B203A Q. Week 9 Marketing Chapter 4 Chapter 6

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1 B203A Q. Week 9 Marketing Chapter 4 Chapter 6 Q1) Describe a major purchase that you have made on a proper example, and discuss the different stages of your consumer decisionmaking-process. A major part of buying behavior is the decision process used in making purchase. The consumer buying decision process includes five stages: 1- Problem recognition. 2- Information search. 3- Evaluation of alternatives. 4- Purchase. 5- Post-purchase evaluation. The actual act of purchasing is only one stage in the process; the process begins several stages before the purchase itself. Not all decision processes lead to a purchase. A consumer may stop the process any time. It is also possible that a different sequence of stages will be followed, with buyers revisiting certain stages. Consumer decisions do not always include all five stages.

2 1- Problem recognition. Problem recognition occurs when a buyer becomes aware that there is a difference between a desired state and an actual condition. Sometimes a person has a problem or need but is unaware of it. Some consumers may be concerned about their weight but may not be aware that low-calorie options exist for favorite products. Marketers use sales staff, advertising, sales promotion and packaging to help trigger such need recognition. The speed of consumer problem recognition can be either slow or rapid, depending on the individual concerned and the way in which need recognition was triggered. 2- Information search. Search for information about products that will resolve the problem or satisfy the need. There are two aspects to information search: Internal search buyers search their memory for information about products that might solve the problem. If they cannot retrieve enough information from their memory to make a decision, they seek information; External search it may involve communicating with friends and colleagues, comparing available brands and prices, or reviewing television or press advertisements, and public sources including the internet. Repetition is a technique well known to advertisers, increases consumer learning of information. Consumers are more likely to be receptive to repetition when making a low-involvement purchase. Involvement refers to the level of interest, emotion and activity the consumer is prepared to expend on a particular purchase. Format the format in which information is transmitted to the buyer may also determine its effectiveness (i.e. verbally, numerically, visually). Consumers often remember pictures better than words, and the combination of words and pictures enhances learning. Evoked set is the group of products that a buyer views as possible alternatives after conducting an information search.

3 3- Evaluation of alternatives. When evaluating the products in the evoked set, a buyer establishes criteria for comparing the products. These criteria are the characteristics or features that the buyer wants/not wants. The buyer also assigns a certain salience, or level of importance, to each criterion; some features carry more weight than others. The salience criteria vary from buyer to buyer. If the evaluation stage does not yield a brand that the buyer wishes to buy, further information search may be necessary. Marketers can influence consumers; evaluation by framing the alternatives that is, by the manner in which the alternative and its attributes are described. Framing can make a characteristic seem more important and can facilitate its recall from memory. Framing affects the decision processes of inexperienced buyers more than those of experienced ones. 4- Purchase. When the consumer chooses which product or brand to buy, is mainly the outcome of the consumer s evaluation of alternatives, but other factors have an impact, too. The closeness of alternative stores and product availability can both influence which brand is purchased. During this stage, the buyer also picks the seller from whom the product will be purchased and finalizes the terms of the sale. Other issues such as price, delivery, guarantees, service agreements, installation and credit arrangements are discussed and settled. Provided consumer does not terminate the buying decision process before then, the purchase is made. 5- Post-purchase evaluation. The buyer begins evaluating the product to check whether its actual performance meets expected levels, or whether he will be satisfied or dissatisfied, and will influence future behavior. Criteria in evaluating alternatives revisited during this stage. Level of satisfaction will determine whether consumers make a complaint, communicate with other buyers or purchase the product again. The evaluation of expensive or important purchased items may result in cognitive dissonance معرفي تنافر doubts that occur as the buyer questions whether he or she made the right decision in purchasing the product. Three major categories of influence are affecting the consumer buying decision process: personal, psychological and social factors.

4 Q2) Explain what is meant by: (a) Market Segmentation (b) Segmentation bases (c) Segmentation four variables a) Market Segmentation: Market: an aggregate of people who, as individuals or within organizations, have a need for certain products and the ability, willingness and authority to purchase such products. Market segmentation: the process of grouping customers in markets with some heterogeneity into smaller, more similar or homogeneous segments. The identification of target customer groups in which customers are aggregated into groups with similar requirements and buying characteristics. Market segment: is a group of individuals, groups or organizations sharing one or more similar characteristics that cause them to have relatively similar product needs and buying characteristics. Heterogeneous markets: market in which all customers have different requirements. Segmentation Consider variables for segmenting market. Look at profile of emerging segments. Validate segments emerging. There are many ways in which customers can be grouped and markets segmented. In different markets, the variables that are appropriate change. The key is to understand the most suitable for distinguishing between different product requirements. It is important also to understand a lot about the customers in the segments. Marketers who know their targets are more likely to design an appropriate marketing mix for them. (b) Segmentation bases: Single Variable (Base) Segmentation: which is the simplest perform, is achieved by using only one variable. Example: country. The sales of one product in different countries will differ and the numbers of relevant consumers in each country will vary. A single characteristic gives marketers only moderate precision in designing a marketing mix to satisfy individuals in a specific segment. Multivariable Segmentation: to achieve multivariable segmentation, more than one characteristic is used to divide a total market.

5 Multivariable (Base) segmentation provides more information about the individuals in each segment, which may enable a company to develop a marketing mix that will satisfy customers in a given segment more precisely. Disadvantage: The more variables used, the greater number of segments likely to be identified, this proliferation/increase may reduce the sales potential of many of the segments. It is more complicated to resource and manage the proliferation of segments that result. Segmentation variable or bases are the dimensions or characteristics of individuals, groups, or businesses that are used for dividing a total market into segments. Companies must make choices about the most appropriate variable to use but they must consider the needs and buying behavior of their intended customers. In consumer markets, background characteristics like age, sex and occupation are widely used. In business-to-business markets, customer size, location and product use are often the focus. The variables chosen should relate to customers needs for, uses of or behavior towards the product or service. The selected bases should be usable and easy to measure. If individuals or businesses in a total market are to be classified accurately, the segmentation variable must be measurable. (i.e. segmenting a market on the basis of intelligence or moral standards would be quite difficult because these attributes are hard to measure accurately. Creativity is also a factor that affects the choice of segmentation variables. One-to-one marketing: instead of dealing at the mass-market or segment level, it is even possible to develop relationships with individual customers. One-to-one marketing: involves developing long-term relationships with individual customers in order to understand and satisfy their needs.

6 c) Segmentation four variables: 1- Demographic variables: demographers study aggregate population characteristics, and marketers commonly used in segmenting markets. Marketers rely on these demographic characteristics because they are often closely linked to customers needs and purchasing behavior, and can readily be measured. Age is a commonly used segmentation variable. Population statistics help marketers to understand and keep track of changing age profiles. Gender also variable used to segment markets. 2- Geographic variables: the needs of consumers in different geographic locations may be affected by their local climate, terrain, natural resources and population density. Marketers may be divided into regions because one or more geographic variables may cause customers needs to differ from one region to another. Market density refers to the number of potential customers within a unit of land area. Geo-demographic segmentation clusters people according to postcode areas and census data.

7 3- Psychographic variables: a psychographic dimension can be used by itself or combined with other types of segmentation variables. Personality characteristics are useful when a product is similar to many competing products and when consumers needs are not significantly affected by other segmentation variables. Segmenting markets according to personality characteristics could be problematic, because consumer choice and product use should vary with personality and lifestyle. Psychographic variables When motives are used to segment market, it is divided on the basis of consumers reasons for making a purchase. Individuals are grouped by lifestyle segmentation according to how they live and spend their time, the importance of items in their surroundings, their beliefs, and some socio-economic characteristics. The use of lifestyle variable is problematic, because it is so difficult to measure accurately compared with other types of segmentation variable. In addition, the relationships between psychographic variables and consumers needs are sometimes ambiguous and unproven, and the segments that result from psychographic segmentation may not be reachable. 4- Behavioristic variables: is segmenting market based on the basis of an aspect of consumers behavior towards the product. This might relate to the way the particular product is used or purchased, or to the benefits consumers require from it. The occasion on which customers buy a particular product may impact upon product choice because in different sets of circumstances different product selection criteria may be applies. Benefit segmentation is the division of a market according to the benefits consumers want from the product. By determining the benefits desired, marketers may be able to divide people into groups seeking certain sets of benefits. Behavioristic variables: Product usage individuals can be divided into users and non-users of a particular product, or be classified as heavy, moderate or light. o satisfy a specific user group, marketers must create a distinctive product, set special prices or initiate special promotion and distribution activities. How customers apply the product may also determine segmentation. The varying attitude of customers towards products constitutes another set of variables that can be used to segment markets.

8 Q3) Discuss in some details the Targeting approaches for organizations. Support your answer with examples. Targeting Decide on targeting strategy. Decide which and how many segments should be targeted. One segments have been identified, decisions about which and how many customer groups to target can be made. There are several options: 1- Adopt an undifferentiated approach, focusing on the total market. (Gas, electricity). 2- Concentrate on a single segment with one product and marketing program. 3 -Offer one product and marketing program to a number of segments. 4- Target a different product and marketing program at each of a number of segments. Q4) Discuss what is meant by Positioning The Product. Positioning Understand consumer perceptions. Position products in the mind of the consumer by communicating the desired positioning. Design appropriate marketing mix. Companies must decide precisely how and where within the targeted segments to aim a product(s), brand(s). The needs and wants of targeted customers must be translated into a tangible mix of product/service, personnel, price, promotion and place/distribution. The consumers; view of the product and where it is positioned relative to the competition is particularly critical. After all, the paying public does not always perceive a product or brand in the way the manufacturer would like.