Principles of Marketing

Lecture-17

Summaryof

Lecture-16

Business Markets and Buying Behavior

Model of Business Buyer

Behavior

Business Buying Situations

Straight RebuyStraight Rebuy

New Task BuyingNew Task Buying

Modified RebuyModified Rebuy

Invo

lved

Dec

isio

n M

akin

g

Major Influences on Business Buying

•Level ofdemand

•Economicoutlook

•Interest rate•Rate of techno-logical change

•Political andregulatorydevelopments

•Competitivedevelopments

•Social responsi-bility concerns

•Objectives

•Policies

•Procedures

•Organizationalstructures

•Systems

•Interests

•Authority

•Status

•Empathy

•Persuasive-ness

•Age•Income•Education•Job position•Personality•Risk attitudes•Culture

Environmental

BusinessBuyer

InterpersonalOrganizational

Individual

Problem RecognitionProblem Recognition

General Need DescriptionGeneral Need Description

Product SpecificationProduct Specification

Supplier SearchSupplier Search

Proposal SolicitationProposal Solicitation

Supplier SelectionSupplier Selection

Order Routine SpecificationOrder Routine Specification

Performance ReviewPerformance Review

Today’s Topics

Market Segmentation

Shift from…

Mass Marketing

………. Segmented

Marketing

Two Basic Approaches Market Segmentation Approach

– The needs and preferences of the global market are viewed as heterogeneous varying from one group to another.

Total Market Approach • The needs and preferences of the entire,

global market are regarded as relatively homogeneous.

Major Steps in Target Marketing

Segmentation

Target Marketing

Market Positioning

Market Segmentation

Dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes.

Target Marketing

The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.

Market Positioning

Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the mind of target consumers

Steps in Market Segmentation, Targeting,

and Positioning

Market Segmentation1. Identify bases for segmenting the market2. Develop segment profiles

Market Targeting3. Develop measure of segment attractiveness4. Select target segments

Market positioning5. Develop positioning for target segments6. Develop a marketing mix for each segment

Segmenting Consumer Markets

What is Market Segmentation?

Segmentation is breaking down heterogeneous mass market into more homogeneous submarkets

Consumers within segments should respond similarly to particular marketing actions

Consumer response should be different between segments

Why?

Why segment the market?Diverse needs, wants and buying

behaviors differ

One firm cannot satisfy everyone’s needs

Different strengths and competitive advantages

Focus on what they do best

Better marketing opportunities

More profitable

Segmentation

Segmentation Variables

Geographical segmentation

Demographic segmentation

Psychographic segmentation

Behavioral segmentation

Geographical Segmentation

Dividing a market into different geographical units such as nation, province, regions, countries, cities or neighborhoods

Geographic Segmentation Geographic Segmentation VariablesVariables

World Region or CountryRegionProvinceCityNeighborhoodCity or Metro SizeDensityClimate

Demographic Segmentation

Dividing the market into groups based on demographic variables such as age, gender, etc.

Demographic Segmentation Demographic Segmentation VariablesVariables

AgeGenderFamily sizeFamily life cycleIncome

OccupationEducationReligionRaceGenerationNationality

Psychographic Segmentation

Dividing a market into different groups based on social class, personality etc.

Psychographic Segmentation Psychographic Segmentation VariablesVariables

Social class

Lifestyle

Personality

Behavioral Segmentation

Dividing a market into groups based on consumer knowledge, attitude etc.

Behavioral Segmentation Behavioral Segmentation

VariablesVariables

OccasionsBenefitsUser StatusAttitude Toward the Product

User RatesLoyalty StatusReadiness Stage

Enough for today. . .

Summary

Market Segmentation

Segmentation

Major Steps in Target Marketing

Segmentation

Target Marketing

Market Positioning

Segmentation Variables

Geographical segmentation

Demographic segmentation

Psychographic segmentation

Behavioral segmentation

Next….

Market Segmentation (cont..)

Principles of Marketing

Lecture-17