mm.05.10 (tough)

04/11/23 23:21 Prof. U.M. Amin, CMS, JMI University, New Delhi

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Marketing ManagementMBA CP 205


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Classification and Analysis of Markets


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Learning Objectives:

• Know how consumer characteristics influence buying decisions.• Know how consumers make purchasing decisions.• Know how marketers analyze consumer decision-making behavior.• Know what is the business market, and how it differs from the consumer market.• Know who participates in the business-to-business buying process.• Know how business buyers make their decisions.



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Factors influencing Consumer Behavior


Cultural FactorsCultural Factors

Social FactorsSocial Factors

Personal FactorsPersonal Factors


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Culture

“Culture is the distinct way of life of a group of people and their complete design for living.”

“Culture refers to a set of values, ideas, artifacts and other meaningful symbols

that help individuals communicate, interpret, and evaluate as

members of society.”



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Sub-Cultures

NationalitiesNationalities

ReligionsReligions

Regional groupsRegional groups

Geographic regionsGeographic regions



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Social Classes


Upper uppersLower uppersUpper middlesMiddle class

Working classUpper lowersLower lowers


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Characteristics of Social classes• Within a class, people tend to behave alike.

• Social class conveys perceptions of inferior or superior

position.

• Class may be indicated by a cluster of variables (occupation, income, wealth and value

orientation).

• Class designation is mobile over time.



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ReferenceGroups

StatusesSocialRoles

Family

Social Factors



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Reference Groups

Membership groups

Membership groups

Primary groupsPrimary groups

Secondary groups

Secondary groups

Aspirational groupsAspirational groups

Dissociative groupsDissociative groups



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Personal factors


Personality

Wealth

Selfconcept

Occupation

Lifecyclestage

Lifestyle

Values

Age


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Family Lifecycle


Behavior changesaccording to life cycle stage

• Family• Psychological• Critical life events


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Brand Personality


SinceritySincerity

ExcitementExcitement

CompetenceCompetence

SophisticationSophistication

RuggednessRuggedness


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Model of Consumer behavior

MarketingStimuli

ProductPricePlacePromotion

OtherStimuli

EconomicTechnologicalPoliticalCultural

Consumers’Characteristics

CulturalSocialPersonal

Buyer’s decision processProblem recognitionInformation searchEvaluation of AlternativesPurchase decisionPost purchase evaluation

Buyer’s decisionsProduct choiceBrand choiceDealer choicePurchase timingPurchase amount


ConsumersPsychology

MotivationPerceptionLearningMemory


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• Consumer decision making comes about as an attempt to solve consumer problems.• No one buys a product unless one has a problem, a need or a want.• The CDP Model represents a roadmap of consumers’ minds that we as marketers can use to help us guide Product mix, communication and Marketing Strategies.• It captures activities that occur when decisions are made and depicts how consumers think, evaluate and act.

The Consumer decision Process



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Stages of Consumer Decision Process Model

Need Recognition or Problem solving

Search for Information

Pre-Purchase Evaluation of alternatives

Purchase

Consumption

Post-Consumption Evaluation

Divestment



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• Need Recognition: Need or problem recognition occurs when the consumer senses a difference between what he or she perceives to be ideal versus the actual state of affairs.

• Search for Information: Environmental influences and Individual differences are sources for search for information.

• Search can be from two sources: Internal and External . Internal search is from the memory. External search is influenced by Marketer and Non-Marketer dominated Stimuli.



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Pre-Purchase Evaluation of alternatives:

• Consumers compare, contrast and select from various products or services.• Different Consumers employ different criteria.• Evaluation of choices influenced by both individual & Environmental influences.• Attributes on which evaluations based may be salient or determinant. • Salient attributes include price, quality and reliability etc. Determinant attributes include style and finish etc.



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Purchase:

• The consumers after deciding whether to purchase or not, move through two stages. • In the first phase they choose the form of retailing and choice of retailers. For example, Electronic sale, Internet based marketing or direct marketing.• During the second phase, consumers make in store choices. Astute retailers manage the overall attributes and image of the store to ensure satisfying experience for the consumer.



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Consumption and Post consumption Evaluation:

• Consumption may be immediate or delayed.• How consumers use the products affects how satisfied they are with the purchases and determines whether they will make repurchase.• How carefully consumers use or maintain the product determines how long the product will last and when will the repurchase be made.• During post consumption evaluation stage, consumers experience satisfaction or dissatisfaction.

Classification and Analysis of

Markets


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Business Buying Behavior



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Organizational Buying

It is the decision making process by which formal organizations establish the need

for purchased products and services and identify, evaluate and chose

among alternative brands and suppliers.



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Characteristics of Business Markets


• Fewer, larger buyers• Close supplier-

customer relationships• Professional purchasing• Many buying influences• Multiple sales calls

• Derived demand• Inelastic demand• Fluctuating demand• Geographically

concentrated buyers• Direct purchasing


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Buying Situations

Straight RebuyStraight Rebuy

Modified RebuyModified Rebuy

New TasksNew Tasks



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Systems Buying and Selling


Turnkey solution desired;

Bids solicited

PrimeContractors

Second-tierContractors

System subcomponents

assembled


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The Buying centre

InitiatorsInitiators

UsersUsers

InfluencersInfluencers

DecidersDeciders

ApproversApprovers

BuyersBuyers

GatekeepersGatekeepers



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Of Concern to Business Marketers

• Who are the major decision participants?

• What decisions do they influence?

• What is their level of influence?

• What evaluation criteria do they use?



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Sales Strategies


Small Sellers

Large Sellers

Key Buying Influencers

MultilevelIn-depthSelling


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Types of Business Customers

Price-oriented

Strategic-value

Gold-standard

Solution-oriented



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Handling Price-Oriented Customers

Limit Quantity Purchased

Limit Quantity Purchased

Allow no refundsAllow no refunds

Make no adjustmentsMake no adjustments

Provide no servicesProvide no services



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Purchasing Orientations

Buying

Procurement

Supply Chain Management



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Product Related Purchasing Processes (Value/risk)

Routine ProductsRoutine Products

Leverage ProductsLeverage Products

Strategic ProductsStrategic Products

Bottleneck ProductsBottleneck Products



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Buy Grid Framework



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• The proposals received from vendors as per laid down specifications are scrutinized based on:

Past reputation. Efficiency, durability and maintainability of the product. Delivery period Terms of payment Price Guarantees offered After sales service

• Formal purchase orders are placed on selected vendor after negotiations.



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Recap:

• How consumer characteristics influence buying decisions.• How consumers make purchasing decisions.• How marketers analyze consumer decision-making behavior.• What is the business market, and how it differs from the consumer market.• Who participates in the business-to-business buying process.• How business buyers make their decisions.
