Marketing Research,
Segmentation, & Consumer
Behavior
What more do you need??
MARKETING RESEARCH
 Definition:
 Used
to implement the ____________
Research is used to:
 Identify
•
•
•
•
problems/opportunities
Customer complaints
New product ideas
Identify high profit customers
Understand competitors
 Generate,
refine and evaluate
marketing actions
Research used to:

Monitor marketing
performance
 sales
 market share
 profit
 satisfaction
 return on quality
Research is NOT a Cure!
 Classic




Blunders
Why do I need to know this?

You will use
research for
decisions

Research can
easily be biased

Studies may
mislead
Primary Data: Information
Sought
 Facts
 Opinions
 Motives
Primary Data -- Collection
Methods
QUALITATIVE:

OBSERVATION

FOCUS GROUPS
QUANTITATIVE:

SURVEYS
Target Markets and Consumer
Behavior
Homework Discussion

Product:
Describe the person who buys this product:

What is the Marketing Mix for the product?

 Product
 Price
 Place
 Promotion
More Homework Talk

Other Product:
Describe the person who buys this product:

What is the Marketing Mix for the product?

 Product
 Price
 Place
 Promotion
Why do marketing mixes
differ between products?

_____________

_____________

_____________
So, what do we know about
consumers?
 Consumer
behavior:
WHY STUDY CONSUMER
BEHAVIOR
 Influence

Satisfy

Protect
Haire’s Shopping List
1 1/2 lbs hamburger
2 loaves Wonder Bread
1 bunch of carrots
1 Rumfords Baking
Powder
Nescafe Instant coffee
2 cans Del Monte
peaches
5 lbs potatoes
1 1/2 lbs hamburger
2 loaves Wonder Bread
1 bunch of carrots
1 Rumfords Baking
Powder
Maxwell House coffee
(drip ground)
2 cans Del Monte
peaches
5 lbs potatoes
Do consumers stay the
same? Y N
 (More
or less) diversity
 Non-traditional
methods of buying and
selling (increasing/decreasing)
 Move
from conspicuous consumption to
rational consumption.
 US
consumers age shifting
 Therefore,
strategies must __________
Influences on
Consumer Decision Making
Cultural/Social
Environment
Consumer
Individual
Differences
Decision
Process
Behavioral
Adapted from 1997 Irwin/McGraw-Hill
Situational
Factors
BUYER DECISION
PROCESS
Problem
Recognition
Information
Search
Alternative
Evaluation
Purchase
Decision
Postpurchase
behavior
Types of consumer decisions
 High-involvement
decisions
 high
importance to the individual
 lots of information processing
 extensive problem solving
 Low-involvement
 low
decisions
importance to the individual
 little information processing
 routinized response behavior
Break out
Hi Involvement Lo Involvement
Recognize need
or problem
(how)
Search for
information
(where, what info,
how much)
Evaluate
alternatives
(how many)
Purchase
(easy/hard)
STAGE 1: PROBLEM
RECOGNITION

Discrepancy
between the
current state and
desired state

Incentives

Drives
STAGE 2: INFORMATION
SEARCH
 Internal
 Extent
then external
of Search = Cost vs Benefits
Information may not exist
because:
 Firm
 Natural
asymmetry = inefficient
markets
 Product characteristics:
1. Search
2. Experience
3. Credence
STAGES 3 & 4:
Evaluation and Choice

COMPENSATORY
PROCESSING

NONCOMPENSATORY
PROCESSING

MARKETING
IMPLICATIONS:
A CAVEAT
 Expectations:
 EXPECTANCY
EFFECTS:
 Examples:
Rosenthal’s
- smart/stupid rats
Deighton - Ford Campaign
POST-PURCHASE
BEHAVIOR
 Satisfaction
vs Dissatisfaction
 A function of ____________
 SO--
UNDER ______ and OVER
________
 Above
average satisfaction leads to:
IMPACT OF CUSTOMER
SATISFACTION
PIMS STUDY:
ABOVE AVERAGE CUSTOMER
SATISFACTION LEADS TO:
________________
________________
________________
Responses to Dissatisfaction





