University of Twente Student Theses


Value-in-use as centre for business-to-business segmentation

Nelissen, J.I.R. (2018) Value-in-use as centre for business-to-business segmentation.

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Abstract:The safety service industry is a market that has become overpopulated with both small and big competitors. One organization present in this overpopulated safety service industry is IVM. IVM (Instituut voor Veiligheid en Milieu) provides safety services such as safety trainings, safety employees, and safety consulting. Mitchell & Wilson (1988) argued that segmentation is vitally important for organizations in such markets. According to Ellis (2011) using segmentation can help organizations to better target their marketing efforts. Sharip & Bonoma (1984) add to this that segmentation can help organizations to understand the market, select key markets, and manage the marketing department. Kandeil, Saad & Yousseff (2014) give a more recent description which implicates that in Business-to-Business (B2B) marketing and segmentation, it is imperative to fully identify and understand the different groups of business customers, and that this should be done with the aim of increasing the customer value by the means of uncovering the customer needs and fulfilling these needs. This is also suggested by Vargo, Maglio & Akaka (2008), who reviewed the significant role of the customer perceived value-in-use. A high understanding of the customer needs enables a company to position itself in such way to target the most valuable (potential) customers. Therefore, a company should clearly identify the needs and wishes of the customers (the value-in-use). There is a knowledge gap in the literature regarding B2B segmentation and what role the value-in-use concept has in B2B segmentation. Also, how to identify possibilities to increase the value in-use for the customers in safety demanding industries remains unclear in the literature, or it has been difficult to assess in the past. This research entails a case study of these possibilities and tries to enrich the literature regarding value-in-use in B2B context. Therefore, the purpose of this study is to research how companies in safety demanding industries can improve their approach to customers based on the value-in-use segmentation and matching value propositions. Thus, the main research question is “How can IVM improve their approach to customers based on the value-in-use segmentation and matching value propositions?”. Before answering on how IVM can improve their approach to customers, a clear understanding is needed regarding the theoretical concepts of B2B segmentation, value-in-use and value propositions. Literature research is done on how the relationship between value-in-use and value propositions is theorized, and also how value-in-use can be improved for customers from a theoretical point of view. Once these relations are known and these concepts are clarified the empirical research can begin. For this research the value proposition and value-in-use will be researched from both a service provider and customer perspective. During the case study the value of the services are based on the customer’s perception, not the perception of the company that is offering the products/services. Based on these results, ways to segment the customers are identified for the company in the case study, and thus for both the providing as consuming organizations. The aim of the research is to identify how companies in the safety service industry can improve their approach towards customers based on value-in-use segmentation. The data in this study is gathered through semi-structured interviews with customers of the researched company. The focus of these interviews is to determine the customer’s current value-in-use perspective on the safety services provided, and their value wishes. The analysis of these results is done through cluster analysis. Through this method, market segments will be formed based on the customers’ value-in-use. Finally, value propositions are created to suit these segments. The research contributes to the existing theory in the field of B2B segmentation and value-in use in B2B context. It gives both a theoretical and practical view on how value-in-use plays a role in customer segmentation. The literature review expands the current theory on the concepts of B2B segmentation and value-in-use, and how these can be put together, and the case study gives a practical example on how to implement it. The next chapter describes the theory regarding the several concepts that are discussed or that are used during this research. Following, the description of the research gap and the purpose of the research. Next, the methods that are used for this research are described and an introduction to the case study is given. After this, the results of the case study are presented, and a value proposition is proposed for the studied company. Finally, the conclusion combined with the managerial implications is presented.
Item Type:Essay (Master)
IVM, Coevorden, Nederland
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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