Chapter 11: Understanding Customers
User
may have little input into purchasing decision although they will be using the product once it is purchase to make sure it is effective and efficient
Descriptive research
most common type that involves counting numbers of respondents who have certain characteristics or behaviors ex surveys
New task buy
most complex buying situation for a business--the business has never purchase this good or service and does not have an existing set fop product specifications nor a preferred supplier list, usually takes the most time and involves the largest number of individuals, most riskiest
Three types of business buying decision
new task buy, modified rebuy, and straight rebuy
Modified rebuy
occurs when a business has previously purchased a product but must resist the product specifications due to a change in circumstances. Promotes reevaluation of the existing product specifications and vendor list
A business-to-business (B2B) transaction
occurs when a business sells products to another business
A business-to-consumer transaction
occurs when a business sells products to consumers
undifferentiated targeting strategy
one for which a marketer chooses to avoid the segmentation process and thats the total market as a single segment, not really common in today's age
The biggest difference between the business and consumer decision processes is that:
only businesses work from a formal preferred supplier list.
Buying center
an informational group of individuals that together make a business buying decision, composed of different roles
Product position
marketing organization makes effort to establish a unique place in the minds of its target market, relative to competitors
Gatekeeper
may be difficult to identity but controls access to the information and/or the decision-maker
Purchase decision stage
may decide not to purchase and revert back to beginning stage or decide to buy the product
Data collection
addresses carrying out the research design by deciding the exact collection procedures that will produce the type of information required.
Consumer decision process
1. Problem recognition 2. Information search 3. Evaluation of alternatives 4. Purchase decision 5. Post-purchase evaluation
The buying decision process
1. Problem recognition 2. Product specifications 3. Search for and evaluation of suppliers 4. Product and supplier selection 5. Evaluation of product and supplier performance
Steps of market segmentations
1. Selection of industry/product category/market 2. Identification of segmentation bases 3. Profile and analysis of segmentation bases 4. Selection of target market(s) 5. Development of marketing mix for each identified target market
Which of the following is an example of a B2B transaction?
A Best Buy associate sells a home theater system to the manager of an IT company.
Segmentation includes asking the questions:
Are there enough potential buyers in the segment?, will customers in the segment be accessible or can we reach them with our communications?, and will customers int he segment response differently to different marketing efforts?
Which one of the following statements is true when comparing business purchases to consumer purchases?
Compared to consumer purchases, business purchases are usually more complex, are more likely to be made by professional buyers, and have to be approved by committees and management.
A new task buy is the least complex buying situation for a business.
False
The purchaser in the buying center group is the individual who does not have the authority to sign off on the purchase agreement.
False
When a business sells products to consumers, the transaction is called business-to-consumer, or B2B
False
Which of the following is NOT one of the segmentation bases for business market segmentation?
Home address
Which one of the following is NOT used effectively as a base for segmenting business markets?
Lifestyles
Marketing research process
Problem definition, secondary research, research objectives, developing hypotheses, design of appropriate research methods, data collection, data analysis, marketing research, and follow up
A modified re-buy occurs when a business has previously purchased a product, but must revisit the product specifications due to a change in circumstances
True
An influencer is anyone inside or outside the business that can exert influence on any one of the buying center members.
True
Business buyers can be categorized into four types: producers, resellers, government, and institutions
True
Business buyers can be categorized into four types: producers, resellers, government, and institutions.
True
Customers who are the end users of the product, referred to as consumers, purchase products for their own use.
True
In business buying, a product purchase usually involves a set of specifications that have been determined by a purchasing manager or a buying group.
True
Making attempts to reduce the feeling of buyer's remorse, marketers frequently address a buyer's post-purchase evaluation through promotional efforts like follow up phone calls or e-mails.
True
Producers are businesses that manufacture goods or provide services.
True
The decider is frequently the highest-level management person involved in the decision.
True
Three types of business buying decisions are common: new task buy, modified re-buy, and straight re-buy.
True
Unlike consumers purchasing products for themselves, business buyers make purchases in the process of carrying out their business functions.
True
When Toyota introduced the Prius to environmentally-conscious consumers, it had to address several questions to determine if it was economically feasible to target this particular segment. Which one of the following is NOT one of the feasibility questions to ask about the target market?
Will suppliers be able to provide enough component parts?
Cognitive dissonane
a feeling of uncertainty about whether or not they made the right choice
Post purchase evaluation
added by marketers through promotional efforts like follow-up phone calls or emails
Influencer
anyone inside or outside the business that can exert influence on anyone of the buying center members, may or may not have direct input into the decision, rather, the input could be indirect through another member of the buying center
Differentiated target strategy
attempts to satisfy the broader marketplace by identifying multiple market segments to target, building a unique marketing mis to appeal to each segment ex. Toyota
customers who may also be _____ are ones who purchase products with the intention of either using that product in the production of another product or reselling it for a profit
business buyers
Producers
businesses that manufacture goods or provide services
Decision making process for business buyers:
can be constrained by committee process, managerial input, budgets, size of purchase, conflicting needs and goals, a buying department, and demands of other business activities
One-to-one marketing
can be described as tailoring a marketing mix to appeal to a single customer ex. www.makeyourownjeans.com
Data analysis
can include several steps but means that the researcher is processing the data collected in the previous step to put it in a form that allows interpretation and the assignment of meaning to the numbers, should match the analysis to the research objectives in step 3
Market segmentation
companies that employ a series of planning steps which help narrow the scope of market in order to target market efforts to appeal most effectively
Total market
composed of customers and potential customers who meet the criteria of ability, willingness, and authority. who can afford, have the freedom, and have the title to purchase the product
customer who are the end users of the product who purchase products for the town use are called
consumers
Profiling different types of potential customers in a given market segment can provide rich description that helps a business
develop an appropriate marketing mix
The Gap Corporation owns Old Navy, The Gap and Banana Republic. When The Gap Corporation chooses to target these three well-defined markets and develops a unique marketing mix to appeal differentially to each, it is using a(n) ________ targeting strategy.
