1. Module Three Market Characteristics
Customer Behavior
Module Three
Market Characteristics

2. Market Environment
the market environment divided into two broad classes:
market characteristics.
market context:
refers to the man–made market forces (as opposed to the nature made forces) of the market as a physical place that affect customer needs and wants. It has three components: economy, government policy, and technology.
Whereas the geophysical market characterize remain largely unchanged over a person’s lifetime, the market context can change rapidly and can result in discontinuity.
We divide the market environment into two broad classes: market characteristics and market context. Market Characteristics refer to the physical Characteristics of the surroundings in which customers select, use, and pay for products and services in both household and business markets. There are three physical characteristics of a place: climate, topography, and ecology.
Market context refers to the man–made market forces (as opposed to the nature made forces) of the market as a physical place that affect customer needs and wants. It has three components: economy, government policy, and technology.
Whereas the geophysical market characterize remain largely unchanged over a person’s lifetime, the market context can change rapidly and can result in discontinuity.
Customer Behavior

3. Market Characteristics
refer to the physical Characteristics of the surroundings in which customers select, use, and pay for products and services in both household and business markets. There are three physical characteristics of a place: climate, topography, and ecology.
Economy
Climate
Topography
Government
Ecology
Technology
EconomyClimateTopographyGovernmentEcologyTechnology
The market characteristics Climate, Topography and Ecology – influence customers needs as opposed to wants. For example, customers need air conditioning year round in their homes, offices. In business settings, employees are not required to wear a tie, jacket, or business suit in tropical countries such as Indonesia, India, and Mexico, in contrast to the more formal dress codes of northern countries.
Figure 1 Environmental Determinants of Customer Behavior
Customer Behavior

4. Climate
Climate is the first major component of the geophysical market environment. It consists of temperature, wind, humidity, and rainfall in an area. The patterns of these four elements vary on different locations of the earth, depending on latitude – the distance north or south from the equator.
Consider why the per capita annual consumption of Coca cola is only 64 bottles in some countries but as many as 400 bottles per year in others. Why? The reason is not immediately obvious. Most managers assume that it is due to differences in per capita income or culture, availability of substitute beverages, and poor quality of drinking water. While these factors also contribute, the single most important factor is climate.
Generally, people living in colder climate countries tend to drink a lot less Coca- cola than those in warmer countries. For example, Swedish people drink a lot less Coca- cola (less than two bottles per month) than do people living in Mexico (more than 30 bottles per month).
Climate is the first major component of the geophysical market environment. It consists of temperature, wind, humidity, and rainfall in an area. The patterns of these four elements vary on different locations of the earth, depending on latitude – the distance north or south from the equator.
Customer Behavior

5. Types of climate There are four basic types of climates:
Equatorial: Such as The Amazon valley, central Africa and India
Desert: Such as Arabia, Southwest United States and Mexico
Temperate Zone: North and South of the equator
Polar Zone: North and South pole
Customer Behavior

6. Effects of climate
Climate influences all forms of life; it plays a significant role in the development of human culture.
Climate affects all three areas of people’s basic needs:
Food
Clothing
Shelter
Climate influences all forms of life; it plays a significant role in the development of human culture. Since the beginning of civilization, climate has been a determinant of what crops could be grown and what types of animals could be raised in particular geographic areas. Climate affects all three areas of people’s basic needs:
Food
Clothing
Shelter
Customer Behavior

7. Food
Food Consumption patterns differ dramatically between the tropical and arctic countries
foods in Mediterranean countries contain more spices than in arctic countries.
the closer to the equator, the spicier and hotter the food gets.
Food Consumption patterns differ dramatically between the tropical and arctic countries. In the colder arctic countries, there is a lot more reliance on animals for food as well as clothing. Northern Europeans eat more red meat and much less fruits and vegetables compared with southern Europeans. Similarly, foods in Mediterranean countries contain more spices than in arctic countries. In general the closer to the equator, the spicier and hotter the food gets.
Customer Behavior

8. Clothing
There are striking differences in clothing across different climates, with respect to materials, design and style.
In warmer countries, the clothing style tends to be loose and flowing, and color preferences also tend towards brighter colors and flower patterns: in comparison, people in colder climates tend to use darker or basic pastel colors.
There are striking differences in clothing across different climates, with respect to materials, design and style. People living in colder climates tend to rely more on wool and leather; those living in warmer climates rely much more on cotton, silk and other lighter fabrics. Further more, in the colder countries, people utilize more layers of clothing and sew their garments to fit tighter compared to those in warmer countries.
In warmer countries, the clothing style tends to be loose and flowing, and color preferences also tend towards brighter colors and flower patterns: in comparison, people in colder climates tend to use darker or basic pastel colors.
Customer Behavior

9. Shelter
Differences can also be found in customer needs for shelter. Colder countries utilize wood and stone as materials compared to clay and brick in warmer countries.
Differences can also be found in customer needs for shelter. Colder countries utilize wood and stone as materials compared to clay and brick in warmer countries.
Customer Behavior

