Helpful Findings

Customer Segmentation in B2B Markets

• A common approach in business-to-business markets is to apply a market segmentation based on company size.
• The consumption levels of business-to-business customers are so widely different that this often makes sense due to large companies usually thinking and acting differently to small ones.
• When it comes to customer segmentation, in B2B organizations, marketers focus on job title, industry verticals, whether the business is public or private, how large the company is, and what its buying patterns are.
• Horizontal segmentation, which requires looking at job titles regardless of industry, enables organizations to focus more on the needs of the people working in specific roles.

B2B Customer Segmentation Challenges

Some of the challenges are:

• B2B markets have a more complex decision-making unit.
• The view that B2B buyers are more rational than consumer buyers is perhaps controversial, but true.
• Just as the decision-making unit is often complex in business-to-business markets, so are B2B products.
• B2B target audiences are smaller than consumer target audiences.
• B2B markets drive innovation less than consumer markets.
• B2B markets have fewer behavioral and needs-based segments.
• The B2B buyers are more rational than consumer buyers is perhaps controversial, but we believe it's true.
• The Need-Want-Desire-Demand framework of economics plays a significant role here.
• B2B products are more complex.  

Research Strategy

Crown Holdings, Inc.

• "Crown Holdings, Inc., through its subsidiaries, is a leading global supplier of rigid packaging products to consumer marketing companies, as well as transit and protective packaging products, equipment and services to a broad range of end markets."

• Crown Holdings, Inc. has organized its business within three geographic divisions: Europe, Americas, and Asia-Pacific.
• The company's segments within the Americas division include Americas Beverage and North America Food; In European Division, there are European Beverage and European Food; and the Asia-Pacific region consists of beverage cans, non-beverage cans, food cans, and specialty packaging.
• Other segments include specialty packaging business in Europe, aerosol can business in Europe and North America, and the tooling and equipment operations in the United Kingdom and the United States.

• The following are the product offerings from Crown Holdings, Inc. within the three geographic market segments: Americas — Food cans, beverage cans, aerosol cans, specialty cans, glass bottles, and closures and caps; Europe — Food cans, beverage cans, aerosol cans, specialty cans, closures and caps, and can-making equipment; Asia-Pacific — Food cans, beverage cans, aerosol cans, specialty cans, and closures and caps.

• Crown Holdings, Inc. began the construction of a new high-speed, online beverage can plant in Rio Verde, Brazil to capture the growing market of beverage cans there. Operations here were expected to begin by the fourth quarter of 2019.
• New production of aluminum cans meant for beer and non-alcoholic beverages were commenced at a new facility in Valencia, Spain in October 2018 to meet the growing demand there.
• In Cambodia, a third line production of aluminum beverage cans commenced at the existing Phnom Penh facility in January 2019.
• Production beverage cans "began in the fourth quarter of 2018 at a new one-line plant in Parma, Italy."

• The new production of beverage cans in Rio Verde was meant to enable the company continue to grow its market share there as beverage can is growing against returnable glass in Brazil.
• New production in Spain was meant "to meet the growing demand and preference for aluminum cans for beer and non-alcoholic beverages in the Iberian region."
• The third line production of aluminum beverage cans was initiated in the existing firm in Cambodia to support the growing consumer preference.
• The company's production of beverage cans commenced in Italy in order to add to its "widespread presence in Europe where the beverage can market grew at a compound annual growth rate of 3% for the five years ending in 2018."

• The new production in Rio Verde drove volume up 7%.
• Segment income went up $10 million in the quarter and it benefited "from numerous cost improvement initiatives offsetting the decline in volumes."
• Unit volumes in European Beverage improved 5%, primarily from the two new facilities in Italy and Spain offsetting softness in Turkey and the UK.

Ball Corporation

• "Ball Corporation and its consolidated subsidiaries is one of the world’s leading suppliers of metal packaging to the beverage, food, personal care and household products industries."

• The company's customer segmentation is as follows: "(1) beverage packaging, North and Central America; (2) beverage packaging, South America; (3) beverage packaging, Europe; (4) food and aerosol packaging and (5) aerospace."

• Ball Corporation's product offerings as already mentioned include "(1) beverage packaging, North and Central America; (2) beverage packaging, South America; (3) beverage packaging, Europe; (4) food and aerosol packaging and (5) aerospace."

• Ball Corporation decided to capitalize on the rising demand for beverage cans through investing in capacity and products. The company expected capital spending to reach $600 million by 2019.
• Ball Corporation continues to execute its strategies of achieving better value for standard products and higher growth for specialty products.
• The company also decided to focus on cost-cutting actions in order to bolster margins.

• The focus to capitalize on the rising demands for beverage cans was meant to boost growth.

• "The company expects to achieve EBITDA of $2 billion and free cash flow of more than $1 billion in 2019, backed by continued strong demand for aluminum packaging and robust aerospace backlog."
• The Beverage Packaging business for the company in South America is also expected to improve by 2019 as beer customers are shifting from glass packaging to aluminum cans.

Research Strategy