MATTU UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MARKETING MANAGEMENT

Principle of Marketing Individual Assignment for department of Marketing Management

Enrollment: Regular -2nd Year Maximum mark: 20%

Submission date: 10/09/2015E.C.

General Instruction

 Use different sources (references) as much as possible and write those sources at the end
of your work.
 Copying from others or handout given by your instructor will disqualify your result.
 The total number of pages should not be more than four pages.

Answer the following questions Accordingly

1. Discuss the types of consumer buying behavior by taking practical examples (2 points).
2. Compare and contrast Market segmentation, market Targeting and market positioning
(3 points).
3. List and explain the Basis for Segmenting Consumers Market by providing examples (4
points).
4. Briefly explain stages of PLC(Product Life Cycle) and their respective Marketing
Strategies (product, price, promotion and distribution Strategies) at each stage. Show
graphically (4 points).
5. Discuss new product Pricing Strategies in detail (4 points).
6. Write the importance of product branding, packaging and labeling by providing clear
examples (3 points).

1. Discuss the types of consumer buying behavior by taking practical

examples

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Types of Consumer buyer behavior
Consumer Buyer behavior is the driving force behind any marketing process. It refers to the
decision and acts people undertake to buy products or services for individual or group use. There
are four types of consumer buying behavior:

I. Complex buying behavior: This type is also called extensive. The customer is
highly involved in the buying process and thorough research before the purchase due to
the high degree of economic or psychological risk. Examples of this type of buying
behavior include purchasing expensive goods or services such as a house, a car, an
education course, etc.
II. Dissonance Reducing Buyer Behavior: When the product is expensive, less-
frequently purchased and high in risk, dissonance, therefore dissatisfaction may take place. The
consumer is concerned that he/she might regret the decision when the consumer finds out that
the same product offered by other brands is better in terms of quality and durability. Therefore,
such behavior is mainly concerned with reducing post-purchase dissonance, That is why the
customer is highly involved in the purchase but finds it difficult to identify the differences
between the product offered by various brands, as well as there is limited choice, which also
affects decision making. Examples of this type of buying behavior include: paint, floor tiles,
waffle maker, etc
III. Habitual Buying Behavior: This behavior is applied when the product is economical
and bought frequently, but the consumer has less involvement, as to which brand of the product
he/she is buying. So, there is not much consideration involved before taking the buying decision,
as it is purely based on brand familiarity and availability. People buy such items out of habit or
familiarity with the taste, and not due to strong brand loyalty. For Example: teeth paste, tea,
coffee, salt, etc
IV. Variety Seeking Buying Behavior: When the buyer switches between brands not
because of the dissatisfaction with the previous purchase but out of variation, therefore they
want to try something new and avoid the boredom. In such a case buyer has certain beliefs about
the product and after a little evaluation makes the purchase and develops an opinion about the
product at the time of consumption. For example: sunglasses, lipstick, hand sanitizer

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 2. Compare and contrast Market segmentation, market Targeting and
market positioning:

Segmentation:
 Market Segmentation refers to the process of creation of small groups (segments)
within a large market to bring together consumers who have similar requirements,
needs and interests.

 Identification of consumer’s needs and market segments

 Develop profiles resulting market segments

 Determine important characteristics for each segment

Targeting: Target market is a cluster of potential customers to whom a business

needs to sell products or services.

 Evaluate potential and commercial attractiveness of each segments

 Select one or more target segments

Positioning: Once the organization decides on its target market, it strives hard to
create an image of its product in the minds of the consumers.

 The marketers create a first impression of the product in the minds of consumers
through positioning.

 Positioning helps organizations to create a perception of the products in the minds

of target audience

 Develop detailed product positioning for selected segments

 Develop of marketing mix for each segment according to chosen position

3 List and explain the Basis for Segmenting Consumers Market by providing
examples:

The four bases for segmenting consumer market are as follows:

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1, Demographic Segmentation: The most common way to identify a consumer
market is by demographic segmentation, which refers to the criteria most businesses use to
understand how groups of their target market are different from one another. The criteria for
demographic segmentation includes: Gender, Age, Family status, Sexual orientation,
Occupation, Income, Education, Religion, Ethnicity, Nationality. For example, a man in his
early 30s has different preferences than a woman in her late 60s.  The young man may be
interested in athletic name-brand shoes, while the older woman may want comfortable sandals
with arch support

 2, Geographic Segmentation: it refers to dividing a market into different

geographical units such as nations, states, regions, cities, or neighborhoods. For example,
national newspapers are published and distributed to different cities in different languages to
cater to the needs of the consumers.Geographic segmentation elements include:

 Region or area, such as country, state, province, county, town or city

 Size, such as population or population density
 Climate, such as weather patterns

3, Psychographic Segmentation:

While demographic and geographic segmentation look at many tangible criteria, psychographic
segmentation is about how consumers live their lives. Some of these qualities are intangible
and difficult to research.  For example, an avid basketball player may want to buy basketball
shoes and jerseys, while a musician may be interested in specific instruments.

4, Behavioral Segmentation

While demographic, geographic and psychographic traits include specific qualities about your
customers and their needs, behavioral segmentation is about how your customers feel about
your products. This is a good starting point for market segmentation because it is directly
related to your business. For example, Cadbury’s advertising to promote the product during
wedding season is an example of occasion segmentation.

