Chapter 4
As you read the chapter, make notes about each of the following:
 | Market Segmentation |
| Consumer markets |
| Social Factors |
| Psychological Factors |
| Consumer Buying Decision Process |
| Organizational Markets |
| Organizational Buying Behavior |
| Organizational Buying Decision Process |
| Organizational Relationships |
Define each key term you find.
Summarize each term in your own words. List the important points for each
term. Give a "real life" example of each term.
(hover your mouse over the word for a popup definition)
Answer the objectives.
These tell you what you are expected to know upon completion of the
chapter.
I have made some notes for you. Expand on any that are new to you.
The word consumer refers to people who purchase to fulfill their individual or family consumption needs.
The various factors that effect consumer behavior are environmental influences (e.g. culture, social class) and individual differences and psychological processes (motivation, attitudes, personality characteristics, and so forth).
1. Describe how the environmental factors influence consumer behavior.
| The environmental factors that influence consumer behavior are culture (consumer's set of values), social class (group sharing economic status and similar consumer behavior), personal influences (a consumer's reference group), family (group related by blood or marriage sharing a household), and situational influences (factors specific to a particular buying choice). |
2. Describe how the internal factors influence consumer behavior.
| Internal factors include: Motivation and involvement (driving force or stimulus) Maslow's
hierarchy of needs: |
| Learning (cognitive and associative) |
| Information processing |
| Knowledge and attitudes (comparative ads) |
| Personality and psychographics (activities, interests, opinions) |
3. Describe the decision process.
| Three types of decisions are routinized (buying milk), limited (shopping
for clothes), and extended (buying a house). The steps in the decision process include:
|
4. Describe the four major types of customers who utilize organizational marketing.
| There are four major categories of customers who utilize organizational marketing: producers, resellers, governments, and other institutions. |
5. Discuss three distinguishing characteristics of organizational marketing.
| a) The number of customers within the organizational market is far fewer
than is the situation in the consumer market. b) The nature of demand in the organizational market differs from consumer demand in several respects - derived demand; inelastic demand. c) buying characteristics: multiple buying influences typical; close supplier-customer relations desirable; negotiation common. |
6. Describe the types of organizational buying decisions.
| a) straight rebuy b) modified rebuy c) new buy |
7. Define and explain the value of SIC codes.
| The North American Industry Classification is a useful scheme for classifying businesses. NAIC consists of a detailed set of codes for identifying organizations and subdividing the industrial marketplace into groups of firms in similar lines of business. |
8. Explain what is meant by a market.
| A market is a group of customers who have the need or desire, the ability, and the authority to purchase a specific product. |
9. Define the two basic strategies used to identify potential customers.
| a. mass-marketing strategy, or undifferentiated marketing (Model T) b. market segmentation strategy with either concentrated (Starbucks) or differentiated segmentation (Proctor & Gamble) |
10. State the criteria for effective segmentation.
| a. identify and measure b. be large enough c. economic accessibility d. homogeneous response |
11. Explain each of the five bases for segmenting consumer markets.
| a. Geographic b. Demographic c. Psychographic d. Benefit e. Usage |
12. Describe the three bases for segmenting industrial markets.
| geographic considerations |
| customer characteristics |
| end-use applications |
Answer the discussion questions.
- How would a consumer’s decision buying process differ when
purchasing a new personal computer or when purchasing a gallon of milk? (extended vs.
Routinized)
- How do the product characteristics vary to cause the different decision
processes in Question 1? (expense)
- How can a marketer modify consumer attitudes that are held by the
consumer toward the marketer’s products? (comparative advertising)
- What roles are various members of a family likely to play when choosing a
family vacation? (influencer, gatekeeper, decider, buyer)
- Why are organizational markets considered to be more rational than consumer markets?
| Consumers buy on emotion; industrial buyers buy on logic. |
- What are the primary concerns of industrial buyers in each of the three types of buying situations?
| straight rebuy, modified rebuy, new buy |
- Apple sells computers to both consumers and industrial buyers such as government agencies and educational institutions. What are some of the differences in marketing strategies that Apple may use in the two markets?
| consumer - Your children need it to be well educated. industrial - This will help your business be more efficient. |
- Monroe Solutions, Inc. sells complete inventory control systems. How could Monroe's marketing manager use NAIC codes to develop her marketing plan?
| Competitive analysis - Use the NAIC to pinpoint Monroe’s market by type of industry and geographic location. The classification is based on the product produced or operation performed. The number of establishments, sales volumes, and number of employees broken down by geographic area are given. |
Discuss how the following products would be classified first as a consumer product, then how would each become a business-to-business product. Identify potential ways the products would be marketed differently as a consumer product or a business-to-business product: a) personal computer, b) a quart of oil, and c) a pencil.
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