decisions involve facilities directors, business officers, architects, boards and procurement rules, which lengthens every sale and raises its cost.

Checking the Inner Layers

Shapiro and Bonoma's inner layers, situational factors and personal characteristics, refine the target within the industrial segment. The best prospects are portfolios with at least five buildings, an upcoming insurance renewal or refinancing, and an asset manager who has recently faced an unexpected roof replacement. Those are the accounts where the need is visible, the decision maker is identifiable and the evidence has an immediate use.

The Target in One Sentence

Scioto will target owners of five or more industrial and logistics buildings in Ohio, Indiana and Kentucky whose asset managers approve roof spending centrally, beginning with those facing insurance renewals or refinancing in the next twelve months.

What the Choice Means for the Firm

Targeting industrial portfolios has three consequences for the marketing mix. The product must be built around portfolios, with consistent reports across buildings and a dashboard an asset manager can use. The price must work at portfolio scale, which favors a yearly subscription across the portfolio over buying surveys one at a time. And selling must reach asset managers directly, since they are not the people who call when a roof leaks. Kotler and Keller (2016) note that target selection shapes every later marketing decision, and the units that follow build on this choice.

Limits

Segment counts come from property databases and the firm's estimates and should be checked against real portfolio lists. The program price is provisional, so segment values will change once pricing is set. The weights reflect the firm's judgment about what matters for an annual program; a firm selling one-time surveys might weigh them differently.

References

Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). Pearson.

Shapiro, B. P., & Bonoma, T. V. (1984). How to segment industrial markets. Harvard Business Review, 62(3), 104-110.

Webster, F. E., & Wind, Y. (1972). A general model for understanding organizational buying behavior. Journal of Marketing, 36(2), 12-19. https://doi.org/10.1177/002224297203600204