Chapter 5 Flashcards
Segmentation and Target Marketing
Individuals, institutions, groups with similar needs that can be met by an offering
*The goal is to identify specific customer needs, then design a program to satisfy them
Buyer Behavior in Consumer Markets
Irrational and Unpredictable
Progresses through 5 Stages
Strong Brand Loyalty Moves from Need to Purchase
Includes Parallel Decisions (What/Where)
5 Stages of Consumer Buying
- Need Recognition
- Information Search
- Evaluation of Alternatives
- Purchase Decision
- Post-purchase Evaluation
Consumer Need
Existing level of satisfaction does not equal their desired level
Consumer Want
Desire for a specific product that will satisfy the need
Consumer Demand
Customer’s ability and willingness to purchase a specific product backs up their want for the product
4 Possible Post-Purchase Outcomes
- Delight
- Satisfaction
- Dissatisfaction
- Cognitive Dissonance
Factors Affecting the Consumer Buying Process
- Decision-Making Complexity
- Individual Influences
* 3. Social Influences - Situational Influences
4 Types of Business Markets
- Commercial Markets
- Reseller Markets
- Government Markets
- Institutional Markets
Unique Characteristics of Business Markets
The Buying Center
Hard and Soft Costs
Reciprocity
Mutual Dependance
7 Stages of Business Buying
- Problem Recognition
- Develop Product Specifications
- Vendor Identification and Qualification
- Solicitation of Proposals or Bids
- Vendor Selection
- Order Processing
- Vendor Performance Review
Market Segmentation
Process of dividing up the total market for a product into homogeneous groups
Members are similar to each other and dissimilar to other groups
Mass Marketing
*Involves no segmentation!
Undifferentiated approach, results in lower market costs
Inherently risky and vulnerable to competitors
Differentiated Marketing
Process of dividing up total market into groups of customers having common needs and developing a strategy to pursue one or more of the groups
Multisegmented Marketing Approach
Attracting buyers in more than one segment by offering a variety of products to appeal to different needs
Market Concentration
Focusing on a single market segment and attempting to gain maximum share in that segment
Niche Marketing
Focused marketing effort on one small, well-defined market segment that has a unique, specific set of needs
One-to-One Marketing
Creating entirely unique product offerings for each customer
Mass Customization
Providing unique solutions to individual customers on a mass scale
Permission Marketing
Customers choose to become a member of the firm’s target market
Customers are already interested in the product offering
5 Criteria of Successful Market Segments
- Identifiable and Measurable
- Substantial
- Accessible
- Responsive
- Viable and Sustainable
Consumer Market Segmentation Types
Behavioral Segmentation
Demographic Segmentation
Psychographic Segmentation
Geographic Segmentation
Business Market Segmentation Types
Organization Type Organizational Characteristics Benefits Sought / Buying Process Personal And Psychological Characteristics Relationship Intensity
How to Target Noncustomers
Understand why they do not buy - find ways to remove obstacles
Design, affordability, distribution, convenience, awareness
The Buying Center
Group of People Responsible for Making Purchasing Decisions
Hard Cost
Price
Purchase, Shipping, Installation Cost
Soft Cost
Downtime, Opportunity Cost, Human Resource Cost