 Which
is most likely?
Post Purchase Behavior
 Dissonance
 Most
likely to occur when:
 Dissonance
vs
Satisfaction/Dissatisfaction
IMPLICATIONS:
Methods to -Increase Satisfaction
Reduce Dissonance
Lower Expectations
Meet Expectations
Follow-ups
Warranties
Money-back
Liberal Return
policies...
Break-out Discussion
You own a small bank.
1. Do you want consumers to express
their dissatisfaction to you?
2. How can you increase the chances
that customers will do what you want
in #1 above?
3. Is this a situation where dissonance
is likely? If yes, what should you do?
Market Segmentation--based
on consumer behavior
 Def:
 Look
for those people most likely to
want your product/service to target
Bases for segmentation
 Individual
Differences
 Demographics (gender, age
income …)
 Personality
 Lifestyles and Psychographics
AIO
VALS2
 Personality
Risk Perception
Financial
Social
Psychological
Performance
Physical
Methods to Reduce Risk
Perceptions
Better warrantees
Money-back guarantees
Liberal return policies
Low-priced alternative
Small package size
Free samples
Endorsements
Government/Private
tests
Complete performance
information
Complete ingredient
information
Psychographics
 Activities--work hobbies, social events,
entertainment, shopping, memberships, sports
 Interests--family, home, job, recreation
fashion, food, media, achievements
 Opinions--self, social issues, politics,
business, education products, future culture
 Add to: Demographics--age, education, income,
gender, occupation, family size, city size, stage in
lifecycle
Actualizers
Principle Orie nte d Sta tus Oriente d
Abunda nt Resources
Action Oriented
.
Marketing
VALS2 Segmentation
Fulfilleds
Achievers
Experiencers
Relievers
Strivers
Makers
Bearde n
Ingram
LaForge
S econd edi ti on
Strugglers
Slide 75
© 1997 Irwin/McGraw-Hill
Minimal Resourc es
Bases for segmentation

Cultural/Social
 Values/norms
 Subculture
 religion
 race/ethnic
background
 Reference group
 family
 social class
More Segmentation Bases
 Situational
Factors
 Geographic
 Usage (Occasion of Use)
 Behavioral
 Benefit
 Usage
(heavy half)
Develop two ads for cat food using two
different segmentation bases.
How many bases of segmentation
should a firm use?
 Example:
Prizm
Target markets




The market segment that
the firm tailors its
products and strategies
to
The group whose wants &
needs the firm attempts to
meet
Product differentiation -the firm’s offerings differ
from other offerings in the
marketplace
Distinctive Competence
Criteria for effective segmentation
/ target markets






Break-out

Evaluate the US Hispanic market on the
following criteria.
 Measurability
Hi
Mod Lo
 Accessibility
Hi Mod Lo
 Substantial
Hi
Mod Lo
 Durability
Hi
Mod Lo
 Differential
Responsiveness
Hi
Mod Lo
The Hispanic Market
Hispanic households tend to be larger (3.5 persons per household as opposed to the 2.7 persons per
non-Hispanic household) and Hispanics tend to be younger (median age of 23.6 vs. US average of
32) than non-Hispanics
About 3/4 of Hispanics speak Spanish at home. Many view Spanish -language TV and listen to Spanishlanguage radio.
Hispanics tend to be Roman Catholic; however, many (about 1/5) are leaving the Catholic Church and
practicing evangelical Protestantism.
Hispanic populations are concentrated in Florida (Cuban- Americans), the Southwest (MexicanAmericans) and in New York City (Puertorican-Americans).
The size of the Hispanic population is increasing (about 12% of the US population). Additionally, income
levels are increasing.
Some Hispanics want to assimilate into the US’s overall culture and do not identify with their Hispanic
heritage. Others wish to maintain their heritage and reconnect with their Hispanic roots.
NOTE: Much of this information is drawn from Solomon’s Consumer Behavior text (p 474-81, 3rd edition
and Peter and Olson’s Essentials of Consumer behavior text, 1st edition (1994)
Targeting Strategies
1. Undifferentiated strategy
_________ offering ____________
mix(s)
2. Differentiated strategy
_________ offerings __________
mix(s)
Counter-segmentation strategy
P.S.--what’s a mix?????
Positioning
 Definition:
 How
the target market
perceives/views your product. Your
image in the target market’s mind
Segmentation and Ethics
 Children
as special populations
 Gender/ethnic
 Harmful
role stereotyping
products/non-harmful
products
 Privacy
Service Exercise
Services are defined as “products, such as a bank loan or home security, that
are intangible, or at least substantially so.” (AMA definition) These are
offerings that cannot be stored, are often inseparable form the producer,
and are not standardized.
Here are some examples of services: Health care, insurance, haircuts,
accounting, banking, consulting for information systems, Internet, sports
events, robotics, lawyers, university curriculums, concerts, dentists,
information providers, hotels, golfing green fees, taxies, clothing
alterations, massages, training, air transportation, lawn care, security
guards, janitorial services, restaurants, movie rentals, computer repair,
plumbing repair, executive recruiting, catering, doctors. (Is that enough
examples????)
On a sheet of paper, you are to describe a two actual service encounter that
you have had. Please think about a really HORRIBLE service encounter
and a really GREAT experience. Describe this experience without naming
the service provider. We’ll talk about this in the next class.