Identifying and selecting Market <ul><li>After going through this module, you will be able to: </li></ul><ul><ul><li>Under...
Consumer Buying Behavior <ul><li>Consumer Buying Behavior refers to the buying behavior of final consumer – individuals & ...
Model of Consumer Behavior <ul><li>Consumers make many buying decisions every day.  </li></ul><ul><li>It is not easy to le...
Model of Consumer Behavior <ul><li>Often many consumers themselves don’t know exactly what influences their purchases.  </...
Model of Consumer Behavior <ul><li>Marketing stimuli consist of the 4 P’s. Other stimuli includes major forces & events in...
Model of Consumer Behavior Marketing & other Stimuli Marketing   Other  Product   Economic Price   Technological Place   P...
Characteristics Affecting CB <ul><li>Consumer purchases are influenced strongly by: Culture, Social, Personal, and Psychol...
Characteristics Affecting CB CULTURE <ul><li>Culture:  The set of basic values, perceptions, wants, & behaviors learned by...
Characteristics Affecting CB SOCIAL FACTORS <ul><li>Group:  Two or more people who interact to accomplish individual or mu...
Characteristics Affecting CB PERSONAL FACTORS <ul><li>Age & Family Life-Cycle Stage:  People change the goods & services t...
PERSONAL FACTORS <ul><li>Occupation:  A person’s occupation affects the goods & services bought. Blue-collar workers tend ...
PERSONAL FACTORS <ul><li>Economic Situation:  A person’s economic situation will affect product choice. </li></ul><ul><li>...
Life Style <ul><li>People coming form the same subculture, social class, & occupation may have quite different lifestyles....
Personality and self-concept <ul><li>Personality:  Each person’s distinct personality influences his or her buying behavio...
Psychological Factors <ul><li>Motivation:  A person has many needs at a time, some are  Biological,  arising from states o...
Psychological Factors Physiological Needs (Hunger, Thirst) Safety Needs  (Security, Protection) Social Needs  (Sense of Be...
Psychological Factors <ul><li>Perception:  A motivated person is ready to act. How the person acts is influenced by his or...
Psychological Factors <ul><li>Learning:  when people act they learn. </li></ul><ul><li>Learning describes changes in an in...
Psychological Factors <ul><li>Beliefs & Attitudes:  through doing & learning, people acquire beliefs & attitudes </li></ul...
Types of Buying Decision Behavior <ul><li>Complex Buying Behavior:  CBB in situations characterized by high consumer invol...
Four Types of Buying Decision Behavior Complex  Buying  Behavior Dissonance- Reducing  Buying Behavior Variety- Seeking  B...
Consumer Decision Making <ul><li>Why consumer marketing difficult? </li></ul><ul><li>The mix of the people is constantly c...
The consumer Buying-Decision Process <ul><li>Need recognition:  The consumer is moved to action by a need or desire </li><...
The consumer Buying-Decision Process Need Recognition Evaluation of Alternatives Information Search Purchase Decision Post...
The consumer Buying-Decision Process SOCIAL & GROUP FORCES Culture Subculture Social Class Reference Group Family & Househ...
The consumer Buying-Decision Process <ul><li>Need Recognition:  The first stage of the buyer decision process, in which th...
The consumer Buying-Decision Process <ul><li>Purchase Decision:  The buyer’s decision about which brand to purchase </li><...
The consumer Buying-Decision Process – Possible Variations <ul><li>The consumer can withdraw at any stage prior to the act...
Importance of Business Buying <ul><li>Companies are making less & buying more:  Toyota annually buys $15 billion worth of ...
Nature & Scope of Business Market <ul><li>Business market consists of all individuals & organizations that buy goods & ser...
