marketing behavior and segmentation analysis

• Before the era of digital technology, marketing behavior focused on traditional forms of advertising like print media, television, and radio
• Companies heavily relied on mass marketing techniques to reach a broad audience with their messages
• With the rise of the internet and social media, marketing behavior has shifted, giving companies access to customer data for more precise audience targeting
• Consumer market also known as Business-to-Consumer (B2C) comprises individuals who buy goods and services for personal use
• Consumer preferences, needs, and buying behaviors influence the consumer market
• Consumer buying roles:

  • Initiators suggest the idea of buying
  • Influencers influence the selection
  • Buyers make the actual purchase
  • Deciders have the final say
  • Users are the product users
• Consumer buying behavior involves the study of individuals' processes when searching for, evaluating, and purchasing products or services
• Four types of consumer buying behavior:

  • Complex buying behavior
  • Dissonance-reducing buying behavior
  • Variety-seeking buying behavior
  • Habitual buying behavior
• Industrial market also called Business-to-Business (B2B), involves businesses buying and selling goods and services to produce or operate other products or services
• Organizational buying roles:

  • Users are the ultimate product users
  • Influencers influence the purchase decision
  • Deciders make the purchase decisions
  • Approvers oversee purchase decisions
  • Buyers are responsible for the actual purchase
  • Gatekeepers screen or prevent information from reaching participants
  • Initiators identify the problems
• Industrial buying behavior is characterized by a more rational approach than consumer buying behavior, focusing on efficiency and profitability
• Factors influencing marketing behavior:

  • Economic factors
  • Personal factors
  • Psychological factors
  • Cultural and social factors
• Factors influencing consumer buying behavior:

  • Economic factors
  • Personal factors
  • Psychological factors
  • Cultural and social factors
• Factors influencing industrial buying behavior:

  • Business environment
  • Organizational factors
  • Interpersonal factors
  • Individual factors
• Stages of the consumer decision-making process:

  • Stage 1: Need recognition and problem awareness
  • Stage 2: Information search and processing
  • Stage 3: Identification and evaluation of alternatives
  • Stage 4: Purchase decision
  • Stage 5: Post-purchase behavior
• Customers begin to comprehend how to utilize the product-service mix to realize the value in the early stages
• Definition of a target market:

  • A specific group of customers a business aims to reach with its products or services
  • Consists of individuals or businesses with common characteristics, needs, and preferences
  • By focusing on a specific target market, businesses can optimize their marketing efforts and increase the chances of attracting and retaining loyal customers
• Substantial target market example:

  • Apple Inc. targets a substantial market with products like iPhones, iPads, MacBooks, and Apple Watches
  • Apple captures the attention of tech enthusiasts, professionals, students, and older adults
• Financially capable target market example:

  • Luxury car brand like Ferrari targets financially capable individuals who value exclusivity, craftsmanship, and prestige
• Reachable target market example:

  • Spotify targets music enthusiasts of all ages with a vast library of songs and podcasts
• Homogenous target market example:

  • Nike's branding and advertising campaigns are centered around inspiring and empowering athletes
• Market segmentation:

  • Process of dividing the target market into smaller, more defined segments based on common characteristics or needs
  • Involves analyzing the entire market and identifying distinct consumer groups with similar preferences, behaviors, and purchasing patterns
• Complex buying behavior – This buying behavior is encountered when there is high consumer involvement in a purchase, and there are significant perceived differences among brands – when the product is expensive, risky, infrequently purchased, and highly self-expressive.
• Dissonance-reducing buying behavior – This refers to the consumer buying behavior in situations characterized by high consumer involvement but few perceived differences among brands
• Variety-seeking buying behavior – This refers to the consumer buying behavior in situations characterized by low consumer involvement but significant perceived brand differences. There is minimal risk involved. There are many products, each with its features and attributes.
• Habitual buying behavior – This refers to consumer buying behavior in situations characterized by low consumer involvement and few significant perceived brand differences. Consumers choose a product they are most comfortable with or usually buy out of routine or habit.
• Two (2) Types of Industrial Buying Behavior:

  1. Make – Some businesses do not always purchase since they can make the product or provide the service using their resources.
  2. Systematic Buying – Businesses develop specific and well-defined purchasing processes and carefully consider all available options before making a purchasing decision.
• The three (3) different purchasing situations are as follows:

  1. New purchase – In a new purchase situation, the behavior of an organization involves purchasing for the first time.
  2. Modified purchase – In a modified purchase, the organization already has experience with a similar product or service, but the new purchase has some alterations or improvements.
  3. Repeat purchase – In a repeat purchase scenario, the organization has previously bought the same product or service and is making a similar purchase again.
• Economic factors influence consumer market behavior by impacting decisions and actions of consumers regarding purchasing goods and services
• Personal factors influencing consumer market behavior include individual characteristics, traits, and preferences that affect purchasing decisions
• Psychological factors are internal forces that influence an individual's behavior and decision-making in the consumer market
• Cultural and social factors significantly impact consumer behavior by shaping attitudes, values, beliefs, preferences, and purchasing decisions
• Substantial:

  • The chosen target market should be big enough in terms of quantity and/or total consumption capability
• Financially capable:

  • The chosen target market should have the financial capabilities to pay for the purchase price of the product or service
• Reachable:

  • The chosen target market should be within reach to distribute the product
  • It must also be within reach of the various marketing activities
• Homogenous:

  • Ensures that marketing activities are efficient and effective
  • The chosen target market should be reacting similarly to specific marketing stimuli
• Requirements for effective market segmentation according to Kotler (2018):

  Measurable:

  • Market segments' size, purchasing power, and business profiles can be measured
  • Example: Baby products industry
• Requirements for effective market segmentation according to Kotler (2018):

  Accessible:

  • Businesses can reach and serve the market segments
  • Example: Clothing industry focusing on inclusive fashion for people with disabilities
• Requirements for effective market segmentation according to Kotler (2018):

  Substantial:

  • Businesses serve large or profitable market segments
  • Market segment must be the largest possible homogeneous group worth pursuing with a customized marketing program
• Requirements for effective market segmentation according to Kotler (2018):

  Differentiable:

  • Market segments are theoretically distinguishable and respond differently to various marketing mix elements and programs