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The document discusses two types of entities in the consumer market: business users and ultimate consumers. Business users purchase goods and services for purposes like resale or use in operations, while ultimate consumers purchase for personal or household use. The key distinction is whether the purchase is for business or consumer reasons, regardless of the actual item being purchased.

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0% found this document useful (0 votes)
21 views40 pages

CB BB BBBBBB

The document discusses two types of entities in the consumer market: business users and ultimate consumers. Business users purchase goods and services for purposes like resale or use in operations, while ultimate consumers purchase for personal or household use. The key distinction is whether the purchase is for business or consumer reasons, regardless of the actual item being purchased.

Uploaded by

vidur 17
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Two Consumer Entities

1
Organizational/business buying
• Any good or service purchased for a reason other than personal or
household consumption is part of the business market.

• Each buyer within this market is termed a business user.

• The activity of marketing goods and services to business users, rather than
to ultimate users, is business marketing.

• A firm performing the activity is a business marketer.

• The distinction of whether a good or service is a consumer or business


product depends on the reason it is purchased, not on the item itself!
Nature and Scope of the Business Market
• The business market consists of all individuals and organizations
that buy goods and services for one or more of the following
purposes:
– To make other goods and services
– To resell to other business users or to consumers
– To conduct the organization’s operations
Market structure and pattern of demand:
– Geographically concentrated
– Fewer but large buyers
– Derived demand
Organizational buying motives:
– Group based decision making
– Technical knowledge
– Rational motives dominate
Business Buying Process
CLASSIFYING BUSINESS BUYING SITUATIONS
• Business buying behavior involves degree of effort involved in the
decision and the levels within the organization in which these decisions
are made.
Straight Rebuying
•A recurring purchase decision in which a customer reorders a product
that has satisfied needs in the past.(office supplies, bulk chemicals)
• Purchaser see little reason to assess competing options.
• Marketers who maintain good relationships with customers can go a
long way toward ensuring straight rebuys.
• High-quality products.
• Superior service.
• Prompt delivery.
Modified Rebuying
• Purchaser willing to reevaluate available options.
• May occur if supplier has let a rebuy circumstance deteriorate
because of poor service or delivery performance.
Replacing old softwares with updated versions
New-Task Buying
• First-time or unique purchase situations that require
considerable effort by the decision makers.
• Most complex category of business buying.
• Often requires purchaser to consider alternative offerings and
vendors.
New CCTV based security systems, boom barriers, biometric
attendance machine.
Factors Influencing Business Buyer
Behavior
Top 10 Ranked Indian Groups in Terms of Consumers’
Trust and Respect of Privacy
Top 10 Companies
• Tata Group
• Infosys
• HDFC Group
• L&T
• Sundaram / TVS
• Mukesh Ambani Group
• Aditya Birla Group
• Anil Ambani Group
• ICICI Bank
• Airtel
8
• Problem Recognition
– Internal or external stimuli

• General Need Description


– Buyer determines the needed item’s characteristics and required
quantity.

• Product Specification
– Development of the items technical specification product value
analysis (PVA) is done.
– PVA is an approach to cost reduction in which components are
carefully studied to determine if they can be redesigned or
standardized or made by cheaper methods of production

• Supplier Search
– Identification of the most appropriate supplier

• Proposal Solicitation
– Buyer invited qualified suppliers to submit proposals
• Supplier Selection
– Buying center will specify desired supplier attributes and indicate
their relative importance
– It rates each supplier on the identified attributes
• Price
• Supplier reputation
• Product reliability
• Service reliability
• Supplier flexibility

• Order Routine Specification


– Buyer negotiates the final order listing the technical specifications,
the quantity needed, the expected time of delivery, return policies,
warranties etc.

• Performance Review
– Supplier evaluation can be done by
• Contacting the end user and asking for feedback
• Buyer may rate the supplier on various criteria using weighted score
method
Growth of consumer research
• Consumer research is an extension of
marketing research.
• Emphasis on consumer behavioral aspects.
• Earlier objectives of consumer research were:
• To determine why consumers made
purchasing decision.
• To understand how consumers would react to
promotional messages
Research techniques
• 1. Qualitative research technique: its findings
give insights on psychological aspects of
consumer behavior which help in generation
of new product ideas.
• 2. Quantitative research technique: It helps in
analyzing the likely behavior to be adopted by
the consumer based on various promotional
inputs.
Consumer Research:
Methods of Studying Consumer Behavior
1. Observation
• In-home observation: examining how and when
consumers use and consume products in their households
• Shadowing: following and observing consumers in the
shopping and consumption processes. Researchers may
ask questions about reasons for behaviors
• Physiological methods: Techniques borrowed from
medicine, psychology and other sciences including
cameras to measure eye movement, galvanic skin
response, and MRI
2. Interviews and Surveys
• Surveys: efficient method for gathering information
from a large sample of consumers by asking questions
and recording responses (telephone and Internet
surveys, mall intercepts, and mail questionnaires)
• Focus Groups: a group discussion led by a
moderator skilled in persuading consumers to thoroughly
discuss a topic of interest
• Longitudinal Studies: repeated measures of
activities over time to determine changes in opinions,
buying, and consumption behaviors
3. Experimentation
• Attempts to understand cause-and-effect relationships
by carefully manipulating independent variables to
determine how these changes affect dependent
variables
• - Laboratory experiment
• - Field experiment
• Independent variables might include number of
advertisements and package design
• Dependent variables might include purchase intent or
behavior
4. Consumption Research
• Builds on the three primary research
methods to examine how people use
products and services rather than how they
buy them
• May use ethnographic tools to under-stand
how values and culture influence usage of
products and other behaviors
• May identify new uses for existing products
or new product to satisfy unmet or changing
consumer needs
Class test
• Differentiate between consumer and
customer with suitable examples.
• How present marketing concept evolved from
the production concept?
• What is the process of STP? Why it is so
important to understand the consumer
behavior ?Give examples.
Segmentation: Learning Objectives
1. To Understand Why Market Segmentation Is
Essential.

2. To Understand the Criteria for Targeting


Selected Segments Effectively.

3. To Understand the Bases for Segmenting


Consumers.
18
Why Segmentation is Necessary

• Consumer needs differs

• Differentiation helps
products compete

• Segmentation helps
identify media

19
Positioning
The value
proposition,
expressed through
promotion, stating
the product’s or
service’s capacity
to deliver specific
benefits.

20
Criteria for Effective Targeting

21
Bases for Segmentation

22
Discussion Questions
• Considering the largest bank in your college’s city or
town:

– How might consumers’ needs differ?

– What types of products might meet their needs?

– What advertising media makes sense for the different


segments of consumers?

23
Consumer-Rooted Segmentation Bases

24
Demographic Segmentation

25
Demographic Profile of India

26
Demographic Profile of India

27
Demographic Profile of India

2010 (Estimate)

28
Income
Category Yearly Income Nature Remarks
The very rich INR> 200,000 Benefit maximizers Own cars, PCs

The consuming class $900-&4500 Cost – Benefit Have 70% branded


INR<200,000 Optimizers consumer goods

The climbers $500-$900 Cash constrained Have at least one


INR> 40,000 benefit seekers durable (sewing
machine, mixer,
television)

The aspirants $350-$500 New entrants into Have bicycles,


INR>20,000 consumption radios, fans

The destitutes <$400 Hand – to – Mouth Not Buying


INR < 20,000 Existence
Geodemographic Segmentation
• Based on geography and demographics

• People who live close to one another are


similar

• “Birds of a feather flock together”

30
Personality Traits
• People often do not identify these traits because
they are guarded or not consciously recognized

• Consumer innovators

– Open minded

– Perceive less risk in trying new things

31
Lifestyles

• Psychographics

• Includes activities,
interests, and opinions

• They explain buyer’s


purchase decisions and
choices

32
Discussion Questions
• How might you differ from a person with
similar demographics to yourself?

• How would this be important for marketers?

33
VALS Segmentation

BELIEVERS
STRIVERS
INNOVATORS
SURVIVORS
THINKERS
• Be Indian,EXPERIENCERS
Buy Indian
ACHIEVERS
MAKERS
•• Are Are brand
Enjoyimage conscious
the finer
loyalthings
••• •Are not
Slowfor
Follow
Attracted
Shop interested
tofashion
change
comfort,
to premium in image
habits
durability, /value
products prestige
• Use Limited
Receptive
coupons incometo but
& watch new carry
for sale credit
products,
••Like Look educational
•Spend
balances
•technologies
Prime for
much
Unimpressed bargains
target &for
income
by &
distribution public
on of
variety
luxuries socializing
&productsaffair
buy basics
programming
• Trust advertising
•• •Buy Watch
Spend
Frequent TV
on more
vendors
ontoimpulse
Average
Listen TV
radio than
clothing
watchersof&average
personal
wide varietycare
of
•publications
Read
•products widely
Watch TV often & often
Readauto,
•• •Read
Heavy
Read retirement,
users
business of
home,news home & &
packaged
mechanics, selfgeneral
and
fishing,
help
interest
Prefer
Light
•outdoor TV
TV
electronic magazines
Read women
publications to reading
viewers
media
magazines magazines

34
Socio-Cultural Values and Beliefs
• Sociological = group

• Anthropological = cultural

• Include segments based on

– Cultural values

– Sub-cultural membership

– Cross-cultural affiliations

35
Consumption-Specific
Segmentation Bases

36
Consumption-Specific
Segmentation
Usage-Behavior
• Usage rate

– Awareness status

– Level of involvement

37
Consumption-Specific
Segmentation
Usage-Behavior
• Usage-situation segmentation

– Segmenting on the basis of special occasions or


situations

– Example : When I’m away on business, I try to


stay at a suites hotel.

38
Benefits Segmentation
• Benefits sought represent consumer needs

• Important for positioning

• Benefits of media

39
Benefits Visiting Tourists Seek in
National Park
Segment Description
Environmentalists Interested in an unpolluted, un-spoilt natural environment
and in conservation. Not interested in socializing,
entertainment, or sports. Desire authenticity
and less man-made structures and vehicles
in the park.

Want-it-all Tourists Value socializing and entertainment more than


conservation. Interested in more activities and
opportunities for meeting other tourists. Do not
mind the “urbanization” of some park sections.

Independent Tourists Looking for calm and unpolluted environment,


exploring the park by themselves, and staying at
a comfortable place to relax. Influenced by word
of mouth in choosing travel destinations.
40

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