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Module 3 Identifying & Selecting Market

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Module 3 Identifying & Selecting Market

  1. 1. Identifying and selecting Market <ul><li>After going through this module, you will be able to: </li></ul><ul><ul><li>Understand Consumer Buying Behavior and Consumer Decision Making Process </li></ul></ul><ul><ul><li>Understand Business Market and Buying Decision Process </li></ul></ul><ul><ul><li>Understand Segmentation to Consumer Markets and Business Market </li></ul></ul><ul><ul><li>Understand Targeting and Position </li></ul></ul>
  2. 2. Consumer Buying Behavior <ul><li>Consumer Buying Behavior refers to the buying behavior of final consumer – individuals & house holds who buy goods & services for personal consumption. All of these final consumers combine to make up the consumer market. </li></ul><ul><li>They vary tremendously in age, income, education level, & tastes. </li></ul><ul><li>They also buy an incredible variety of goods & services. </li></ul><ul><li>How these diverse consumers connect with other & with other elements of the world around them impacts their choices among various products, services, & companies. </li></ul>
  3. 3. Model of Consumer Behavior <ul><li>Consumers make many buying decisions every day. </li></ul><ul><li>It is not easy to learn about whys of CBB. </li></ul><ul><li>Most large companies do research on consumer buying decisions in great detail to answer questions about What consumers buy, where they buy, how & when they buy, why they buy. </li></ul>
  4. 4. Model of Consumer Behavior <ul><li>Often many consumers themselves don’t know exactly what influences their purchases. </li></ul><ul><li>95% of the thought, emotion, & learning occur in the unconscious mind. </li></ul><ul><li>The challenging question to marketer is: </li></ul><ul><li>How do consumers respond to various marketing efforts the company might use? </li></ul>
  5. 5. Model of Consumer Behavior <ul><li>Marketing stimuli consist of the 4 P’s. Other stimuli includes major forces & events in the buyer’s Environment: Economic, Technological, Political, & Cultural. </li></ul><ul><li>Marketers wants to understand how the stimuli are changed into responses. </li></ul>
  6. 6. Model of Consumer Behavior Marketing & other Stimuli Marketing Other Product Economic Price Technological Place Political Promotion Cultural Buyer’s Black Box Buyer Buyer character- decision istics process Buyer Responses Product Choice Brand Choice Dealer Choice Purchase Timing Purchase Amount
  7. 7. Characteristics Affecting CB <ul><li>Consumer purchases are influenced strongly by: Culture, Social, Personal, and Psychological Characteristics </li></ul>Psychological Motivation Perception Learning Beliefs & Attitudes Personal Age & life- cycle stage Occupation Economic Situation Lifestyle Personality & Self-concept Social Reference groups Family Roles & Status Buyer Culture Culture Subculture Social Class
  8. 8. Characteristics Affecting CB CULTURE <ul><li>Culture: The set of basic values, perceptions, wants, & behaviors learned by a member of society from family & other important institutions </li></ul><ul><li>Subculture: A group of people with shared value systems based on common life experiences & situations </li></ul><ul><li>Social Class: Relatively permanent & ordered divisions in a society similar values, interests, & behaviors </li></ul>
  9. 9. Characteristics Affecting CB SOCIAL FACTORS <ul><li>Group: Two or more people who interact to accomplish individual or mutual goals </li></ul><ul><li>Family: It can strongly influence Buyer Behavior. Marketers are interested in the roles & influence of husband, wife, & children in the purchase of different products & services </li></ul><ul><li>Roles & Status: A person belongs to many groups-family, clubs, organizations </li></ul>
  10. 10. Characteristics Affecting CB PERSONAL FACTORS <ul><li>Age & Family Life-Cycle Stage: People change the goods & services they buy over their lifetimes. Tastes in food, clothes, furniture & recreation are often are related . </li></ul><ul><li>Buying is also shaped by the stage of the family life cycle – the stages through which families might pass as they mature over time. </li></ul><ul><li>Marketers often define their target markets in terms of life-cycle stage & develop appropriate products & marketing plans for each stage. </li></ul>
  11. 11. PERSONAL FACTORS <ul><li>Occupation: A person’s occupation affects the goods & services bought. Blue-collar workers tend to buy more rugged work cloths, whereas executives buy more business suits. </li></ul><ul><li>Marketers try to identify the occupational groups that have an above-average interest in their products & services. </li></ul><ul><li>A company can even specialize in making products needed by a given occupational group </li></ul>
  12. 12. PERSONAL FACTORS <ul><li>Economic Situation: A person’s economic situation will affect product choice. </li></ul><ul><li>Marketers of income-sensitive goods watch trends in personal income, savings, & interest rates. </li></ul><ul><li>If economic indicators points to a recession, marketers can take steps to redesign, reposition, & reprise their products closely </li></ul>
  13. 13. Life Style <ul><li>People coming form the same subculture, social class, & occupation may have quite different lifestyles. </li></ul><ul><li>Lifestyle is a person’s pattern of living as expressed in his or her psychographics. It involves measuring consumers’ major AIO dimensions </li></ul><ul><li>Activities (work, hobbies, shopping, sport, social events) </li></ul><ul><li>Interests (food, fashion, family, recreation) </li></ul><ul><li>Opinions (about themselves, social issues, business, products) </li></ul><ul><li>Life style captures something more than the person’s social class or personality. </li></ul>
  14. 14. Personality and self-concept <ul><li>Personality: Each person’s distinct personality influences his or her buying behavior. </li></ul><ul><li>Personality is the unique psychological characteristics that lead to relatively consistent & lasting responses to one’s own environment. </li></ul><ul><li>Personality is usually described in terms of traits such as self-confidence, dominance, sociability, autonomy, defensiveness, adaptability & aggressiveness </li></ul>
  15. 15. Psychological Factors <ul><li>Motivation: A person has many needs at a time, some are Biological, arising from states of tension such as hunger, thirst, or discomfort. </li></ul><ul><li>Others are Psychological, arising from the need for recognition, esteem, or belonging. </li></ul><ul><li>A need becomes a motive when it is aroused to a sufficient level of intensity </li></ul><ul><li>A motive (or drive ) need is sufficiently pressing to direct the person to seek satisfaction of the need </li></ul>
  16. 16. Psychological Factors Physiological Needs (Hunger, Thirst) Safety Needs (Security, Protection) Social Needs (Sense of Belonging, Love) Esteem Needs (Self-esteem, recognition, Status) (Self-development & realization) Self- Actualization Needs
  17. 17. Psychological Factors <ul><li>Perception: A motivated person is ready to act. How the person acts is influenced by his or her own perception of the situation </li></ul><ul><li>All of us learn by the flow of information through our five senses: sight, hearing, smell, touch, & tastes </li></ul><ul><li>Perception is a process by which people select, organize, & interpret information to form a meaningful picture of the world </li></ul>
  18. 18. Psychological Factors <ul><li>Learning: when people act they learn. </li></ul><ul><li>Learning describes changes in an individual’s behavior arising from experience </li></ul><ul><li>Learning theorists say that most human behavior is learned. </li></ul><ul><li>Learning occurs through the interplay of drives, stimuli, cues, responses, & reinforcement </li></ul><ul><li>Changes in an individual’s behavior arishing from experience </li></ul>
  19. 19. Psychological Factors <ul><li>Beliefs & Attitudes: through doing & learning, people acquire beliefs & attitudes </li></ul><ul><li>These, in turn, influence their buying behavior </li></ul><ul><li>A Beliefs is a descriptive thought that a person holds about something </li></ul><ul><li>Attitudes: A person’s consistently favorable or unfavorable evaluations, feelings, & tendencies toward an object or idea </li></ul><ul><li>Attitudes are difficult to change </li></ul><ul><li>People have attitudes regarding religion, politics, clothes, music, food, and almost everything else. </li></ul>
  20. 20. Types of Buying Decision Behavior <ul><li>Complex Buying Behavior: CBB in situations characterized by high consumer involvement in a purchase & significant perceived differences among brands </li></ul><ul><li>Dissonance-Reducing Buying Behavior: CBB in situations characterized by high involvement but few perceived differences among brands </li></ul><ul><li>Habitual Buying Behavior: CBB in situations characterized by low consumer involvement & few significant perceived brand differences </li></ul><ul><li>Variety-Seeking Buying Behavior: CBB buying behavior in situations characterized by low consumer involvement but significant perceived brand differences. </li></ul>
  21. 21. Four Types of Buying Decision Behavior Complex Buying Behavior Dissonance- Reducing Buying Behavior Variety- Seeking Buying Behavior Habitual Buying Behavior High Involvement Low Involvement Significant Differences Between Brands Few Differences Between Brands
  22. 22. Consumer Decision Making <ul><li>Why consumer marketing difficult? </li></ul><ul><li>The mix of the people is constantly changing </li></ul><ul><li>Not only is it difficult to anticipate what marketing program will work, but what worked yesterday may not work today – or tomorrow </li></ul><ul><li>Another changing is understanding how consumers make decisions </li></ul>
  23. 23. The consumer Buying-Decision Process <ul><li>Need recognition: The consumer is moved to action by a need or desire </li></ul><ul><li>Identification of alternatives: The consumer identifies alternative products & brands & collects information about them </li></ul><ul><li>Evaluation of alternatives: The consumer weighs the pros & cons of the alternatives identified </li></ul><ul><li>Decisions: The consumer decides to buy or not to buy & makes other decisions related to the purchase </li></ul><ul><li>Post purchase behavior: The consumer seeks reassurance that the choice made was the correct one </li></ul>
  24. 24. The consumer Buying-Decision Process Need Recognition Evaluation of Alternatives Information Search Purchase Decision Post-purchase Behavior
  25. 25. The consumer Buying-Decision Process SOCIAL & GROUP FORCES Culture Subculture Social Class Reference Group Family & Households PSYCHOLOGICAL FORCES Motivation Perception Learning Personality Attitude SITUATIONAL FACTORS When Where Why Conditions Under which Consumers buy INFORMATION Commercial Sources Social Sources CONSUMER BUYING-DECOSION PROCESS Need Recognition Identification of Alternatives Evaluation of Alternatives Purchase & Related Decisions Post-purchase Behavior
  26. 26. The consumer Buying-Decision Process <ul><li>Need Recognition: The first stage of the buyer decision process, in which the consumer recognizes a problem </li></ul><ul><li>Information Search: The stage of the buyer decision process in which the consumer is aroused to search for more information; the consumer may simply have heightened attention or may go into active information search </li></ul><ul><li>Alternative Evaluation: The stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set </li></ul>
  27. 27. The consumer Buying-Decision Process <ul><li>Purchase Decision: The buyer’s decision about which brand to purchase </li></ul><ul><li>Post-purchase Behavior: The stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction </li></ul>
  28. 28. The consumer Buying-Decision Process – Possible Variations <ul><li>The consumer can withdraw at any stage prior to the actual purchase if the need diminishes or no satisfactory alternative are available </li></ul><ul><li>The stages usually are of different lengths, may overlap, & some may even be skipped </li></ul><ul><li>The consumer is often involved in several different buying decisions simultaneously, & the out come of one can affect the others </li></ul>
  29. 29. Importance of Business Buying <ul><li>Companies are making less & buying more: Toyota annually buys $15 billion worth of parts, materials & services from US suppliers for use in its production both in US & overseas. When outside suppliers become this significant, buying becomes a prime strategic issue </li></ul><ul><li>Firms are under intense quality & time pressures: To reduce reworking costs & improve efficiency, firms cannot tolerate defective parts and supplies </li></ul><ul><li>Firms are concentrating their purchases: To get what they need, companies are dealing with fewer suppliers but are developing long-term “partnering” relationships with them. </li></ul>
  30. 30. Nature & Scope of Business Market <ul><li>Business market consists of all individuals & organizations that buy goods & services for one or more of the following purposes: </li></ul><ul><li>To make other goods & services: Dell buys microprocessors to make computers, & Henredon buys wood to make furniture </li></ul><ul><li>To resell to other business users or consumers: ReCellular, Inc., buys used cellular phones & wireless equipment to refurbish & sell to business customers </li></ul><ul><li>To conduct the organization’s operations: The university of Vermont buys office supplies & computer software for use in the registrar’s office </li></ul><ul><li>So, any good or service purchased for a reason other than personal or consumption is part of Business Market, and each buyer within this market is termed as a Business user. </li></ul>

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