Principles of marketing: Lecture 17

MGT301
Principles of Marketing
Lecture­17


Summary
of  
Lecture­16


Business Markets and Buying 
Behavior 


Model of Business Buyer Behavior


Business Buying Situations


Involved Decision Making

New
New Task
Task Buying
Buying

Modified
Modified Rebuy
Rebuy

Straight
Straight Rebuy
Rebuy


Major Influences on 
Business Buying
Environmental
•Level of
demand
•Economic
outlook
•Interest rate
•Rate of technological change
•Political and
regulatory
developments
•Competitive
developments
•Social responsibility concerns

Organizational
Interpersonal
•Objectives
•Policies
•Procedures

•Interests
•Authority
•Status

•Organizational
•Empathy
structures
•Persuasive•Systems
ness

Individual

•Age
•Income
Business
•Education
Buyer
•Job position
•Personality
•Risk attitudes
•Culture


Problem
Problem Recognition
Recognition
General
General Need
Need Description
Description

Product
Product Specification

Specification
Supplier
Supplier Search
Search
Proposal
Proposal Solicitation
Solicitation
Supplier
Supplier Selection
Selection
Order
Order Routine
Routine Specification
Specification

Performance
Performance Review
Review


Today’s Topics


Market Segmentation


Shift from…
Mass Marketing ………. Segmented 
Marketing

Two Basic Approaches


Market Segmentation Approach
– The needs and preferences of the global market are viewed 
as heterogeneous varying from one group to another.



Total Market Approach 
 The needs and preferences of the entire, global market 
are regarded as relatively homogeneous.


Major Steps in Target Marketing


Segmentation



Target Marketing



Market Positioning


Market Segmentation

Dividing a market into distinct groups with distinct needs, 
characteristics, or behavior who might require separate 
products or marketing mixes.

Target Marketing
The process of evaluating each market segment’s attractiveness 
and selecting one or more segments to enter.

Market Positioning
Arranging for a product to occupy a clear, distinctive, and 
desirable place relative to competing products in the mind of 
target consumers


Steps in Market Segmentation,
Targeting, and Positioning


Market Segmentation
1. Identify bases for
segmenting the market
2. Develop segment profiles
Market Targeting
3. Develop measure of
segment attractiveness
4. Select target segments

Market positioning
5. Develop positioning for
target segments

6. Develop a marketing
mix for each segment


Segmenting Consumer Markets


What is Market Segmentation?




Segmentation is breaking down heterogeneous mass market 
into more homogeneous submarkets



Consumers within segments should respond similarly to 
particular marketing actions



Consumer response should be different between segments 


Why segment the market?


Diverse needs, wants and buying behaviors differ



One firm cannot satisfy everyone’s needs



Different strengths and competitive advantages



Focus on what they do best



Better marketing opportunities



More profitable


Segmentation


Segmentation Variables


Geographical segmentation



Demographic segmentation



Psychographic segmentation



Behavioral segmentation


Geographical Segmentation


Dividing a market into different geographical units such as 
nation, province, regions, countries, cities or neighborhoods 


Geographic Segmentation 
Variables