MARK 3321 1st Edition Lecture 6Outline of Last Lecture I. Consumer BehaviorII. Consumer Decision-Making ProcessIII. Factors determining Level of Consumer InvolvementIV. Marketing Implications of Consumer InvolvementOutline of Current Lecture I. Factors Influencing Buying DecisionsII. Market segmentationIII. Bases for Segmenting Consumer MarketsCurrent Lecture- Factors influencing Buying Decisionso Cultural Subculture- A homogenous group of people who share elements of the overall culture as well as unique elements of their own group- Commonly divided on the basis of geographic regions, national and ethnic background, and religious beliefs Social class- A group of people in society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms- Measured as a combination of occupation, income, education, wealth, and other variableso Social factors Reference groups- Directo Primaryo SecondaryThese 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.- Indirecto Aspirationalo Non-aspirational Opinion leaders Family memberso Individual factors Gender Age (life cycle stage) Personality, self-concept, lifestyleo Psychological factors Perception- Selective exposureo Consumer notices certain stimuli and ignores others- Selective distortiono Consumer changes or distorts info that conflicts with feelings or beliefs- Selective retentiono Consumer remembers only that info that supports personal beliefs Motivation- Maslow’s Hierarchy of Needs Learning- Learning theoryo Experiential vs. conceptual learning Experiential works well with food, such as sampling, or free trial Conceptual are mainly explainingo Stimulus generalization vs. discrimination Stimulus generalization- Associating characteristics of the same brand fornew products  Stimulus discrimination- Being able to see the difference from other brands Beliefs and attitudes- Changing target consumers’ attitudeso Changing beliefs about attributeso Changing the importance of beliefso Adding new beliefsCH 8 – Segmenting and Targeting Markets- Market segmentationo Market People or organizations with needs or wants and the ability and willingness to buyo Market segment A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needso Market segmentation The process of dividing a market into meaningful, relatively similar, identifiable segments or groups- Criteria for successful segmentationo Substantiality  Segment must be large enough to warrant a special marketing mixo Identifiability and measurability Segments must be identifiable and their size measurableo Accessibility  Members of targeted segments must be reachable with marketing mixo Responsiveness Unless segment responds to a marketing mix differently, no separate treatment is needed- Segmentation bases (variables)o Characteristics of individuals, groups, or organizations used to divide a total market into segments- Bases for Segmenting Consumer Marketso Geographic segmentation (base) Region of the country or world Market size Market density Climate ^^All of these are variables^^o Demographic segmentation (base) Age Gender Income Ethnic Family life cycleo Psychographic segmentation Personality Motives (broad and general)- Self-expression- Conveying status- Stay consistent with their religious or moral beliefs Lifestyles Geo-demographics - Combination of geographic, demographic, and lifestyle variableso Benefit segmentation The process of grouping customers into market segments according to the benefits they seek from the product Product-specific- Ex: common benefits sought by people who ride bicycleso Exercise, off-road adventure, transportation, socialization, environmentalo Usage-rate segmentation Dividing a market by the amount of product bought or consumed 80/20 principle- A principle holding that 20% of all customers generate 80% of the demand- More useful for services than products- Ex: restaurants can look at number of visits, sales,