1. MGT301 Principles of Marketing
Lecture-17

2. Summary of Lecture-16

3. Business Markets and Buying Behavior

4. Model of Business Buyer Behavior

5. Business Buying Situations

6. Modified Rebuy Straight Rebuy
Business Buying Situations
This CTR relates to the material on pp
New Task Buying
Major Types of Buying Situations
Straight Rebuy. This is an industrial buying situation in which the buyer routinely reorders something without any modifications in the order. Marketers of industrial supplies seek to establish this type of relationship with the customer. When buyers place straight rebuys, competitors have little or no chance of making a sale.
Modified Rebuy. This is an industrial buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers. This increases the number of participants in the buying decisions thus increasing the combination of influences on the decision. "In" suppliers worry that competitors will gain some business. "Out" suppliers recognize the situation as an opportunity.
New Task Buying. This is an industrial buying situation in which the buyer purchases a product or service for the first time. New task buying is the most complex of buying decision processes made by a company. It is also both the greatest opportunity and challenge to the marketer. Marketers must consider that new task buying situations often arise in response to still-emerging problems seeking solutions.
Modified Rebuy
Involved Decision Making
Straight Rebuy

7. Major Influences on Business Buying
Level of
demand
Economic
outlook
Interest rate
Rate of techno-
logical change
Political and
regulatory
developments
Competitive
Social responsi-
bility concerns
Environmental
Objectives
Policies
Procedures
Organizational
structures
Systems
Organizational
Interests
Authority
Status
Empathy
Persuasive-
ness
Interpersonal
Age
Income
Education
Job position
Personality
Risk attitudes
Culture
Individual
Business
Buyer

8. Problem Recognition Product Specification Supplier Search
General Need Description
Product Specification
Stages in Business Buying Process
This CTR corresponds to Table 6-2 on p. 179 and relates to the material on pp
Supplier Search
Proposal Solicitation
Supplier Selection
Stages in Business Buying
Problem Recognition. Problem recognition can result from internal or external stimuli. They may emerge from an identified shortage or ideas for improvements recognized by buyers.
General Need Description. The buyer describes the overall characteristics and quantities of the needed item. For complex items, this step may require coordinating the efforts of many specialists.
Product Specification. A developmental team must translate general needs into product specifications. An engineering value analysis team may look at alternative designs to reduce production costs.
Supplier Search. The buyer conducts a search for the best vendors for the product specifications.
Proposal Solicitation. The buyer invites qualified suppliers to submit proposals covering the terms of supply and support. Selected proposals may be asked to make formal presentations.
Supplier Selection. The buyer selects suppliers based upon a combination of technical competence and service record and reputation. Negotiation of specific terms may occur before final selection, especially on price.
Order Routine Specification. The buyer specifies the details of the supplier's contract listing technical specifications, delivery terms, policies for return and warranties, and quantities needed. Sellers will seek blanket contracts binding them closer to the buyer.
Performance Review. The buyer will review how the supplier contract is working for the company and may continue, amend, or drop the seller.
Order Routine Specification
Performance Review

9. Today’s Topics

10. Market Segmentation

11. Shift from…
Mass Marketing ………. Segmented Marketing

12. 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.

13. Major Steps in Target Marketing
Segmentation
Target Marketing
Market Positioning

14. Market Segmentation Target Marketing Market Positioning
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

15. Steps in Market Segmentation, Targeting, and Positioning

16. 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

17. Segmenting Consumer Markets

18. What is Market Segmentation?

19. 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

20. 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

21. Segmentation

22. Segmentation Variables
Geographical segmentation
Demographic segmentation
Psychographic segmentation
Behavioral segmentation

23. Geographical Segmentation

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

25. Geographic Segmentation Variables

26. World Region or Country
Province
City
Neighborhood
City or Metro Size
Density
Climate

27. Demographic Segmentation
Dividing the market into groups based on demographic variables such as age, gender, etc.

28. Demographic Segmentation Variables

29. Occupation
Education
Religion
Race
Generation
Nationality
Age
Gender
Family size
Family life cycle
Income

30. Psychographic Segmentation
Dividing a market into different groups based on social class, personality etc.

31. Psychographic Segmentation Variables
Social class
Lifestyle
Personality

32. Behavioral Segmentation

33. Dividing a market into groups based on consumer knowledge, attitude etc.

34. Behavioral Segmentation Variables

35. Occasions
Benefits
User Status
Attitude Toward the Product
User Rates
Loyalty Status
Readiness Stage

36. Enough for today. . .

37. Summary
Market Segmentation

38. Segmentation

39. Major Steps in Target Marketing
Segmentation
Target Marketing
Market Positioning

40. Segmentation Variables
Geographical segmentation
Demographic segmentation
Psychographic segmentation
Behavioral segmentation

41. Market Segmentation (cont..)
Next….
Market Segmentation (cont..)

42. MGT301 Principles of Marketing
Lecture-17