Understanding Consumers, Defining Segments And Targeting

Question 1

What are e five stages of consumer buying process?

Answer 1

1. Need recognition
2. Information search
3. evaluation of alternatives
4. Purchase decision
5. post purchase behavior

Question 2

What are the Limitations with the five stages of consumer purchase process?

Answer 2

• often irrational and unpredictable
• does not always follow theses stages I’m sequence
• can jump from need to purchase if there is strong brand loyalty

Question 3

The amount of time, effort and expense dedicated to the search for information depends on what three factors?

Answer 3

1. The degree of risk involved in the purchase
2. The amount of experience the consumer has with the product category
3. The actual cost of he search in terms of time and Money

Question 4

What is the evoked set in the context of information search?

Answer 4

The evoked set is the narrowed down set of alternatives that the customer is considering

Question 5

What happens during the evaluation of alternatives?

Answer 5

• consumers translate the needs into wants for specific products or brands
• evaluate products as bundles of attributes that vary in ability to satisfy needs
• marketers have to ensure that their product is in the evoked set of potential alternatives by reminding consumers of company + offerings.

Question 6

What happens during the purchase stage of the buying process?

Answer 6

• intention to purchase and act of buying are distinct concepts
• marketers issue here is product availability and possession utility

Question 7

What happens during post purchase evaluation stage?

Answer 7

• outcome of buying process is linked to long-term customer relationships
• consumers will experience one of four outcomes:
  1. Delight
  2. Satisfaction
  3. Dissatisfaction
  4. Cognitive dissonance

Question 8

What factors can affect the consumer buying process?

Answer 8

1. The complexity of the purchase and decision making process
2. Individual factors (age, life cycle, occupation, interests. Attitudes, opinions)
3. Situational factors (physical and spatial influences, social and interpersonal , time)
4. Social influences: culture, subculture, social class, family, reference groups etc.

Question 9

What does routine response behavior signify?

Answer 9

• low involvement
• frequently Purchased
• inexpensive
• little risk
• little information needed

Question 10

What does extensive problem solving signify?

Answer 10

• high involvement
• infrequently purchased
• expensive
• high risk
• much information desired

Question 11

When is cognitive dissonance more likely to occur?

Answer 11

• value of the purchase increases
• opportunity costs are rejected
• alternatives are high
• purchase decision is emotionally involving

Question 12

What are them division level of influences?

Answer 12

1. Motivation: what drives us
2. Perception: how we select, organize, and interpret stimuli related to our five senses
3. Learning: how we process information based on perception and experience
4. Attitudes and beliefs: what we think

Question 13

What does mass marketing involve?

Answer 13

• no segmentation what so ever as it aims at the whole market for a particular product
• assumes all customers in the market have similar needs and wants that can be satisfied with a single marketing program
• works best when needs are homogenous
• itionadvantageous for production efficiency and lower costs
• risky due to competition offering more specialized products

Question 14

What does differentiated marketing involve? What 2 approaches?

Answer 14

• dividing the total market into customer groups with relatively common or homogenous needs and developing s strategy based on this
  1. multi-segment approach: attracting buyers in more than one segment by offering a variety of products
  2. Market concentration approach: focusing on a single market segment and attempting to gain maximum share in that segment

Question 15

What does niche marketing involve?

Answer 15

• focus marketing efforts on one small, well-defined market segment or niche that has a unique specific set of needs
• less likely to attract competitors, however greater risk exposure

Question 16

What is the individualized segmentation approach, micro marketing/one-to-one marketing?

Answer 16

• it’s about satisfying the need of each individual (everything is tailor made)
• personalization
• unique programs or systems are designed for each customer
• possible due to development of communication technology and access and tracking of customers
• can measure customer behavior

Question 17

What is the individualized segmentation approach, mass customization?

Answer 17

• provide unique products and solutions to individual customers in mass scale
• cost effective and practical due to advances in supply chain management

Question 18

What are targeting strategies for:

• differentiated marketing
• undifferentiated marketing
• niche marketing ?

Answer 18

1. differentiated marketing:
   - target several segments with delegate marketing mixes (unilever)
   - effective if needs differ substantially
   - low economies of scale, more targeted advertising and promotions
   - more costly research and planning
2. Undifferentiated marketing:
   - one marketing mix for the largest segment
   - differences are not meaningful
   - high quantity, economies of scale, mass advertising and promotion
   - not effective if needs are more differentiated
3. Niche marketing:
   - choosing a smaller segment and tailoring a marketing mix and strategy
   - more profitable, Unidentified segment
   - costly in downturn, all eggs in one basket
   - no economies of scale
   - fashion tastes change

Question 19

What four general categories are used to segment the market?

Answer 19

1. Behavioral segmentation
2. Demographic segmentation
3. Psychographic segmentation
4. Geographic segmentation