income levels, live in different regions of the country, and
have various personalities and psychological profiles. This
makes developing a single way to sell to consumers
difficult as they are influenced by different factors when
buying goods and services. Consumers' purchases are
initiated by marketing stimuli. Marketing stimuli refer to
the elements of the marketing mix, oftentimes referred to
as the 4P's: Product, Price, Place, and Promotion.
Consumers are influenced by the products/services that
they see, hear from mass media, the Internet, and
through word of mouth. Marketing organizations organize
these four elements so marketing stimuli can result in
expected sales and brand loyalty
Nine stages of a family's life cycle"
• Stage 1: Bachelor/bachelorette stage
• 2: Young- newly married couple with no children Stage
• 3: Married couple, with eldest child below elementary age
Stage
• 4: Married couple, with youngest child six years old or over -
Stage
• 5: Older married couple, family head still working, all
children living on their own Stage
• 6: Widow/widower, in labor force Stage
• 7: Widow/widower, retired
Three perceptual processes guide
an individual's perception:
•Selective attention
• Selective distortion
•Selective retention
Organizational Markets Organizational Markets Organizational markets are all the
individual companies that purchase goods and services for some use other than
personal consumption. The organizational market is far less in number than the
consumer market buy less frequently, but in greater volume. They are also widely
dispersed geographically
•There are three types of organizational
markets:
•1. Industries
•2. Resellers
•3. Government
There are three types of
organizational buying decisions:
•• New
•• Straight rebuy
• • Modified rebuy
Organizational Buying Process
•Identifying and Segmenting
Market for a Product or
Service
•Module 9
• Let’s think about a couple of realities in the business world. First,
every organization has limited resources. Organizations cannot do
everything and be all things to all people. They have to prioritize and
choose. Second, marketing is always most effective when it’s relevant
to the potential customer. How can an organization create the right
products, services, messages, and experiences for a potential
customer? Answer: through segmentation and targeting.
• The starting point for understanding your potential
customer is figuring out exactly whom you want to reach.
That process is called segmentation. The next step is
focusing on those customer segments that are the most
promising customers. That’s where targeting comes in.
Targeting helps organizations use their resources wisely
and customize what they do much more specifically for
those who will see the most value from their offering. This
module will provide you with the skills on how to identify,
segment market for a product or service, and select the
appropriate target market segment and its positioning.
The Importance of Market Segmentation
• In a simplistic sense, it is easy for business organizations to make sales and
subsequently generate profits. The Philippines, for example, has a population of
approximately 100 million people in 2015. If a company introduces a new product
priced at P10.00 and each citizen purchase one unit of the product, the company will
generate sales of P1 billion (100 million people x P10.00 per unit of product). In reality,
it is not that simple because the population has many different segments distributed
over 7,100 islands with various age brackets and income groups. Levels of education
also differ as well as different dialects in different regions. Other than these, there are
also differences in consumer attitude and behavior. Some members of the population
are conservative, while the rest are liberal. Many are becoming career-oriented, while
others maintain family-centered lives. Business organizations have limited funds to
pursue all these segments. If a company intends to make a profit from its operations, it
shall serve only segments of the population that are most likely to purchase its
product. This way, companies avoid spending rather large amounts of money on selling
their products that are least likely to buy. Thus, it is essential to divide the total
population into segments, each with particular characteristics to identify the target in
concentrating on marketing efforts.
Consumer Segmentation
Variables
•I. Geographic. It pertains to the location
of the population. Some examples of
geographic segmentation sub-variables
are region, density, and climate
II. Demographic. It refers to the
general characteristics of the
population. Some examples of
common demographic
segmentation sub-variables are
Gender, Age, Income,
Occupation, Education, Civil
status, Religion, Nationality,
Race, and Family size
• III. Psychographic. These are variables that represent
the psychological profile of consumers. It is one of the
most effective segmentation variables in predicting
purchase behavior. However, the psychographic
profiles of different segments of the population are
difficult to measure as no government agency
undertakes regular studies and releases data to
identify and quantify these segments. Examples of
psychographic segmentation sub variables are
Lifestyle, Personality, Social class, User status, Usage
rate, Loyalty status, and Benefits sought
• IV. Behavior graphic. It is the segmentation variable most indicative of
purchase behavior. Unfortunately, it is not available to all organizations
as it depends on the meticulous maintenance and conservation of
internal databases. Retailer database, for example, can provide
information such as customer listings, their home, and email addresses,
and contact numbers. When the customer database is organized and
synchronized with the point-of-sale system, retailers can pinpoint
individual customer purchases, by item, transaction size, time of day,
and frequency. When the database of a particular female customer, for
example, indicates a preference for capri pants, the retailer can send an
email to this customer to advise her of the arrival of new capri pants.
Without the database, all of the retailer's customers will receive the
email. Behaviorgraphic segmentation not only enhances the likelihood
of sales but dramatically reduces direct marketing costs
• The organization has to decide which
segmentation sub-variables are relevant to the
successful and cost-efficient marketing of its
product or service. For example, a fruit juices
company may choose to concentrate the
marketing of its products to teenagers from the
middle-class income bracket. It may also decide
not to segment its potential consumers by
education, as educational attainment may be
irrelevant in fruit juices purchase and
consumption.
The following are the roles involved in organizational
buying
Users
Approvers
• decisions: Gatekeepers
Influencers
• 1. _____ are parties who are empowered to make Buyers
the purchase decisions with regards to product Deciders
specifications or selection of suppliers.
• 2. _____ usually initiate the organizational buying
process after having identified specific need in their
department.
• 3. _____ are individuals is higher level management
who oversee the purchase decisions of the deciders.
• 4. _____ are individuals within the organization that
influence the purchase decisions.
• 5. _____ are responsible for the actual purchase.
