Principles of Marketing

MARKET SEGMENTS AND CONSUMER BEHAVIOR

LC 12. describe the consumer and
business markets
a.)Business market

Business market in simple words is business to business market

where in the products or services of a particular organization are sold
to or purchased by other organization or business. It also happens in
support industries where the products that are manufactured are
components required to be assembled into the products or services
offered by some other business organization.
Marketing to B2B
When you are marketing to a B2B you want to
focus on the logic of the product. You do this by
focusing on the features of the product. There is
little to no personal emotion involved in
the purchasing decision. You want to focus on
understanding the organizational buyers and
how they operate within the confines of their
organization's procedures. What's their role?
What's important to them?
B. Marketing to B2C
When you are marketing to a consumer you want to focus
on the benefits of the product. Their decision is more
emotional. Consumers are different in that they demand a
variety of distribution channels for convenience, not so with
the B2B market.
Consumers are less likely to be interested in a lengthy
marketing message. They will want you to get right to the
point. Consumers don't want to work to understand your
benefits, instead, they will want you to clearly point out the
benefits to them.
With consumers, your message must be simple, easy to
understand.
Consumer market
Consumer market refers to a market where in the seller sells the product for a primary reason of
making profits while buyer buys the products for personal use.

What are the major differences between the two?

In consumer market the purchase might even be made when the products are not required in day to
day activities. But in business market the business has to buy to stay profitable.

The business buyer is sophisticated in terms of the process involved in buying, decision making while
on the other hand the consumer in the consumer market might not be as sophisticated

