Targeting and positioning in B2B marketing: an educational overview

In the B2B marketing landscape, effective targeting and positioning are essential for driving business growth and building lasting relationships with clients. Unlike consumer marketing, where individual preferences often shape campaigns, B2B marketing is influenced by organisational needs, decision-making units and long-term value considerations.

Central to this approach is market segmentation, which enables marketers to divide a broad market into smaller, more manageable clusters of customers with similar characteristics. These clusters then serve as the foundation for selecting target markets and crafting tailored value propositions.

What is segmentation?

Segmentation is the process by which marketers categorise a population into distinct segments based on shared needs, preferences or behaviors. In the B2B context, segmentation goes beyond basic demographics and often incorporates a mix of organisational attributes and behavioral indicators. The goal is to identify which segments are most likely to respond positively to specific marketing strategies and product offerings. The segmentation process typically relies on four broad categories of variables: demographic, geographic, psychographic and behavioural.

Demographic variables in B2B might include characteristics such as company size, industry sector or assets under management. These are commonly used variables because they are easily measurable and often serve as reliable proxies for business needs. Geographic segmentation similarly categorises customers by location, such as region or market presence, which is particularly important to ensure that you’re communicating and marketing properly based on each regions key considerations and consumption habits.

While demographic and geographic variables offer simplicity and accessibility, psychographic and behavioural segmentation tend to yield deeper insights. Psychographic variables capture the beliefs, values or operating principles of an organisation. Examples include the investment philosophy that certain segments prefer or particular asset classes that are mandated. Behavioral segmentation, on the other hand, examines how organisations interact with a brand or category. This might include patterns of product usage, purchasing processes or sensitivity to costs. Behavioural segmentation can be analysed through the user journey on site, determining interest levels or intent. Though more difficult to measure, psychographic and behavioural data are critical for understanding the underlying motivations that drive decisions.

How to decide which segment to target

Once segmentation is complete, the next step is targeting, or the deliberate selection of which segments to pursue. A company must evaluate each segment’s potential through a structured lens. Effective targets are measurable (clearly identifiable and quantifiable), substantial (large enough to be worth serving), accessible (reachable through current channels), differentiable (distinct from other segments in needs or behaviours) and actionable (feasible to serve with current capabilities and resources). These criteria help ensure that marketing investments are focused and yield meaningful returns.

There are several targeting strategies available to B2B marketers. Concentrated marketing involves focusing on a single, well-defined segment with the aim of becoming a category leader. This is especially useful for specialised firms looking to dominate a niche. Selective specialisation, or multi-segment targeting, allows a firm to serve multiple distinct segments with tailored offerings, enhancing reach while maintaining relevance. In market specialisation, a company becomes an expert in serving one specific segment with a broad range of solutions, such as a firm that exclusively targets pension funds. Finally, mass marketing aims to serve all segments with a uniform offering, though this approach is typically reserved for large firms with broad capabilities and extensive reach.

Positioning your brand

With a target segment identified, the next crucial step is positioning. Positioning defines the unique place a brand occupies in the minds of its customers relative to competitors. In B2B markets, where purchase decisions often involve multiple stakeholders and long sales cycles, a strong positioning strategy can be a major differentiator. Effective positioning rests on three core components: a clearly defined customer, points of parity and points of differentiation.

The first step in positioning is to define the customer precisely by knowing not just the industry or company type, but also the specific job roles, pain points and motivations of decision-makers. Points of parity refer to the baseline expectations that all offerings in the category must meet. For instance, asset managers must have a clear investment philosophy, experienced investment team and transparency with fees. However, these attributes do not necessarily create competitive advantage. Points of differentiation, on the other hand, are unique attributes or benefits that are both meaningful to the customer and not commonly offered by competitors. These might include strong communication, or being a specialist in specific asset classes, which are factors that tip the decision in the brand's favor.

In conclusion, B2B marketing success relies heavily on the interplay between precise segmentation, thoughtful targeting and strategic positioning. By understanding the needs and behaviours of various market segments (and selecting the correct ones to serve), a B2B brand can craft compelling value propositions that resonate deeply with business customers. Moreover, with clear positioning that highlights relevant points of parity and meaningful differentiation, a brand can stand out in even the most competitive markets.