Chapter 3 Consumer Behavior.docx

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Chapter 3 Notes: Consumer Behavior
Why is Market Segmentation Necessary?: to understand
why market segmentation is essential
- if consumers were all the same and had the same needs and wants then
undifferentiated mass marketing would be appropriate
- segmentation, targeting, and positioning enables producers to avoid head-on
competition by differentiating what they offer
- services also segment their markets, to get to being different in their market
- marketers use segmentation research to identify the most appropriate media in
which to place advertisements
Criteria for Effective Targeting: to understand the criteria for
targeting selected segments effectively
- not every segment that can be identified is viable or profitable
- the challenge marketers face is to select one or more segments to target with an
appropriate marketing mix
- to be an effective target, a market segment should be;
1) Identifiable
- to divide the market into separate segments on the basis of common of shared
needs or characteristics that are relevant to the product or service, a marketer
must be able to identify these characteristics
- variable to segment could be demographics, some can be determined through
questioning
2) Sizeable
- a segment must consist of enough consumers to make targeting profitable
3) Stable
- segments need to be relatively stable in terms of lifestyle and consumption
patterns.
4) Accessible
- marketers must be able to reach a market segment in an economical way
5) Congruent With the Company’s Objective and Resources
- not every company is interested or has the means to reach every market
segment
Bases for Segmentation: To understand the bases for segmenting
consumers
- a segmentation strategy begins by selecting the bases representing the core
attributes of a group of customers
- figure 3.3 page 58
- a single characteristic is never used alone in an segmentation plan
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- all segmentations plans are in the form of hybrid segmentation that includes
attributes from two or more of the quadrants
- the chart is split up into 4 quadrants,
1) facts; which can be determined from direct questioning and categorized by a
single objective measure, versus cognitions, which are abstract, can be
determined only through more complex questioning
2) consumer rooted features stemming from the consumers physical and
psychological characteristics versus consumption specific usage behaviors
(i.e., facts) or attitudes and preferences toward specific products or buying
situations (i.e., cognitions)
Consumer-Rooted Segmentation Bases
- demographics are objective and empirical and can be easily determined through
questioning
- social class also are looked at as evidence based
- things like psychographics meaning lifestyles cannot be classified according to
the standardized definitions, there are no fact based, empirical denotations or a
“green consumer”, “impulse buyer”
- demographics is the core of all marketing segmentations
- age is a crucial variable in segmenting so is the segments gender, that being
because many products and services are inherently designed for either males or
females
- the martial status of a family is crucial to segment a market, marketers were able
to discover the benefits of targeting specific martial status groupings such as
single, divorces, individuals, single parents. These segments have become
extremely beneficial to the marketers.
- Family life cycle is something that families go through over the time. Each
- Each stage represents an important target segment to marketers;
1) Bachelorhood
2) Honeymooners
3) Parenthood
4) post parenthood
5) dissolution
- income has been long an important crucial role in distinguishing between market
segments because it’s the indicator of the ability to pay for a product
- geodemographic segmentation is a segmentation method that is determined by
where a person lives, usually ones that live closer together display similar buying
behaviors
- PRIZM NE classification separates each cluster in demographic and behavioral
terms.
- personality traits are ones that people do not just express, this is where the job
of the marketers come into place
- for example consumers who are open minded and generally perceive less risk
than others in trying new things are likely to be consumer innovators (they buy
new products when they come out)
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