Test 2 Notes Market Segmentation o Characteristics of individuals groups or organizations used to divide a total market into segments Variables o Based on motivations o The 80 20 principle o A principle holding that 20 percent of all customers generate 80 percent of the demand o Segmentation helps marketers satisfy customer s wants and needs while meeting the organization s objectives o Characteristics of Segmentation Segmentation enables the identification of groups of customers with similar needs and the analysis of the buying behavior of these groups o Sustainability mix o Identifiably o Accessibility Segment must be large enough to warrant a special marketing Segments must be identifiable and measurable Members of targeted segments must be reachable with the marketing mix o Responsiveness No separate treatment is needed o External o Easily measured observed o Relatively inexpensive quick o Less correlation for market behavior o Examples Geography a product can vary from New York to Florida Example you won t wear a tank top in New York but you might wear it in Florida during the summer Economic things you can afford because of your level of income Someone with a higher income might drive a Mercedes where someone with a lower income might drive a Kia Cultural who you are surrounded with helps to determine what kinds of things you buy It is not commonly used Demographic gender There are men s deodorants and women s deodorant Uses the 4 P s Social class It used to be important many years ago and has to do with things like education It is more commonly referred to as lifestyle segmentation Religious has to do with the different religions people believe in and different values people have o Clothes relative to weather Depending upon the weather dictates what type of clothes you are going to wear that day o Internal o Expensive o Time consuming special study we would have to do our own study to find out this information o Greater correlation between the segmentation characteristics and the market place behavior o o Examples Lifestyle attitude interest opinion Prizm studies How a person dresses Perceptions How a person perceives a product that helps to determine if they would like to purchase it How someone is motivated to buy a specific item Motivations Needs Personality Attitude Stages in the buying process o Image by looking at an ad you can tell what lifestyle is like You think to yourself why would I buy something o Product Related o Characteristics of product What makes the product different from other products How often you would use something There are different levels of users light and heavy People will buy from this brand simply because of the name There is a sense that this brand will stay true to its name You buy the same item because it has worked for you in the o Usage rate o Brand loyalty o Purchasing habits past o Benefits sought o Occasion You see certain benefits in this product over another one Why are you buying this Is it for a birthday wedding etc o Use marketing on heavy users o Segmentation o Consumer markets Consumers buy these products to use o Business markets Items bought for sale o External o Easily measured easily observed relatively inexpensive quick o Consumer behavior o The buying behavior of a consumer buying and using products o Consumer behavior The decision processes and actions of people involved in The decisions and purchasing activities of people who purchase who purchase products for personal or household use and not for business purposes o High involvement products tend to be those that are visible to others and expensive o Temporary and dynamic involvement resulting from a particular set of circumstances is situation al involvement o Involvement level affects person selection of one of three type s of consumer problem solving Routinized response behavior Limited problem solving Extended problem solving o What are consumers thinking o Often times consumers do not know why they bought something o Examples Psychology Social psychology Sociology Economics Demography Anthropology o Classical conditioning Bell food Salivate The process in which conditional stimulus leads to unconditional stimulus that leads to response Downs mentions a sociology study where the dog responds to a bell and gets a treat Conditioned stimulus unconditioned stimulus response Conditioned stimulus Ex Bell A verbal or graphic description of the product Ex Symbol Unconditioned stimulus Ex Food The actual product Response Ex Salivate The interest knowledge behavior towards a product Verbal graphic description of product actual product awareness interest knowledge attitudes performance behavior o Instrumental conditioning An alternative theory which talks about voluntary behavior Marketers try to shape a consumers behavior through this Condition response conditioning stimulus o Serial Learning Product and Brand name down what you remember In class Downs named baseball teams and asked us to write The tendency to remember things that are said first and last Results in a U shaped curve Primacy and regency o Paired Association We associate things together to help us remember Hamburger and Fries This is meant for the consumers to think of one and remember the other A slogan with a brand o Publix where shopping is a pleasure o Millennial product Marketers have to understand how they are going to accept the There is a generational segmentation an emotional tie from one generation to another Focus on children and family settings Our civilization is doomed if the unheard of actions of our younger generations are allowed to continue 1883 1900 Lost generation 1901 1924 GI generation 1925 1945 Silent generation 1946 1964 Baby Boomers 1965 1983 Generation X 1984 present Millennial Baby Boomers importance Size Self absorption Challenged established norms Grew up with TV Marketing s fascination with youth Millennial importance Size Boomers groomed them Grew up with the internet and other technology Anti boomers Changes trends in marketplace with barrier testing behavior Other names for the millennial are Internet generation Generation Y Nexters The Nintendo generation The icons of the millennial are IPod Internet Cell phone Facebook iPad o Scheduled structured lives o Millennial in the workplace Sense of entitlement Expect instant gratification View that job doesn t define a person Multitasking behavior dominates o Videos Talked about the Old Spice commercials Watched about 10 different
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