Basic Concepts of Marketing
Last updated
Last updated
Market Segmentation is the process of dividing a market of potential customers into groups, or segments, based on different characteristics. The segment created are composed of consumers who will respond similarly to marketing and who share traits such as similar interests, needs or location.
The STP model is a process used in marketing to segment a market, target a specific group of consumers, and then position the product or service in a way that it will appeal to that group. STP stands for Segmentation, Targeting and Positioning.
Segmentation: This is the process of dividing the market into groups of consumers with similar needs or characteristics. Market segmentation allows companies to identify the specific needs and wants of different groups of consumers and tailor their marketing strategies accordingly.
Targeting: This is the process of choosing which segments of the market to target with a particular product or service. This is done by evaluating the attractiveness of each segment and selecting one or more segments to target.
Positioning: This is the process of creating a unique image and identity for the product or service in the minds of the target consumers. This is done by differentiating the product or service from competitors and highlighting its unique features and benefits.
The goal of the STP process is to create a clear and distinctive image for a product or service in the minds of target consumers, making it more attractive and appealing than competitors' products or services. This will help in creating a loyal customer base and increase the sales and revenue of the company.
Segmentation variables are used to divide the market into distinct groups of consumers with similar needs or characteristics. The following are four common types of segmentation variables:
Geographic Segmentation: This type of segmentation divides the market based on geographic factors such as region, climate, population density, and urban or rural location. This is useful for companies that sell products or services that are affected by geographic factors such as weather or regional preferences.
Demographic Segmentation: This type of segmentation divides the market based on demographic factors such as age, gender, income, education, and occupation. This is useful for companies that sell products or services that are affected by demographic factors such as age or income.
Psychographic Segmentation: This type of segmentation divides the market based on psychographic factors such as lifestyle, personality, values, and interests. This is useful for companies that sell products or services that are affected by psychographic factors such as lifestyle or personality.
Behaviouristic Segmentation: This type of segmentation divides the market based on consumer behavior such as usage rate, brand loyalty, and benefits sought. This is useful for companies that sell products or services that are affected by consumer behavior such as usage rate or brand loyalty.
Consumer psychology is the study of how people think, feel, and behave when making decisions about purchasing products or services. It involves understanding the factors that influence consumer behavior, including motivation, perception, emotions, and attitudes.
Buying behavior refers to the decision process and actions of consumers in purchasing products or services. It includes the stages of the buying process such as problem recognition, information search, evaluation of alternatives, purchase, and post-purchase evaluation.
Consumer psychology plays a critical role in understanding buying behavior as it helps to explain why consumers make certain purchasing decisions. For example, a consumer's motivation to purchase a product may be driven by a need for status or social acceptance, which can be influenced by factors such as advertising or peer pressure. Understanding consumer psychology allows companies to develop marketing strategies that effectively appeal to the desires, needs, and emotions of their target market.
Consumer behavior is also influenced by external factors such as cultural, social, personal and psychological factors. Consumer psychology allows companies to understand how these factors play a role in shaping consumer behavior and how they can leverage these factors to influence consumer behavior in their favor.
Overall, Consumer psychology and buying behavior are interrelated and understanding both can help companies to effectively target and persuade potential customers to purchase their products or services.
five roles people might play in a buying decision process
Initiator : who first gives the idea of buying the product or service.
Influencer : whose view or advice influences the decision.
Decider : who decide on any component of buying decision.
Buyer : who makes the actual purchase.
User : who uses the product or service purchased.
The Consumer Buying Decision Process is the series of steps that a consumer goes through when making a purchase decision. It includes the following five stages:
Need recognition / Problem recognition: This is the stage at which the consumer realizes that they have a need or problem that needs to be solved. It could be a need for a new product or service, or a problem that needs to be fixed. This stage is often triggered by an internal or external stimulus such as an advertisement, a change in lifestyle or a personal experience.
Information search: Once the need or problem is recognized, the consumer begins to search for information to help them evaluate potential solutions. This could include conducting online research, talking to friends and family, or visiting stores to gather information about products or services.
Evaluation of alternatives: After gathering information, the consumer evaluates the different options available to them and compares the features and benefits of each alternative. They also consider their own personal criteria, such as budget, brand loyalty and personal taste.
Purchase decision: After evaluating the alternatives, the consumer makes a decision to purchase a specific product or service. This decision is influenced by various factors such as price, brand reputation, and the consumer's own personal values.
Post-purchase behavior: After the purchase is made, the consumer evaluates the satisfaction of their purchase. They may decide to continue to purchase the product or service, or switch to a different brand. This stage is also known as customer loyalty, where customer are more likely to continue purchasing from the brand if they are satisfied with their purchase.
Marketing strategies are the plans and actions that a company takes to reach and persuade potential customers to purchase its products or services. They involve identifying target customers, understanding their needs and desires, and developing a unique value proposition to differentiate the company's offerings from those of its competitors. Marketing strategies also include creating a marketing mix (product, price, place, promotion) to effectively reach and persuade the target market.
The importance of marketing strategies lies in their ability to help companies achieve their business goals. Without a well-defined marketing strategy, a company may struggle to effectively reach and persuade its target customers, resulting in poor sales and limited growth. A good marketing strategy can help a company to:
Understand the needs and desires of target customers
Differentiate its products or services from those of its competitors
Effectively reach and persuade potential customers
Increase brand awareness and loyalty
Drive sales and revenue
Identify and capitalize on growth opportunities
Marketing strategies are also crucial to adapt to the ever-changing business environment, by understanding the market trends, consumer behavior, and competitor's activities. Having a flexible marketing strategy allows companies to adjust their approach as needed to stay competitive and meet the needs of the target market.
Cause Marketing: This type of marketing involves aligning a company's brand or product with a social or environmental cause in order to appeal to consumers who are socially conscious and want to support a good cause. It is a mutually beneficial strategy as it helps companies to promote their brand while also promoting a cause they believe in.
Viral Marketing: This type of marketing uses social media and other online platforms to create a buzz around a product or service. It relies on word-of-mouth and the sharing of content to quickly spread information about the product or service, creating a viral effect.
Green Marketing: This type of marketing promotes environmentally friendly products and practices. It aims to appeal to consumers who are interested in reducing their impact on the environment and are willing to pay a premium for products that are environmentally friendly.
Diversity Marketing: This type of marketing targets specific demographic groups, such as ethnic minorities or LGBT communities. The purpose is to create a tailored message that resonates with the target group and create a positive image of the brand.
Mass Marketing: This type of marketing aims to reach a large, diverse audience with a general message. It is often used for products or services that have a wide appeal and don't require a specific targeting.
Seasonal Marketing: This type of marketing focuses on seasonal events, holidays, or weather patterns to promote products or services. The goal is to capitalize on the timing of the event or season and create a sense of urgency or relevance to consumers.
Public Relations Marketing: This type of marketing focuses on building and maintaining a positive image for the brand or company through public relations efforts such as press releases, media events, and crisis management.
Offline Marketing: This type of marketing refers to traditional marketing methods that do not involve the internet or digital platforms. Examples include television, radio, print, and billboards.
Digital Marketing: This type of marketing uses digital platforms such as the internet, social media, and mobile devices to reach and engage with customers. It includes tactics such as search engine optimization, content marketing, and email marketing.