differentiated
Developing hypotheses
educated guessed about how to solve the problem or exploit the opportunity defined in step 1
Routine response behavior
ex. purchasing a soft drink, preferences come into play and as long as the preference is available the consumer will continue to purchase it.. if the product is not available the consumer may chose an alternative or none at all which could affect the loyalty of the costumer if the product continues to be unavailable
Problem recognition stage
ex. realizing your current laptop is outdated and you are in need of a new one
Problem definition
first step, problem doesn't have to be negative, purpose of market research
Consumers purchase products:
for their own personal use and for their families' use.
Decider
highest-level management and will have budgetary responsibility for the purchase but can delate the decision to another member, this individual must take all responsibility
Institutions are important buyers of business products and include example like
hospitals, schools and correctional facilities
Segmentation, targeting and positioning (STP)
how business choose customers and establish space in the marketplace
Target market
identified market segment on which a company will focus its marketing effort, critical strategic step for an organization that influences how resources will be allocated and how the marketing mix will be created
Limited problem solving
in the middle of the decision continuum, when consumer are familiar with the product, but prefer to compare brands and stores before making purchase--buying clothes, furniture and small appliances
Design of appropriate research methods
includes exploratory research, descriptive research, and casual research
Niche market
includes only those specific customers who would enjoy a particular product
Purchaser
individual who has the authority to sign off on the purchase agreement, often carries the titles of purchasing manager or buyer and may or may not be closely involved in the actual decision process. Gives power to veto or add to any purchasing decision made by the buying center
Overall market can be referred to as
industry or product category
Exploratory research
information gathering that take place in the preliminary stages of marketing research and may be used in preparation for developing a project to address specific questions ex. focus groups
Secondary research
information that has already been gathered, step must be completed before collecting primary data. May be internal much of the info is collected and reported by government agencies or by industry trade associations
Influences on consumer decision-making
internal variables: demographic characteristics, stage of family life cycle, personality traits, lifestyle factors, psychological dimensions, motivations and structure of beliefs and attitudes. External variables: social and cultural factors like values, subculture, reference groups and family
Government of all levels
is one of the biggest purchases of B2B goods and services. ex. purchases equipment and clothing to outfit the military
Follow up
last step in marketing process and is often overlooked, ensures the research report includes action steps that can be implements and monitored to achieve the greatest success
Research objectives
outline what the primary data collection should discover in specific points, should be addressed when research method is designed and the data collection should not seek information beyond the set of research objectives that has been agreed upon
A product's position is best defined as the target market's ________ a product relative to ________.
perception of, competition
Customers perceptions of competitors in the marketplace relative to one another usually shown on a
perceptual map-- use attribute that are more important to customers
Wild Oats Market makes every effort to be a high quality grocery store. It sells organic produce, top grade cuts of meat, and fine wine. The store has a beautifully decorated interior with soft lighting and classical music. Employees are well trained to provide excellent customer service and wear attractive chef aprons. These decisions made by Wild Oats emphasize its:
positioning strategy.
Casual research
predictive and attempts to explain cause-and-effect relationships ex. conducting experiments that control variable so prediction can tell what variable impacted the other
Business usually works from a
preferred supplier list or companies that the business has previously purchased from and has investigated for product quality and financial stability
Types of business buyers
producers, resellers, government and institutions
Marketing mis
product, price, promotion and place 4Ps
In the ________ stage of the Consumer Decision Process, the buyer may decide not to purchase the product and stop the decision process or go back to a previous stage.
purchase decision
Information search stage
researching different brands, qualities of those brands, and promotional offers that make affect the final purchase decision
Business buyers that add value to products by providing transportation, storage, financing, and other services are called ________
resellers
Marketing results
results are typically presented both orally and in written report, often complex
Types of consumer decisions
routine response behavior, limited problem solving or extended problem solving
Consumer markets and business markets require a different set of
segmentation bases
Concentrated targeting strategy
selects a single segment of the market on which it focuses all of its marketing efforts, different from Differentiated because the segmentation process is used to identify a niche market
Straight rebuy
similar to the consumer's routine response where the business while automate straight rebuts so that a reorder is placed as soon as the product inventory reaches a certain point, or when it reaches a certain amount of time since the last order such as an order that is placed during the first week of every month
unlike consumer buying a purchase in business buying usually involves a set of
specification, which are determined by a purchasing manager or buying group
The result of a segmentation analysis should be the selection of one or more ____________ markets
target
The result of a segmentation analysis should be the selection of one or more ____________ markets.
target
Products position
the "unique place" and important component of the business's competitive advantage
Extended problem solving
the purchase decision carries a high level risk and is one that the consumer is willing to invest both time and effort
A(n) ________ targeting strategy is one for which the marketer chooses to avoid the segmentation process and treats the total market as a single segment.
undifferentiated
A firm can choose three different targeting strategies
undifferentiated, differentiated, or concentrated
External search
when a consumer may seek additional info by going to websites, consulting consumer reports and asking friends for advice
Internal search
when you think about what you already know about computer brands and models
Salesperson must be detective in order to find out
who player are in decision and the significance each individual's input in making the sale
Resellers
wholesalers, distributors and retailers, provide transportation, storage, financing and a variety of other value-added activities
Evaluation of alternatives stage
yielding a group of computers that comprise your consideration set, an important place for a brand to be, the time period allowed to this stage depends on the level of risk attached to making the purchase decision