1. Describe the process of market segmentation. Why is it important in the study of consumer behavior?
Market segmentation is the method of dividing a total market into groups consisting of people who have somewhat similar product needs. A market segment is the breaking up of a market made up of people or a business with one or more characteristics that cause them to demand similar products or services based on traits of those products such as price or function. In order for a market segment to be workable, it must be large enough to make a profit.
The process of market segmentation entails four steps. The first step is “Identifying product-related need sets”. This step includes focusing on the needs of the consumer then consumer characteristics related to those needs. The second step is “Grouping customers with similar need sets”. In this step, research of the consumer is involved, such as group interviews, surveys, and product concept tests. The third step is “Describing each group”. This step entails describing each group of consumers in terms of their demographics, lifestyles, and media usage. In order to effectively communicate with consumers, one must understand the context in which a product is purchased and consumed, how customers think about the product, and the lingo the customer uses to describe it. The fourth step is “Selecting an attractive segment(s) to serve”. This step includes selecting the “target market”. In order to make this decision, the size and expansion of the segment, the intensity of the present and projected competition, the cost of providing the superior value, and so forth are very important.
Market segmentation is imperative in the study of consumer behavior because a business that develops a total product focused solely on the needs of the consumer will be able to meet that consumer’s desires.
2. What is required to provide superior customer value?
Customers do not want products and services, they want what those products and services will do to benefit them. To provide superior customer value, a business must learn to create satisfied customers and future sales which require customers to believe that the product will meet their needs and offer superior value after they have used it. A customer buys a product based on his or her perception of his or her expectation. The product must deliver as much or more value than the customer even thought possible and must satisfy the customer’s needs. Superior customer value requires an extremely thorough understanding of consumer behavior.
3. What is marketing strategy? Why is it important to the study of consumer behavior?
The core of good marketing strategy is “providing superior customer value requires the organization to do a better job of anticipating and reacting to customer needs than the competition does.” It begins with an analysis of the considered market. This includes a detailed analysis of the organization’s capabilities, the competitors’ strengths and weaknesses, the economic and technological forces affecting the market, and the existing and possible customers in the market. Next, the marketing strategy is formulated and seeks to provide the customer with more value than its competitor while still producing a profit for the organization. Marketing strategy is important in the study of consumer behavior because a consumer’s reaction to the marketing strategy is the main determinant in an organization’s success or failure.
4. What is a marketing mix? What is each of the factors in the marketing mix designed to accomplish?
A marketing mix is formulates the marketing strategy by taking the product and learning what the target market is looking for. The four factors in the marketing mix are product, price, place, and promotion. A marketing mix is the combination of these four factors which meets customer needs and provides customer value. The combining and coordination of these elements will be more effective than depending on one. By using