10. Topography
Another major component of the geophysical environment is topography, that is the terrain, altitude, and soil conditions of the market where customers buy and use the product or service.
Another major component of the geophysical environment is topography, that is the terrain, altitude, and soil conditions of the market where customers buy and use the product or service,
Food, shelter, and clothing preferences differ across topographical regions. Cities surrounded by mountains are likely to have more air pollution, which is likely to influence the need for special automobile emission control systems. Gasoline in high altitude areas needs to have different composition and octane rating. Customers around rivers and lakes on the coast have very different lifestyles, with fish as their principal food.
A number of products and services are needed principally due to topographical conditions. Examples include flood insurance, erosion – resistant foundations for homes, special water treatment plants and supplies for both households and municipalities.
Customer Behavior

11. Regional Preferences
Consumption varies across different regions of the world, and indeed within a single country.
The regional consumption differences are due to two factors:
Geophysical conditions comprising climate, topography, and ecology and
Cultural and / or ethnic heritage.
Consumption varies across different regions of the world, and indeed within a single country. For example, snack food consumption varies across different parts of the United States.
The regional consumption differences are due to two factors:
Geophysical conditions comprising climate, topography, and ecology and
Cultural and / or ethnic heritage.
For example, one reason that food tends to be spicier in tropical countries is that it helps the human body adapt to the hot temperatures of the tropics. Other geophysical conditions may also play a role.
Although cultural and ethnic factors often influence regional preferences, we describe them as a market characterizes. From a theoretical perspective, many ethnic / cultural practices have themselves developed as an attempt to adapt to the physical environment. Further more, regions are the most practical way of delineating and segmenting markets even when the geographically distinct preferences might sometimes be culturally driven.
Customer Behavior

12. Regional marketing
To address such differences, marketers may use a strategy of regional marketing, the practice of adapting marketing programs according to segmentation based on geographic differences among customers.
This is recent strategy, and a sharp departure from the mass marketing practices of the companies that promote national brands.
To address such differences, marketers may use a strategy of regional marketing, the practice of adapting marketing programs according to segmentation based on geographic differences among customers.
The marketer recognizes customer diversity from one region to another and tailors the entire marketing mix to each region.
This is a recent strategy and a sharp departure from the mass marketing practices of the companies that promote national brands, some regional marketers focus on a particular region.
This is recent strategy, and a sharp departure from the mass marketing practices of the companies that promote national brands. Some regional marketers focus on a particular region, and by offering a special product suited to that region, they take on national market leaders.
Customer Behavior

13. Ecology
refers to the natural resources and the delicate balance and interdependence among vegetation, animals, and humans. It also includes concepts related to the food chain.
affects customer behavior by making certain market options less convenient or less attractive, and by customers exercising their environmental values, which then bear upon their market choices.
The third market characteristic, ecology refers to the natural resources and the delicate balance and interdependence among vegetation, animals, and humans. It also includes concepts related to the food chain.
Ecology affects customer behavior by making certain market options less convenient or less attractive, and by customers exercising their environmental values, which then bear upon their market choices. Market choices become less attractive, in turn, by two mechanisms:
The deteriorating ecology makes certain modes of consumption less convenient or less satisfying
Government disincentives make ecologically undesirable behaviors personally more costly.
As examples of the ecology itself hindering certain behaviors, consider pollution. To avoid polluting the air, many consumers will reduce the amount of driving they do. Thus rather than dining out or going to a movie, many consumers would simply eat at home and watch TV. Such shifts in customer behavior can be observed increasingly in smog- filled cities as diverse as Los Angeles and New Delhi.
The second mechanism for reducing the attractiveness of certain options is government disincentives. For example, government could impose a higher a tax on fuel, or require certain pollution – reducing equipment or processing for industrial emissions, or ban certain production altogether.
Customer Behavior

14. Market choices become less attractive, in turn, by two mechanisms:
The deteriorating ecology makes certain modes of consumption less convenient or less satisfying
Government disincentives make ecologically undesirable behaviors personally more costly.
Customer Behavior

15. Business response to environmentalism
Businesses from a variety of industries are responding to a customer demand for environmental friendly products.
environmental marketing, which refers to the marketing of products and services and in a manner that attempts to minimize the damage to the environment.
Businesses from a variety of industries are responding to a customer demand for environmental friendly products. In their effort to respond to the customer demand for a healthier environment, marketers engage in environmental marketing, which refers to the marketing of products and services and in a manner that attempts to minimize the damage to the environment. This might entail conversation of scarce resources such as trees and energy; use of recycled recyclables, biodegradable materials in the production of the product as well as in its packaging; product design changes to reduce air or water pollution due to product use; and adapting manufacturing processes to minimize air and water pollution. Environmental marketing is a response to increased public and consumer concern about safe guarding our environment.
Customer Behavior

