Unit 2 - Consumer Flashcards
Target Market
A market segment that has been deliberately selected by an organization
Used to focus their marketing/advertising efforts
May have several target markets
Will typically have distinct market offerings each of them.
Example Car Manufacturers
Mass Marketing
Focusing on the overall market
Why is Target Market Important
A focused target allows a company develop a unique position
Without a clear target market a company will have a limited understanding of their customers
Marketing efforts (advertising as one) will be vague, weak and have limited effectiveness
Choosing Target Market Criteria
Evaluate the attractiveness of all the segments using set of criteria
Segment Size*
Growth Rate*
Profit Margins*
Competitors*
Distribution*
Role of Brand
Strategy/Goals
Resources
Financial Criteria
Do the numbers justify choosing that segment?
Segment Size - big enough, meets min. requirements
Segment Growth Rate - growing or declining
Profit Margin - higher profit margins are more attractive
Structural Attractiveness
Is the segment operable
Competitors
Big established competitors, lots of competition, close substitutes? Ex. Coffee Market?
Distribution Channels
Can we gain access to distribution channels? How much money would it take? Ex. Grocery delivery?
Basic Model of Consumer Behavior
Marketing and Other Stimuli
Product, price, place, promotion, external environments
Buyer’s Black Box (Their mind)
The Buying Decision Process (called this because we cannot know precisely for every consumer exactly what process goes on in the mind, but it includes Buyer Characteristics and Buyer Decision Process)
Buyer’s Response
Choice of product, brand, dealer; Timing and amount of purchase
Economic Man Theory
Consumer decision making when consumers are selfish and rational.
Want to maximize benefits and look at all possibilities before deciding
Seller also is economic man, as wants to max profits
Stimuli Theory
Stimuli that consumers respond by purchasing
Affected by external & internal factors
External: Economic, Political, Cultural, 4 P’s
Internal: Beliefs, Values, Motivation, Lifestyle
Blackbox (Consumers Mind) processes choices
Buyer Behaviour as Problem Solving Theory
Set of activities that person to solve problem and triggered from unmet need (physical (milk, bday gift), psychological (feel secure/have fun))
Marketing in Terms of Problem Solving Theory
Want-fulfilling, not need-fulfilling business. Ex. H&M wants consumer you to desire their brand
Need VS Want
Need is a basic deficiency for an essential item. You need food, water, air, security
Want places specific, personal criteria on how a need must be fulfilled
Maslow’s Hierarchy of Needs
Motivational theory in psychology, proposing that human needs are organized into a hierarchical structure
Lower needs must be met before higher ones can be pursued
Physiological Needs
These are the most basic needs for survival, such as food, water, shelter, and sleep
Safety Needs:
Once physiological needs are met, individuals seek safety and security, including security of body, employment, resources, morality, family, health, and property.
Love and Belonging Needs:
After safety, individuals desire love, affection, and a sense of belonging, including friendship, family, and intimacy.
Esteem Needs:
Once belonging needs are met, individuals seek esteem and recognition, including self-esteem, status, respect, and strength.
Self-Actualization:
At the top of the hierarchy is the need for self-actualization, which is the desire to become the best version of oneself and to fulfill one’s potential.
Alderfer’s ERG Theory
Maslow’s Hierarchy of Needs into three core categories: Existence, Relatedness, and Growth
Relatedness
These focus on social connections, belonging, and interpersonal relationships, aligning with Maslow’s social needs.
Existence
These relate to basic survival and material well-being, encompassing physiological and safety needs
Growth Needs
These involve personal development, creativity, and the desire to achieve one’s full potential, corresponding to Maslow’s esteem and self-actualization needs.
