Firmographics

Firmographics (also known as emporographics or firm demographics) are sets of characteristics to segment prospect organizations.

What demographics are to people, firmographics are to organizations. However, Webster (2005) suggested that the term “firmographics” is a combination of demographics and geographics.

Commonly used firmographics include SIC, company size and location. Mostly term “Firmographics” is used in relation to a first step of nested approach or segmentation funnel, which was introduced by Shapiro and Bonoma in 1984.

Firmographics variables allow to consider the features of organizational behavior in details, for instance in particular industry. It is helpful when there is no significant difference between operating variables, purchasing approach, situational factors and personal characteristics of customers.

Geodemographic segmentation is a logical starting point because

However, Webster (2005) believed that this approach misses a set of essential variables. Moreover, a differentiation between segmentation bases of nested approach is too complicated.

First attempts to segment industrial markets have been made back in 1934. J. Frederick described five factors that should be considered when defining a component market: industry, product use, company buying habits, channels of distribution, and geographic location.

The term emporographics was coined by Banting in the early 1970s and refers to the equivalent of demographics in the context of industrial markets (Gross, A.C., Banting, P.M., Meredith, L.N., and Ford, I.D.: Business Marketing. Houghton Mifflin, Boston, MA, 1993). However, now the term “firmographics” is increasingly widely used.

Yoram Wind and Richard Cardozo in 1974 advocate a two-stage approach to industrial segmentation that consists of macrosegments and microsegments. They explain that macrosegments consist of key organizational characteristics such as size of the buying firm, SIC category, geographic location, and usage factors, hence, mostly of firm demographics. In some cases, single-stage segmentation based primarily on business demographics is sufficient for identifying and targeting markets. More typical, however, is that a two-stage approach that will employ benefits and organizational psychographics and purchasing criteria will be needed to provide complete market profiles.

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