CONSUMER BEHAVIOUR NOTES

Q1 MARKET SEGEMNTATION IMPERATIVES

IMPERATIVES FOR MARKET SEGMENTATION STRATEGY TO SUCCEED
SEGMENTS MUST BE:
• Substantial
• Sustainable
• Accessible
• Profitable

Q2 B2B and B2C Similarities

• Objectives are identical
• Both think in terms of Customers
• People in both cases buy solutions and not products or services
• Both have Unique Selling Propositions (USP) and in recent
times Multiple Selling Propositions (MSP)
• Both may be trapped in Marketing Myopia
Q3 B2B and B2C buyers behaviour

Q4 B2B characteristics of marketing

• Number of buyers is few

• Geographical concentration is generally present. For Example—
Chemicals, Pharmaceuticals, Textiles, Leather, Paper Mills,
Engineering
• Volume of purchase per order is high
• Technical complexities
• Knowledgeable customers
• Non-standard/Tailor made products
• Special specifications
 • Formal approvals
• Group decisions
• Hierarchical/Multiple/Protracted Negotiations
• Short Channels
• Stony forces of Conservatism/Risk Aversion/Resistance to
change
• Higher stakes
• Possibility of Oligopoly
• Possibility of Reciprocity
• Prices not always the overriding factor
• DERIVED DEMAND

Q5 Make vs Buy
When to make
• Absence Of Suitable Vendors
• Very Tight Specifications
• Quantity Required Is Small And Spec Are Tight
• Product Is Too Specialized
• Secrecy Needs To Be Protected
• May Be Produced At A Much Lower Cost
• Use Excess Manufacturing Capacity
• High Captive Consumption
 • Big External Market
• Backward/Forward Integration To Deploy Excess Funds

Q6 Webbers law

Weber’s law is often used in marketing, particularly with regards to price

increases for products and services. It implies for example that it is possible to
increase prices by small enough amounts – that fall under the “absolute
threshold” – without your customers even noticing.

Q7 Effect of one external environment

. What a consumer eats, wears, and believes are all learned and influenced by the culture they
live in, their family, childhood and social environment. All of these are external factors that
affect purchases.

Here is a list of the external influences that affect consumer behavior:

 Age
 Race
 Gender
 Education level
 Cross-cultural influences
 Sub-cultures (Hispanic-American)
 Social status (upper, middle, lower)
 Customs, Beliefs, Expectations, Traditions, Habits

Reference groups are groups that have shared beliefs, interests and behaviors and influence a
consumer’s behavior: