Marketing Segmentation

Chapter 5: Segmentation is critical to the success of most firms and improves the standard of living. >> goal is to identify sepcific customer needs, then design a marketing program to satisfy those needs >> the firm must have a comprehensive understanding of its current customers motivations, behaviors, needs and wants
*buyer behavior is irrational and unpredictable; 5 stages; doesn’t always follow stages and can be swayed by brand loyalty; what and where to buy. 5 stages are needs recognition, information search, evaluation of alternatives, purchase decision, post purchase evaluation.

*need recognition: need/want/demand

*info search: passive and active info search>> sources are internal (personal) external (ads)

Amount of time effort and expense dedicated to info search depends on, degree of risk (financial/social/emotional/personal) >> amount of expertise with the product >> actual cost of the search (time/$) >> evoked set: narrowing down potential choices to meet consumer needs and represents the outcome of info search.

*C’s evaluate products as bundles of attributes > each attribute has a different level of importance (brand, product features, aesthetic, price) >> priority of choice criteria can change during the process.

*purchase decision: intervening factors unforeseen circumstance; angered by the sales person/manager; unable to obtain financing; customer changes mind. >> marketers overcome by reducing the risk making the buying easy key issues in this stage are product availability, possession utility

*postpurchase eval: possible outcomes are delight, satisfaction, dissatisfaction, cognitive dissonance >> factors that affect the consumer buying process, decision making complexity, individual influences, social influences, situational influences (physial and spatial influences, social and interpersonal, temporal, purchase task or product usage, consumer dispositional aka stress.

*buyer behavior in business markets: 4 types of markets; commercial, reseller, government and institutional. Unique characteristics of business markets are buying center, hard/soft cost, reciprocity and mutual dependence.

>> Differentiated Marketing dividing the total market into groups of customers having relatively common or homogenous needs; • Developing strategies to pursue one or more of these groups • Multi-segment approach • Attracting buyers in more than one segment by offering a variety of products that appeal to different needs • Market concentration • Focusing on a single market segment. >> • one-to-one marketing • Creating an entirely unique product offering for each customer • mass customization • Extension of one-to-one marketing • Provides unique solutions to individual customers on a mass scale • permission marketing • Customers choose to become part of firm’s target market • Key advantage - Customers are already interested in the product offering