Behavioral segmentation includes:

 Benefits your consumers are looking for from the product

 How often they need the product or how often they use the product
 How ready they are to buy the product right now
 Whether they feel loyal toward your brand
 When they buy the product, such as on holidays or for specific milestones

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4, Briefly explain stages of PLC(Product Life Cycle) and their respective
Marketing Strategies (product, price, promotion and distribution Strategies)
at each stage. Show graphically:

The product life cycle is the process a product goes through from when it is first introduced
into the market until it declines or is removed from the market. The life cycle has four stages:
1, Introduction Stage: In the first stage, the product is introduced in the market and its
acceptance is obtained. As the product is not known to all consumers and they take time to
shift from the existing products, sales volume and profit margins are low. Competition is
very low, distribution is limited and price is relatively high.

2,  Growth Stage: As the product gains acceptance, demand and sales grow rapidly.
Competition increases and prices fall. Economies of scale occur as production and
distribution are widened. Attempt is made to improve the market share by deeper
penetration into the existing market or entry into new markets. The promotional expenditure
remains high because of increasing competition and due to the need for effective
distribution. Profits are high on account of large scale production and rapid sales turnover .

 3, Maturity Stage: During this stage prices and profits fall due to high competitive
pressures. Growth rate becomes stable and weak firms are forced to leave the industry.
Heavy expenditure is incurred on promotion to create brand loyalty. Firms try to modify and
improve the product, to develop new uses of the product and to attract new customers in
order to increase sales.
4, Decline Stage: Market peaks and levels off during saturation. Few new customers buy
the product and repeat orders disappear. Prices decline further due to stiff competition and
firms fight for retaining market share or replacement sales. Sales and profits inevitably fall
unless substantial improvements in the product or reduction in costs are made. The product
is gradually displaced by some new products due to changes in buying behaviour of
customers. Promotion expenditure is drastically reduced. The decline may be rapid and the
product may soon disappear from the market. However, decline may be slow when new uses
of the product are created.

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5, Discuss new product Pricing Strategies in detail:

 There are several different pricing strategies

Pricing strategy refers to method companies use to price their products or services.

1, Cost-plus pricing: Many businesspeople and consumers think that cost-plus pricing,

or mark-up pricing, is the only way to price. This strategy brings together all the contributing
costs for the unit to be sold, with a fixed percentage added onto the subtotal.

2, Competitive pricing: Competitive pricing is all about setting a price-point in relation to

similar products sold by other companies – one that will give you a competitive advantage.This
strategy is often used in saturated markets and with mass-sold goods that are well-established –
for example, chewing gum, ‘big box’ beer, household products, or services like cleaning or
dinning.

3, Price skimming: Price skimming is about setting the price of a new product high to capitalise
on consumer demand, and then eventually lowering it over time. It works best for products that
are highly anticipated, innovative, or of the moment and which have no real competition.
Electronics and gaming is a big one for price-skimming.

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4, Penetration pricing: Penetration pricing uses the opposite approach to price skimming. It’s
when a business looking to break their product into a market offers a low initial price point in
order to reel buyers in and lure them away from competitors. The idea is that once the product
has a following and has established itself in the market, the price can gradually be adjusted
upwards. It can be an effective marketing tool to introduce a large audience to the product or
brand.

5, Value-based pricing: In value-based pricing, the perceived value to the customer is primarily

based on how well it’s suited to the needs and wants of each customer.

 The price is a better fit with the customer’s perspective.

 The pricing brings more profit, allowing you to acquire more resources and grow your
business.

6 Write the importance of product branding, packaging and labeling by

providing clear examples:

Branding: A brand is a name, picture, design, or symbol, or combination of those

items, used by a seller to identify its offerings and to differentiate them from competitors’
offerings. Branding is the set of activities designed to create a brand and position it in the
minds of consumers. A brand name, like Apple, is the spoken part of a brand’s identity.
A brand mark is the symbol, such as Coke’s wave or Apple Computer’s multicolor apple
Packaging: The packaging is the outer covering of the product. It plays a crucial role
as an effective sales tool and encourages customers to buy the product. It performs
several functions, like protection, storage, ease of handling, and convenience in usage.

 protecting the product from damage and contamination during shipment, as

well as damage and tampering once it’s in retail outlets;
 preventing leakage of the contents;

Labelling: Labelling provides all the necessary information related to the product to the
consumers. The labels help customers gain knowledge about the product quality and
feature without even opening or tasting it. Consumers can recognize the standard of the
product with the labels. Labels also give information about the price, quality, and
quantity of the product, Product Identification, Product Grade, Product Description,
Product Promotion

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Reference

[1]https://businessjargons.com/types-of-consumer-behavior.html

[2]https://snov.io/glossary/buyer-behavior/

[3]https://www.differencebetween.com/difference-between-market-segmentation-and-target-
market/

[4]https://www.smartinsights.com/wp-content/uploads/2021/01/STP-marketing-funnel.png

[5]https://www.yourarticlelibrary.com/marketing/market-segmentation/top-4-bases-for-
segmenting-consumer-market/32293

[6]https://smallbusiness.chron.com/basis-segmenting-consumer-markets-1417.html

[7]https://www.economicsdiscussion.net/marketing-management/product/product-life-cycle-
stages/32286

[8]https://www.unleashedsoftware.com/blog/the-7-main-product-pricing-strategies-and-when-to-
use-them

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