Marketing Ch. 5 & 6

Consumer Buyer Behavior model

Environment : Marketing Stimuli Product, Price, Place, Promotion Other Economic, technological, social, cultural Buyers Black Box: Buyers characteristics, buyers decision Process Buyer Responses buying attitudes and preferences purchase behavior: what the buyer buys, when, where, and how much brand engagements and relationships :

Market Targeting

Evaluating Market Segments - in evaluating ^ a firm must look at three factors, segment size and growth, segment structural attractiveness, and company objectives and resources. Selecting Target Market Segments - After evaluating different segments, the company must decide which and how many segments it will target.

How do social factors influence consumers behavior

Groups and social networking, Word of mouth influence, opinion leaders, online social networking

Not all brand differences are meaningful or worthwhile , and each difference has the potential to create company costs as well as customer benifits. A defference is worth establishing to the extent that it satisfies the following criteria:

Important - The difference delivers a highly valued benefit to target buyers Distinctive - Competitors do not offer the difference or the company can offer it in a more distinctive way Superior - The difference is superior to other ways that customers might obtain the same benefit Communicable - The difference is superior to other ways that customers might obtain the same benefit Preemptive - Competitors cannot easily copy the difference Affordable - Buyers can afford to pay for the difference Profitable - The company can introduce the difference profitably

Differentiation and Positioning

Positioning Map - in planning their differentiation and positioning strategies, marketers often prepare perceptual positioning maps that show consumer perceptions of their brands, versus those of competing products on important buying dimensions. Choosing a Differentiation Positioning Strategy - A brands positioning must serve the needs and preferences of well defined target markets

Choosing a differentiation and Positioning Strategy

- Identifying Possible Value Differences and competitive Advantages - Choosing the right competitive advantage - Selecting an overall Positioning strategy - Developing a positioning statement

5 requirements for effective segmentation

. Measurable - The size, purchasing power, and profiles of the segments can be measured Accessible - The market segments can be effectively reached and served Substantial - The market segments are large or profitable enough to serve. A segment should be the largest possible homogeneous group worth pursuing with a tailored marketing program. It would not pay, for example, for an automobile manufacturer to develop cars especially for people whose height is greater then seven feet. Differentiable -The segments are conceptually distinguishable and respond differently to different marketing mix elements and programs. If men and woman respond similarly to marketing efforts for soft drinks, they do not constitute separate segments. Actionable - Effective programs can be designed for attracting and serving the segments. For example, although one small airline identified seven market segments its staff was to small to develop separate marketing programs for each segment.

The Buyer Decision Process for new products

1. Adoption Process - the mental process through from which an individual passes from first hearing about an innovation to final adoption 2. Individual Differences in Innovativeness - people differ greatly in their readiness to try new products, in each product area there are early pioneers and early adopters. Others adopt new products much later 3. Influence of Product Characteristics on rate of adoption - The characteristics of a new product affect its rate of adoption. some products catch overnight (Iphone) some products take a longer time to gain acceptance ( electric cars)

What are the 5 stages in the adoption process?

1. Awareness -The consumer becomes aware of the new product but lacks information about it 2. Interest - The consumer seeks information about the new product 3. Evaluation - The consumer considers whether trying the new product makes sense 4. Trial - The consumer tries the new product on a small scale to improve his or her estimate of its value 5. Adoption -The consumer decides to make full and regular use of the new product

5 Characteristics affecting consumer Behavior

1. Culture ( culture , sub culture, social class) 2. Social ( groups and social networks , Family, Roles and status ) 3. Personal ( Age and life-cycle stage occupation, Economic situation lifestyle, personality and self concept) 4. Psychological ( Motivation, Perception, Learning, Beliefs and Attitudes) 5. Buyer ( Our buying decisions are

Major Segmentation Variables for consumer Markets

1. Geographic ( nations, religions, states, counties, cities, neighborhoods, population density (urban, suburban, rural) climate) 2. Demographic ( age, life cycle stages, gender, income, occupation, education, religion, ethnicity, generation) 3. Psychographic ( social class, lifestyle, personality) 4. Behavioral ( Occasions, benifits, user status, usage rate, loyalty status)

5 Adopter groups

1. Innovators - ventursum , they try new ideas at some risk 2. Early adopters - guided by respect, they are opnion leaders in their communities and adopt ideas early but carefully 3. Early mainstream -are deliberate , although rarley leaders, they adopt new ideas before the regular person 4. Late mainstream -skeptical they adopt an innovation only after a majority of people have tried it 5. Lagging adopters -tradition bound - they are suspicious of changes and adopt the innvovation only when it has become somthing of a tradition itself

The Buyer Decision Process

1. Need Recognition - The buying process starts when the buyer recognizes a problem or need 2. Information Search - Once a consumer is interested in a product they may or may not search for more information through various ways 3. Evaluation of alternatives - A consumer decides between which brands through a series of different tests depending on what they want and who they are 4. Purchase decision - the consumers purchase decision will be to buy the most preferred brand however mainly two things can influence this , one is attitudes of others ( if they say get cheap) another is situational factors ( come into a lot of money) 5. Post purchase Behavior - The marketers job does not ends when the product is bought, after purchasing the product the consumer will either be satisfied or unsatisfied.

Maslows Hierarchy of needs

1. Physiological needs ( Hunger, thirst ) 2. Safety Needs ( Security, Protection) 3. Social Needs ( Sense of belonging, love) 4. Esteem needs ( Self esteem, recognition, status) 5. Self actualization needs ( Self-development and realization)

***Stages of the business buyer decision making

1. Problem recognition 2.general need description 3. product specification 4. supplier search 5. proposal solicitation 6.Supplier selection 7. order-routine specification 8. Performance review

What are the five characteristics that are important in influencing an innovations rate of adoption

1. Relative advantage - The degree to which the innovation appears Superior to existing products. All-electric cars require no gas and use clean, less costly energy. This accelerated their rate of adoption. However , they have limited driving range before recharging and cost more initially, which will slow the adoption rate Compatibility - The degree to which the innovation fits the values and experiences of potential consumers. Electric cars are driven the same way as gas-powered cars. however they are not compatible with the nations current refueling network. Plug-in electric charging stations are few and far between. Increased adoption will depend on the development of a national network of recharging stations, which may take considerable time. Complexity - The degree to which the innovation is difficult to understand or use electric cars are not different or complex to drive, which will help to speed up adoption. However , the "conceptual complexity" of the new technologies and concerns about how well they will likely work slow down the adoption rate. Divisibility - The degree to which innovation may be tried on a limited basis. Consumers can test-drive electric cars, a positive for the adoption rate. However current high prices to own and fully experience these new technologies will likely slow adoption communicability - The degree to which the results of using the innovation can be observed or described to others. To the extent that electric cars can lend themselves to demonstration and description, their use will spread faster among consumers.

Market Segmentation

1. Segmenting Consumer Markets - there is no single way to segment a market. a marketer has to try different segmentation variables alone and in combination to find the best way to view market structure 2. Segmenting Business Markets - Business markets can be segmented geographically, demographically, or by benefit sought, user status, usage rate, and loyalty status. yet business marketers also use some additional variables, such as customer operating characteristics, purchasing approaches, situational factors, and personal characteristics. 3. Segmenting International Markets - few companies have either the resources or the will to operate in all or even most, of the countries that dot the globe. Companies can segment international markets using one or a combination of several variables.

Market-Targeting Strategies

1. Undifferentiated (mass) marketing 2. Differentiated (segmented) Marketing 3. Concentrated (Niche) Marketing 4. Micro marketing (local or individual marketing)

Major influences of business buyer behaviour

1. environmental -the economy -supply conditions -technology -politics/regulation -competition -culture and customs 2.Organizations -objectives -strategies -structure -systems -procedures 3. Interpersonal -influence -expertise -authority -dynamics 4. Individual - age/education -job position -motives -personality -preferences -buying styles 5. Buyers