16. Marketing Strategy Implications
Climate
Topography
Ecology
Market Characteristics
Geo Physical Environment
Alters Suitability of
Products/Services
Preservation as a 'Value'
For Customer Groups
Spatial Variations
Temporal Variations
Regional Consumption
Variations
Users
Buyers
Payers
Regional Marketing
ٍٍٍService Differences
.Physiological Need Products/
.Seasonal Merchandising
Env.Conscious Consumer
The three marketing characteristics have implications for marketing strategy.(see figure 3.2) the environment introduces both spatial temporal variation within the market place. This in turn creates variations in the products and services customers would need to satisfy their physiological needs. Marketers respond to spatial variations by adopting a regional marketing strategy. Furthermore they respond to temporal variations with a strategy of seasonal marketing. Topography directly causes variation in consumption across regions, and the strategy of regional marketing is designed to take advantage of topographical differences across regions. Finally, ecology, the third geo-physical market characteristic, alters the suitability of products, making some products more suitable for the local ecology than others. Where ecology is at risk, this market factor causes customers to adopt the preservation of the environment as a value. Marketers respond to this factor by offering ecologically-friendly products to environmentally conscious customers.
Figure 2 Marketing Strategy Implications of the Geophysical Environment
Customer Behavior

17. Relationship between Market Characteristics and Customer Behavior
Marketing response
Buyer
Payer
User
Overall Impact
Characteristic
Regional marketingSeasonal marketing
Climate –appropriate storage facilitates affect accelerated buying.Bad weather may require postponement of purchase.Pick up/ delivery services may be needed in bad weather
Out- of- place products cost more.Out - of – season products cost more.
Certain types of food, clothing and shelter are needed.Weather- related products are needed.Suitable packaging is required
Needs vary among climates and according to seasonal changes within a climate
Climate
Market characteristics and the three customer roles
The three marketing characteristics affect all the three customer roles. Not all characteristics affect all roles equally. We have already given many examples that focus on the user role, where applicable. Figure 3.3 summarizes these effects.
The physical market characteristics affect the needs of the customer, whereas market context affects the wants. Let us consider each of three market characteristics in turn. Climate affects the users' need for food, clothing and shelter, as all these have to be adequate and compatible with the climate (e.g. warm clothing for colder climates). Topography affects needs for particular means of transportation, insurance against topography-based mishaps such as floods, hurricanes, and so on; water and soil conditions necessities water purification treatments, and so on. Ecology makes ecology-unfriendly products nonviable and channels customer needs towards biodegradable and other environment-friendly products and services.
Customer Behavior

18. Customer Behavior Topography Ecology Regional marketing
Transportation difficulties may require minimizing trips, buying in bulk, or delegating purchase to others.
Special –needs products must be budgeted for.
Products adapted to local conditions (e.g. flood insurance, bottled water are needed).Available means of transportation may be limited
Regional consumption variations
Topography
Green marketingTargeting environmentallyConscious
Ecologically friendly products may require a special search effort.
Ecologically friendly products may cost more
Pollution control products are neededEnvironmentally friendly products/ services are
Altered suitability of products/ services
Ecology
For the payer rule, some physical environment factors imply greater expense. Suppose you lived in a tropical country such as Pakistan of Afghanistan and you want to visit the Swiss Alps. You would need very warm clothing such as down-filled jackets, which are unlikely to be available in your country. If they are available at all, they would be priced exorbitantly because of the specialty nature these products acquire in such out-of-place merchandise store. Similarly, if you're dietary restrictions require you to consume certain foods throughout the year; you may have to pay more for such out – of-season merchandise. You will also have to allocate in your budget for products nictitated by the topography of the area. Finally, of course, ecology-friendly products are more expensive (e.g., organically grown fruit are about twice as costly). The user in you may very much want to use pro-environmental products and services but the payer in you may have to just hold the pure string tighter.
Figure 3 Relationship between Market Characteristics and Customer Behavior
Customer Behavior

19. Customer Behavior Topography Ecology Regional marketing
The buyer rule is also affected by the physical market characteristics if you live in a very hot climate, either you have a good cold storage facility, or else you buy products in quantities sufficient for immediate consumption. Accelerated buying to take advantage of price and promotional deeds is made invisible if the storage facilities are inadequate for the climate of the place. Bad weather also leads purchasers to postpone the shopping trip and/or order home delivery rather than in-store acquisition. For customers who live in towns where the road to the market is uneasy to navigate, buyers would minimize shopping trips and would tend to buy bulk. They may also delegate the purchase task to others (e.g. "you are going that way; could you please buy- for me").
As these examples illustrate, each of the three market characteristics has varied and significant influences on each of the customer roles. Successful marketers identify and communicate the ways their products meet their resulting needs.
Regional marketing
Transportation difficulties may require minimizing trips, buying in bulk, or delegating purchase to others.
Special –needs products must be budgeted for.
Products adapted to local conditions (e.g. flood insurance, bottled water are needed).Available means of transportation may be limited
Regional consumption variations
Topography
Green marketingTargeting environmentallyConscious
Ecologically friendly products may require a special search effort.
Ecologically friendly products may cost more
Pollution control products are neededEnvironmentally friendly products/ services are
Altered suitability of products/ services
Ecology
Figure 3 Relationship between Market Characteristics and Customer Behavior
Customer Behavior