4 Types of B2B Markets and How To Segment Them

What Is B2B Marketing?

Marketing is a difficult skill to master. Marketers have much to juggle when developing their marketing strategy, between creative demands, budget constraints, and channel decisions. Your audience, on the other hand, is the most important determinant of effective marketing. Marketing to businesses is different from marketing to individual consumers. That is why a completely different marketing method exists: B2B marketing.

Business-to-business (B2B) marketing, as the name implies, is marketing products or services to other businesses and organizations. It differs significantly from B2C marketing, which is geared toward consumers. Companies that sell products or services to other businesses or organizations (rather than consumers) typically employ B2B marketing strategies.

The goal of B2B marketing is to familiarize other businesses with your brand name, and the value of your product or service and convert them into customers. In this blog, we’ll discuss four of the most common types of business-to-business marketing audiences and how to target them.

Types of Business-To-Business Markets


Producers are companies that buy goods and services to transform them into other products. They include both producers and service providers. Procter & Gamble, General Motors, McDonald’s, Dell, and Delta Airlines are major examples of B2B producers. So are restaurants, your dentist, your doctor, and the tattoo parlor. For example, your neighborhood tattoo parlor requires specialized inks and needles, and a bright neon sign that flashes “open” in the middle of the night. Your dentist needs drugs such as Novocain, oral tools, and x-ray machines. All of these businesses must purchase specific products to produce the goods and services they provide.


Resellers sell goods and services produced by other businesses with no material changes. Wholesalers, brokers, and retailers are among them. You’ve probably heard of Walmart and Target, two major retailers. Large wholesalers, brokers, and retailers wield considerable market power. The distinction between them is due to various factors, but it is summarized as a difference in the quantity of one product on hand. Distributors work with Manufacturers, Wholesalers buy from Distributors, and Retailers Sell to Consumers. Your sales may skyrocket if you can persuade a Reseller to buy your products.


Can you imagine the world’s largest buyer of goods and services? The United States government. The U.S government purchases everything imaginable, from paper and fax machines to tanks and weapons, buildings, NASA toilets, highway construction services, and medical and security services. Business-to-government (B2G) markets, or when companies sell to local, state (or provincial), and federal governments, represent a significant selling opportunity, even for smaller sellers.


Nonprofit organizations (NGOs) such as the American Red Cross, churches, hospitals, charitable organizations, private colleges, civic clubs, and others are examples of institutional markets. They, like the government and for-profit organizations, purchase many products and services. Cost-cutting is especially important to them. The lower their costs, the more people they can serve. NGOs accept donations from private individuals, for-profit corporations, charitable foundations, and governments of all levels, including local, state/provincial, federal, and international. They can also charge membership dues and sell goods and services as nonprofit entities.

How To Segment Your B2B Market For Greater Success

Customer segmentation is effective because it enables marketers to create an accurate picture of their customers, categorize them based on similarities, and tailor messages to specific segments of their customer base. These messages will inevitably be personalized and tailored, resulting in significantly higher conversions.

B2B marketers leverage firmographics in the same way B2C marketers leverage demographic data; it is a method of segmenting customers based on shared characteristics. Firmographic segmentation categorizes customers based on factors such as company size (measured by the number of employees or annual revenue), company location (for example, inner-city Toronto versus rural Mahone Bay), industry, and other technologies used by the targeted companies.

Customer tiering is a method of segmentation based on how well a customer matches your company’s goals. For example, you can use customer tiering to segment customers based on how much revenue you anticipate they will bring to your company over your relationship, or how closely that customer matches your sales and marketing strategies. Needs-based customer segmentation categorizes your customers based on what they want in a product. Of all segmentation methods, this one provides the B2B marketer with the most accurate way to target customer segments. It is highly scalable because the marketer can designate as many needs-based segments as desired.

Another example of how to segment your B2B market for greater success is segmenting based on customer sophistication. This means dividing your target audience based on their product or industry insight. Segmenting by customer sophistication offers the opportunity to tailor your campaigns toward a lead’s specific need and looks exclusively at a target company’s awareness of the problem your product solves. Behavioral segmentation is a powerful complement to tiered segmentation for B2B marketers looking to maximize the value of their existing customer base. A good B2B marketer can identify these trends and place the customer in an appropriate segment to either nudge them toward purchasing more or mitigate risk by improving the health of their product usage.

Segmenting B2B Markets To Reach Your Goals

The important thing is not to become complacent or comfortable. Your company must constantly evaluate and improve its B2B marketing strategies to remain competitive. Segmentation is based on clean, enriched data that focuses your marketing campaigns. A smart digital marketing strategy includes proper data utilization for decision making. Reach out to our team today for a free consultation on getting started.