Market segmentation is the process of dividing markets into categories of

Market segmentation is the process of dividing

This preview shows page 96 - 98 out of 167 pages.

Market segmentation is the process of dividing markets into categories of customers. Businesses have learned that marketing is more successful when it is aimed toward specific target markets groups of consumers with similar wants and needs. Markets may be segmented by geographic, demographic, psychographic, or product use variables. Market research is the study of what buyers need and of the best ways to meet those needs. This process entails studying the firm’s customers, evaluating possible changes in the marketing mix, and helping marketing managers make better decisions about marketing programs. The marketing research process involves the selection of a research method, the collection of data, the analysis of data, and the preparation of a report that may include recommendations for action. The four most common research methods are observation, surveys, focus groups, and experimentation. A number of personal and psychological considerations, along with various social and cultural influences, affect consumer behavior. When making buying decisions, consumers first determine or respond to a problem or need and then collect as much information as they think necessary before making a purchase. Post-purchase evaluations are also important to marketers because they influence future buying patterns. The industrial market includes firms that buy goods falling into one of two categories: Goods to be converted into other products and goods that are used up during production. Farmers and manufacturers are members of the industrial market, Members of the reseller market (mostly wholesalers) are intermediaries who buy and resell finished goods. Besides governments and agencies at all levels, the government and institutional market includes such non-government organizations as hospitals, museums, and charities. There are four main differences between consumer and organizational buying behavior. First, the nature of demand is different; in organizational markets it is often derived (resulting from related consumer demand) or inelastic (largely unaffected by price changes). Second, organizational buyers are typically professionals, specialists, or experts. Third, organizational buyers develop product specifications, evaluate alternatives more thoroughly, and make more
Image of page 96
Introduction to Business –MGT 211 VU © Copyright Virtual University of Pakistan 97 systematic post-purchase evaluations. Finally, they often develop enduring buyer-seller relationships.
Image of page 97
Image of page 98

You've reached the end of your free preview.

Want to read all 167 pages?

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture