MKTG 311 1st Edition Lecture 11 Outline of Last Lecture I. Influences on Consumer Purchases- Psychological InfluencesII. Classifying Business MarketsIII. Business Market CharacteristicsIV. The Buying SituationOutline of Current Lecture I. Who makes the Purchases?II. Roles in the Buying CenterIII. Business Buying Decision ProcessIV. North American Industry Classification System (NAICS)V. Ch. 9- The Target Marketing ProcessVI. Step 1: Segmenting Consumer MarketsA. Segmenting by GeographyCurrent LectureI. Who makes the Purchases?- Trained Professional Buyers- Buyers that make purchases for the business market(Purchasing office)o ODU Purchasing office: Executive Director of materiel’s Management, Assistant Director of materiel’s Management, 5 Procurement officers, Office Manager, 2 Administrative assistants.- Buying Center- Cross Functional team of decision makers that assist with more complex purchasesII. Roles in the Buying Center- User needs the product- Influencer dispenses advice or shares expertise- Gatekeeper controls the flow of information to other members- Decider makes the final decision- Buyer executes the purchaseIII. Business Buying Decision Process1. Problem Recognition: Someone in the business recognizes there is an unmet need/ problem and that a purchase can solve that problem.These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.2. Information search- begin product search: purchase databank, ask engineer, go online, tradeshow, place ad in trade journal.3. Alternative Evaluation- The business describes what they’re looking, specify a desired quantity, delivery times, etc.4. Purchase Decision: Buying center that assesses the proposals, much more formalizedand sophisticated. Criteria they may consider low bid (price), quality, technical capabilities, and delivery.Other Considerations:o Just in Time- Inventory management system that reduces stock to very low levels or near zero and then delivers the product as needed.o Single sourcing- When buyer and seller work closely together (a specialized product)o Multiple sourcing- More than one supplier provides the product, helps to ensure the prices remain competitive and product availability.5. Post Purchase Behavior: Buyer and possibly buying center will assess the purchase- Satisfied/Dissatisfied? Formalized and SophisticatedIV. North American Industry Classification System (NAICS)- Organizes North American Industry and helps to measure economic activity across: US, Canada, and Mexico. 6 digit industry classification system: 1+2 = Sector, 1+2+3 = Subsector, 1+2+3+4 = Industry Group, 1+2+3+4+5+6 = US industry. Europe: NACE- Economic Census Data: # of companies/ establishments for industries, # of employees, sales, breakdown by state.- Review: Straight Rebuy, Modified Rebuy, New TaskYou are the new director of materials management for a textile firm that manufactures sheets and towels. Several items are on your list to purchase - decide whether it is a straight rebuy, modified rebuy or new task:Textile dyes for the year’s fashion colors (Modified)Computer paper (Straight)New sewing robotics (New)V. Ch. 9- The Target Marketing Process1. Segmenting: Identifying and describing the various market segments.2. Targeting: Evaluating and selecting the market segment/s we want to target.3. Differentiation: Creating a unique product to fit the needs of the target market/s4. Positioning: Helping the customer to understand how your product/ brand fits in the industry.VI. Step 1: Segmenting Consumer Markets- Ways that the most profitable companies segment their market:1. Geography- 88%2. Behavioral- 65%3. Demographics- 53%4. Psychographic- 43%A. Segmenting by Geography- Consumer tastes and preferences may vary depending onwhere consumers live.- Country- Mc Donald’s: Examples- UK has porridge, France has French cheese, Portugal has soup, and India has meatless burgers.- Region- Bass Pro Shops- Fishing/ Boating activities. Hunting apparel and accessories.City size, Statistical Area, Media-television, Density: Big box stores like Costco.Climate: LL Bean (Products