BUOL 533 BUOL 533 - Marketing Management Your Name Here University of Cumberlands Date 1 BUOL 533 2 Introduction Start your paper here. An introduction paragraph is a good idea. It should state the TOPIC of your paper and provide a roadmap for the reader. Indent five spaces the first sentence in each paragraph. Chapter Four Indent first sentence in each paragraph five spaces. Provide marketing concepts covered in Chapter Four. Make sure to cite your textbook properly if you quote directly from this source. Chapter Five Indent first sentence in each paragraph five spaces. Provide marketing concepts covered in Chapter Five. Make sure to cite your textbook properly if you quote directly from this source. Conclusion Your final paragraph should provide a summary of your paper. This reminds the reader of where you took them on your road trip. It is similar to reviewing your photographs after a vacation. There should be no new information included in the conclusion. BUOL 533 References Peter, J.P. & Donnelly, J.H. (2019) A Preface to Marketing Management. (17th Edition) McGraw-Hill Education. New York, New York. 3 15 e Chapter 5 Market Segmentation © McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education. Chapter Outline • Delineate firm’s current situation • Determine consumer needs and wants • Divide markets on relevant dimensions • Develop product positioning • Decide segmentation strategy • Design marketing mix strategy © McGraw-Hill Education Market Segmentation Process of dividing a market into groups of similar consumers and selecting the most appropriate group or groups for the firm to serve • Target market: Group or segment a company selects to serve © McGraw-Hill Education Figure 5.1: A Model of the Market Segmentation Process Jump to Figure 5.1: A Model of the Market Segmentation Process, Appendix © McGraw-Hill Education Delineate the Firm’s Current Situation Firms must do a complete situational analysis when embarking on a new or modified marketing program • Aids in determining objectives, opportunities, and constraints to be considered when selecting target markets and developing marketing mixes Intended to be a reminder of tasks to be performed prior to marketing planning © McGraw-Hill Education Determine Consumer Needs and Wants • Successful marketing strategies depend on discovering and satisfying consumer needs and wants • Consumer needs and wants are translated into operational concepts at a strategic level © McGraw-Hill Education Divide Markets on Relevant Dimensions: A Priori versus Post Hoc Segmentation A priori segmentation • Marketing manager decides on the appropriate basis for segmentation in advance of doing any research on a market Post hoc segmentation • People are grouped into segments on the basis of research findings Jump to Divide Markets on Relevant Dimensions: A Priori versus Post Hoc Segmentation, Appendix © McGraw-Hill Education Divide Markets on Relevant Dimensions: Relevance of Segmentation Dimensions Managerial expertise and experience are required for selecting the appropriate dimensions or bases on which to segment particular markets Initial dimensions can be determined from: • Previous research • Purchase trends • Managerial judgment Consideration and research of sought benefits are a strongly recommended approach in the marketing literature © McGraw-Hill Education Divide Markets on Relevant Dimensions: Approaches for Segmenting Markets, 1 Benefit segmentation: Focuses on satisfying needs and wants by grouping consumers on the basis of the benefits they are seeking in a product Psychographic segmentation: Focuses on consumer lifestyles as the basis for segmentation • V A L S: Best-known psychographic segmentation • Explains and predicts consumer behavior © McGraw-Hill Education Divide Markets on Relevant Dimensions: Approaches for Segmenting Markets, 2 Geodemographic segmentation: Identifies specific households in a market by focusing on local neighborhood geography • Creates classifications of actual, addressable, mappable neighborhoods where consumers live and shop • Example: Nielsen PRIZM © McGraw-Hill Education The United States V A L ST M Framework Has eight psychographic groups based on two dimensions • Vertical dimension segments people based on the degree to which they are innovative and have resources • Horizontal dimension represents primary motivations for buying © McGraw-Hill Education Figure 5.4: V A L S T M Framework and Segments Source: Strategic Business Insights; www.strateglcbuslnesslnslghts.comNALS. © McGraw-Hill Education Jump to Figure 5.4: V A L ST M Framework and Segments, Appendix Develop Product Positioning, 1 Positioning strategies used • Focusing on the superiority to competitive products • Positioning based on use or application • Targeting particular types of product users • Positioning relative to a product class • Pitching directly against particular competitors © McGraw-Hill Education Develop Product Positioning, 2 Positioning map: Visual depiction of consumer perceptions of competitive products, brands, or models • Used to investigate how to position a product • Constructed by: • Surveying customers about various product attributes • Developing dimensions and a graph indicating the relative position of competitors © McGraw-Hill Education Figure 5.5: Positioning Map for Automobiles Jump to Figure 5.5: Positioning Map for Automobiles, Appendix © McGraw-Hill Education Decide Segmentation Strategy: Alternatives Deciding not to enter the market Deciding to be a mass marketer Deciding to market to one segment Deciding to market to more than one segment and design a separate marketing mix for each Jump to Decide Segmentation Strategy: Alternatives, Appendix © McGraw-Hill Education Criteria for Segmentation Viable segments must be: • Measurable: Firms must be capable of measuring their size and characteristics • Meaningful: Segment should have sufficient sales and growth potential to offer long-run profits • Marketable: Segment can be reached and served by the firm in an efficient manner © McGraw-Hill Education Design Marketing Mix Strategy • Selection of target market and designing the marketing mix should go hand in hand • Marketing mix decisions are made in conjunction with target market selection © McGraw-Hill Education 15e Chapter 4 Business, Government, and Institutional Buying © McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education. Chapter Outline • Categories of organizational buyers • The organizational buying process • Purchase-type influences on organizational buying • Structural influences on organizational buying • Behavioral influences on organizational buying • Stages in the organizational buying process © McGraw-Hill Education Business-to-Business or B 2 B Marketing • Marketing products and services to producers, intermediaries, government agencies, and other institutions rather than to consumers • Major area for profitable internet marketing © McGraw-Hill Education Categories of