1. Customers, Segmentation, Target Marketing What Individuals are My Prospects?

2. Customer Buying Process u Need Recognition u Information Search u Evaluation of Alternatives u Purchase Decision u Post-purchase Evaluation

3. Need Recognition u Unmet needs identified – Current Satisfaction does not equal desired satisfaction v Internal Stimuli u Hunger, thirst, fatigue v External Stimuli u Advertising, window shopping, salespeople interactions u Example: You brush your teeth this morning and realize you are out of toothpaste

4. Demand u Wants are not equal to demand in the marketplace u Demand requires the customer’s ability and willingness to purchase backs up their want for the product. v You want a BMW … but you also NEED to eat and pay rent!

5. Information Search u How much time, expense, and effort? RISK … financial, social, emotional, personal v Passive information search u Attentive and receptive to ads, information encountered v Active Search u Seek out additional information by browsing the Internet, visiting the showroom, talking to a salesman or associates

6. Evaluation of Alternatives u Evoked Set – various products or brands considered u Evaluation becomes a desire or want for a particular product or service/brand u If my product isn’t in the evoked set, not in the game!

7. Purchase Decision u Assist the customer’s decision by reducing risk v Warranties v Service contracts v Credit availability or lay away

8. Post Purchase Evaluation u Delight – exceed expectations u Satisfaction – meet expectations u Dissatisfaction – do not meet expectations u Cognitive Dissonance – unsure of the product’s performance relative to expectations … nagging feeling you made the wrong decision

9. Factors Affecting the Consumer Buying Process u Decision Making Complexity v Higher risk, more involved, need info u Social Influences v Culture, reference groups, family, opinion leaders u Situational Influences v Never go to the grocery store hungry! v Theme Park and Unexpected Rain!

10. Market u a set of individuals or organizations that desire a product or service and are willing to buy it

11. Business Markets u Commercial Markets v Buy raw materials v Facilitating goods and services v Communications, transportation, agriculture u Reseller Markets v Channel intermediaries u Wholesalers u Retailers u Brokers u *resale for a profit

12. Business Markets u Government Markets v Federal, state, county, city v Purchases related to services provided u Fire trucks, ambulances, supplies and office materials u Institutional Markets v Non-commercial organizations u Churches, charities, schools, hospitals u Buy finished goods that facilitate their mission

13. Business Market Characteristics u The Buying Center v Group decision u Hard and Soft Costs v Monetary, shipping, installation (hard) v Opportunity cost, downtime, human resource concerns (training) u Example: New software for billing

14. Business Market Characteristics u Reciprocity v One business sells copiers and services and it is understood they will use your advertising services u Mutual Dependence v Nissan is disrupted if Calsonic goes down v Walmart loses business, Proctor and Gamble revenues decline

15. Business Buying Process u Problem Recognition u Develop Product Specifications u Vendor ID and Qualification u Solicit Proposals and Bids u Vendor Selection u Order Processing u Vendor Performance Review

16. Market Matching Strategies u Mass-Market Strategy u Segmentation Strategies v Multisegment Strategies v Focused (Concentrated) Strategies

17. Segmentation Strategies u Concentrated Strategy v one marketing mix v one segment of the larger market v Ex: Porshe u Multisegment Strategy v two or more marketing mixes v two or more segments v EX: GM

18. Individualized Segmentation Strategies u One to One Marketing v Unique product for each customer in the target segment (B2B), Burger King, Healthcare u Mass Customization v Build a Bear u Permission Marketing v Opt in for email communications

19. No Segmentation Strategies u Mass-Market Strategy (Undifferentiated Approach) v one marketing mix v target entire market for entire product category v EX: Ford Model A/T

20. Marketing Segmentation u Identifying groups of people with shared characteristics within the broad markets for consumer or business products u aggregating these groups into larger segments according to their mutual interest in the product’s utility

21. Steps to Segment u Identify the needs structure of the consumer population u Group the customers into homogeneous segments u Id factors that are correlated with the segments (segmentation variables) u Select your target market u Develop your positioning strategy

22. Segmentation Variables u Demographics v age, income, sex, family life cycle u Geographics v regions, climate, density u Behavioral v benefits sought, usage rates (80/20 principle), purchase occasion

23. Psychographic Segmentation u Motives u Personality – fashionistas, techies u Lifestyles – healthy, antiestablishment - independent u Geodemographic v College students

24. Target Markets u these are the aggregate segments that you will direct your marketing efforts towards u You’re prospects!