Chapters 6-8 Flashcards
Market
group of people with needs for products
To buy a product
must have the ability, willingness and authority to make a purchase
Types of markets
Consumer market and business market
Consumer market
purchasers who intend to consume or benefit from the product
Business market
orgs or groups that profit from products
Target market selection process
- identify target market
- segmentation
- market segment profile
- evaluate
- select target market
Target market
characteristics, product attributes, organization’s objectives
Market segmentation
process of dividing a total market into groups with similar needs
Undifferentiated approach
try to attract greatest number and variety of customers
Concentrated approach
focus on one or a few narrow groups
Variables
characteristics of markets used to divide into segments
Variables must
relate to customers
be measurable
consider company and product
Evaluating market segments
factors:
sales estimates
competition
estimated costs
Buying behavior
decision processes of people involved in buying products
what, where, when and how consumers buy
Consumer buying decision process
problem recognition information search evaluation of alternatives purchase postpurchase evaluation
Internal search
consumers search their memory for products
External search
buyers seek information from sources other than memory
Cognitive dissonance
a buyer’s doubts shortly after a purchase
Cognitive dissonance
a buyer’s doubts shortly after a purchase
High-involvement products
products that are visible to others
ex: home, car, etc
Low-involvement product
products that are less expensive or have less social risk
ex: groceries, t-shirt
Routinized response behavior
decision-making process used when buying frequently purchased, low cost items that require little search
ex: soft drinks or cereal
Limited decision making
decision-making process used when purchasing products occasionally or needing info about an unfamiliar brand
ex: vacation
Extended decision making
decision-making process when purchasing unfamiliar, expensive products
ex: car, home, college
Impulse buy
unplanned buying behavior
Maslow’s hierarchy
Psychological safety love esteem self-actualization
B2B markets
consists of individuals, orgs or groups that purchase products for:
resale
direct use in producing other products
use in daily operations
Types of business markets
producer
government
reseller
institutional
MOST USED IN B2B
PERSONAL SELLING
Producer markets
individuals and orgs that purchase products to make profit by making new products
includes:
buyers of raw materials etc
Reseller Markets
intermediaries, such as retailers who buy finished goods and resell for profit
Government markets
federal, state and local government that buy goods and services to support their internal operations
government spending: 39% of US GDP
Institutional markets
consists of orgs with charitable, educational or non-business goals
Types of demands
inelastic, joint, derived, elastic
Inelastic demand
price increase or decrease will not significantly change demand for a product
joint demand
the use of two or more items in combo to produce a product
derived demand
stems from demand from the consumer
elastic demand
price increases - demand decreases
business buying behavior
the purchase of producers, government units, resellers, etc
The buying center
people within an organization who make business purchase decisions
Users
members who initiate the purchase, use and eval the product
influencers
technical personnel who develop specifications and eval product
buyers
select suppliers and negotiate terms
deciders
actually choose products
gatekeepers
control the flow of information to and among people who occupy other roles
business buying decision process
problem recognition specifications potential products selection evaluation
problem recognition
step 1: one or more individuals recognize a product
specifications
step 2: development of product specifications require the buying center participants to assess problem or need and determine what’s necessary to solve it
potential products
step 3: searching for and eval potential products and suppliers
value analysis
eval of each component of the potential purchase
vendor analysis
formal eval of current and potential vendors
selection
step 4: select product to be purchased and what supplier
multiple sourcing
when the buyer selects and uses several suppliers
sole sourcing
when only one supplier is selected
evaluation
step 5: performance is evaluated by comparing it with step 2
buying situations
new buy, modified buy, straight buy
new buy
starting from scratch
straight rebuy
ran out of product, asks for more of the same
modified rebuy
make product, found errors, make changes, ship again