The business buyer is an information-seeker, constantly on the lookout for information and advice.
On the other hand the consumer only searches information when he requires to make a decision.
LC 13. differentiate the buying behavior and decision making
of individual/ household customer versus the business
(organizational) customer
Factors that Affect Consumer Behavior
-The way that we perceive, react, or are
affected by products and services is a
function of a host of facts.
Factors that tend to have an effect on
consumer behavior
1. Culture-This refers to the general or overall culture of a
group of people.
Note: This results to distinct market segmentts that may
even manifest distinct tastes and preferences for products
and services.
2. Social factors
-reference groups, family, roles, and status. This all
about the norms of behavior among even smaller
groups, namely the social groups where a consumer
belong to.
-all of these affect market’s behavior in terms of
deciding on what they should wear, what they should
et , who to aspire to be like, where to go, and more.
3. Personal Factors-age, life cycle stage, occupation, and
economic circumstances.
Notes: The taste and preferences of younger people will
be different from that of more senior individuals.
-Disposable income defines what people can and cannot
buy, while physical location limits access to services.
4. Psychological Factors –motivation,
perception, learning, beliefs, and
attitudes. This is how the individual
behaves and behavior is very intimate
thing.
-It is the results of how we are raised,
who we interacts with, what our
histories are and much more.
Note: Culture, for one, can heavily affect
product design and marketing. Often,
because we believe so strongly in the
wisdom of our “crowd,”we do not even
bother to step baack to assess whether or
not our beliefs are in fact sound.
-In South Korea, there is a very pervasive belief
that leaving an electric fan running with the
windows all shut can cause serious physical
harm or death. Even with the absence of
scientific proof to very this and with the rest of
the world not believing this, South Koreans are
so convinced of this fact that electric fans must
have auto shut-off timers on then or else they
will not be sellable. (McRaney 2013)
Income Vs. Socio Economic Class
a. Income –personal demographic factor
-It is a factual number. It answers the question of
“How much do you earn?” or more commonly among
researchers, “How much is your household family
income.
B. Socio-economic Class (SEC) is an indicator of the
kind of group that a consumer feels he or she belong
to.
-It is a social factor in the sense that it reflects the
consumption reality that the individual strongly
believes in.
For instance, those who belong to the
country’s upper socio-economic classes may
firmly believe that having a car is a non-
negotiable necessity. But those who belong
to lower income incomes classes, this not
the reality that they see. Instead, a car is
perceived to be a luxury.
Age VS. Lifeycle
Age is just a number, where consumers
currently are in their lifecycles pretty
much determine what products and
services they will likely to spend to.
The following are the generally accepted
lifecycle stages:
A. Bachelor Stage-Young, single and
independent
B. Newly Married Couples-young no children,
alsow know as DINKS(Double Income, NO KIDS)
C. Full Nest I –families with children, youngest
child below six years.
D. Full Nest II –families with children, youngest child
six years or older.
E. Full Nest III-families with dependent children.
F. Empty Nest I –older married couples, no children
living with them.
G. Empty Nest II. Older married couples, retired, and
no children living with them.
H. Solitary Survivor I –older, no family, and supporting
self
I. Solitary Survivor II- older, no family, and retired.
For instance, Bachelors will likely spend a lot on personal
effects such as portable electronic devices and clothes. Newly
married couples will tend to spend a lot on furnishing their
homes, dining out, and for travel. Both once they evolved into
a full nest, they will tend to prioritized spending for the
children, such as clothing, education, and cut spending on
items that they used to buy. Meanwhile, the Empty Nest
Stage typically sees the couple suddenly flush with newly
disposable income income because they are no longer
supporting their children and this leads to resurgence in
personal spending.
Buying Roles in the Buying Process
1. Initiator. This is the person who first
suggests the idea of buying a particular
product or services.
2. Influencers. These people’s views or
advices can influence the eventual
selection of what to buy.
3. Decider. The person (or persons ) who
ultimately has the final say on what to buy.
4. Buyer. The person who makes the actual
purchase.
5. Users. The person or persons who end up
actually using the product.
-Note: The roles become more pronounced as
purchases become more complex and risky.
Types of Buying Behavior
-When consumers are motivated they can now proceed to
engage in number of behaviors that may deem necessary
inorder to achieve their goals:
1. information gathering
2. information processing
3. generating conclusions about the products.
Note: The level of motivation, however, will vary depending on
how the consumer relates with the object of involvement or the
product being sought.
Classification of buying behavior:
A. Consumer’s Perception of the Product Category
-consumer can perceived a product category to be simple,
complex or somewhere in between.
B. Consumer’s attitude toward the product
-is the product expensive, very important, or durable in
nature?(High-effort or low effort behavior)
1. Complex Buying Behavior
- It arises for important purchases where there are so
many different features and attributes with each
brand having different manifestation of each feature.
-The consumer is cognizant of these differences.
-The consumer undertakes a lot of searching and
analyzing before any purchases.
Ex. Car, houses, durable goods etc.
2. Dissonance Reducing Behavior
-It occurs when a consumer wants to keep life simple,
and yet the risks faced with the buying decision for
an important purchases are perceived to be high.
-The consumer may therefore resort to decisions that
simplify life, such as buying the brand that most
people choose, relying on the decision of a trusted
friend, or relying on the word of salesperson.
-This is why appliances and consumer
electronics, for instance, benefit greatly
from having popular brands. Many
household appliances tend to be bought
this way.
3. Variety-seeking behavior
-It occurs when the product involves minimal risks, but
there are so many choices, each with its own features and
attributes.
-The consumer may opt to try each product at least once,
leading to trying of a wide variety of products.
-This is how consumers may likely to respond when faced
by the huge breadth of offerings for instance snack foods
in groceries. This is also what lead “foodies” to try
different restaurants on different dates.
4. Habitual Buying Behavior
-It happens when consumers feel that learning about
the different competing products is not worth it, so
they would rather select the product that they are
most comfortable with.
-This is the outcome that is hoped for by many fast-
moving consumer goods, such as personal care
products, that seek to make consumers buy their
products out of habit.
Emotional VS. Logical Decisions
-Two brains:
1. Emotional Driven-inherited from our ancestors
and it is highly attuned to our sensory experiences.
2. Logical Brain-rational, very objective, and with
which we hope and assume manages to control all of
our decision-making.
References
https://www.thebalance.com/b2b-vs-b2c-marketing-2295828
http://careerride.com/Marketing-business-consumer.aspx