Organizational Buyers • Producers: Buy goods and services in order to produce other goods and services for sale • Intermediaries: Purchase products to resell at a profit • Government agencies: Operate at the federal, state, and local levels • Other institutions: Hospitals, museums, universities, nursing homes, and churches © McGraw-Hill Education Figure 4.1: A Model of the Organizational Buying Process Jump to Figure 4.1: A model of the Organizational Buying Process, Appendix © McGraw-Hill Education Purchase-Type Influences on Organizational Buying, 1 Straight rebuy: Routinely reordering a product from the same supplier that it had been purchased from in the past • Fast and requires few employees • Common among organizations that practice just-in-time inventory • Just-in-time inventory: System of replenishing parts or goods for resale just before they are needed Modified rebuy: Consideration of a limited number of alternatives before making a selection • Organizational buyer considers the new information and decides what changes to make • © McGraw-Hill Education If the change proves satisfactory and the product is required routinely, the buyer may then make it a straight rebuy Purchase-Type Influences on Organizational Buying, 2 New task purchase: Involves an extensive search for information and a formal decision process • Used for big-ticket items • Time consuming • Involves a relatively large number of decision makers • May involve joint decision making © McGraw-Hill Education Marketing Tactics for Reaching Organizational Buyers, 1 Type of Purchase Straight rebuy Marketing Element Promotional Approach Advertising • • Use reminder advertising Build image for company Promotion • Hospitality events at trade shows Selling • Any personal selling is designed to build relationships Automate the purchasing process, perhaps through E D I or electronic data exchange • Modified rebuy Advertising • Use comparison advertising to show differences between your product and similar products Promotion • Customer site demonstrations, hospitality events at trade shows Selling • Protect relationship with current customers with plant tours, special trade-in pricing, and other offers Anticipate or respond quickly to changes in customer needs • Source: Based on F. Robert Dwyer and John F. Tanner Junior, Business Marketing, 4th edition (Burr Ridge, I L: McGraw-Hill or Irwin, 2009), p. 73. © McGraw-Hill Education Marketing Tactics for Reaching Organizational Buyers, 2 Type of Purchase New task purchase Marketing Element Promotional Approach Advertising • Detailed, educational ads to try to get users to try product, substitute for old method Promotion • Use demonstrations at trade shows to show how it works Offer free trials or demonstrations at the customer’s site • Selling • Heavy emphasis on understanding customers’ needs and showing how new product satisfies needs better than old methods Source: Based on F. Robert Dwyer and John F. Tanner Junior, Business Marketing, 4th edition (Burr Ridge, I L: McGraw-Hill or Irwin, 2009), p. 73. © McGraw-Hill Education Structural Influences on Organizational Buying, 1 Structural influences: Design of the organizational environment and how it affects the purchasing process • Purchasing roles • Buying center: Organizational group formed from different departments with the responsibility of evaluating and selecting products for purchase • Organization-specific factors • Orientation: Dominant function in an organization may control purchasing decisions • Size: Joint decision making is likely in large organizations, and autonomous decision making is likely in small organizations • Degree of centralization: Joint decision making is less in a centralized organization than in a decentralized organization © McGraw-Hill Education Structural Influences on Organizational Buying, 2 • Purchasing policies and procedures • Ensure that appropriate products and services are purchased efficiently and that responsibility for buying is assigned appropriately • Sole sourcing: All of a particular type of product is obtained from a single supplier • Simplifies the buying process and converts formerly modified rebuys into simpler straight rebuys © McGraw-Hill Education Purchasing Roles • Initiators: Start the buying process by recognizing a need or a problem in the organization • Users: Use the product to be purchased • Influencers: Affect the buying decision by helping define the specifications for what is needed • Buyers: Have formal authority and responsibility to select the supplier and negotiate the terms of the contract • Deciders: Have the formal and informal power to select or approve the supplier that receives the contract • Gatekeepers: Control the flow of information in the buying center © McGraw-Hill Education Behavioral Influences on Organizational Buying: Personal Motivations Organizational buyers are subject to the same personal motives or motivational forces as other individuals While examining buyer motivations, it is necessary to: • Consider both personal and nonpersonal motivational forces • Recognize that the relative importance of the forces is not a fixed quantity © McGraw-Hill Education Behavioral Influences on Organizational Buying: Role Perceptions, 1 Manner in which individuals behave depends on: • Their perception of their role • Their commitment to what they believe is expected of their role • Maturity of the role type • Extent to which the institution is committed to the role type © McGraw-Hill Education Behavioral Influences on Organizational Buying: Role Perceptions, 2 Organizations can be divided based on differences in degree of employee commitment • Innovative firms • Individuals in the firm approach their occupational roles with a weak commitment to expected norms of behavior • Adaptive firms • Individuals have moderate commitment • Lethargic firms • There is strong commitment to traditionally accepted behavior © McGraw-Hill Education Stages in the Organizational Buying Process, 1 Organizational need • Organizational purchases are resulted by recognizing needs and a willingness and ability to meet them Vendor analysis: Process by which organizational buyers rate each potential supplier on various performance measures • Used to: • Develop a list of approved vendors • Compare competing vendors • Compare performance on evaluation criteria and evaluate the process of vendor selection © McGraw-Hill Education Stages in the Organizational Buying Process, 2 Purchase activities • Number of purchasing activities to be performed and their difficulty are influenced by: • Complexity of product or service • Number of suppliers available and pricing • Importance of product to buying organization • Pricing Postpurchase evaluation: Evaluation of vendors and the products to determine whether the products are acceptable for future purchases • Different functional areas have different evaluation criteria © McGraw-Hill Education
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