MARKET SEGMENTS AND CONSUMER BEHAVIOR
 The way that we perceive, react, or are affected by
Business Market
 in simple words is business to business market
wherein the products or services of a particular
organization are sold to or purchased by other
organizations or businesses. It also happens in
support industries where the products that are
manufactured are components required to be
assembled into the products or services offered by
some other business organizations.
 is defined as the selling of products and services to
other businesses to be resold or used to make other
items or services for sale
A. Marketing to B2B ( Business-to- Business)
 When you are marketing to a B2B you want to focus
on the logic of the product.
 You do this by focusing on the features of the
product. There is little to no personal emotion
involved in the purchasing decision.
 You want to focus on understanding the
organizational buyers and how they operate within
the confines of their organization's procedures.
 Refers to the marketing of products or services to
other businesses and organizations.
B. Marketing to B2C ( Business- to- Consumer )
 When you are marketing to a consumer you want to
focus on the benefits of the product.
 Their decision is more emotional. Consumers are
different in that they demand a variety of
distribution channels for convenience, not so with
the B2B market.
 Consumers are less likely to be interested in a
lengthy marketing message. They will want you to
get right to the point. Consumers don't want to work
to understand your benefits, instead, they will want
you to clearly point out the benefits to them.
 With consumers, your message must be simple,
easy to understand.
Consumer Market - refers to a market wherein the
seller sells the product for a primary reason of making
profits while buyer buys the products for personal use.
What are the major differences between the two?
 In consumer market the purchase might even be
made when the products are not required in day to
day activities. But in business market the business has
to buy to stay profitable.
 The business buyer is sophisticated in terms of the
process involved in buying, decision making while on
the other hand the consumer in the consumer market
might not be as sophisticated.
 The business buyer is an information-seeker,
constantly on the lookout for information and advice.
On the other hand the consumer only searches
information when he is required to make a decision.
Factors that Affect Consumer Behavior
products and services is a function of a host of facts.
Factors that tend to have an effect on consumer
behavior
1. CULTURE - This refers to the general or overall
culture of a group of people.
Note: This results to distinct market segments that may
even manifest distinct tastes and preferences for
products and services.
2. SOCIAL FACTORS
 reference groups, family, roles, and status. This is all
about the norms of behavior among even smaller
groups, namely the social groups where a consumer
belong to.
 all of these affect market’s behavior in terms of
deciding on what they should wear, what they should
eat , who to aspire to be like, where to go, and more.
3. PERSONAL FACTORS -age, life cycle stage,
occupation, and economic circumstances.
Note: The taste and preferences of younger people will
be different from that of more senior individuals.
 Disposable income defines what people can and
cannot buy, while physical location limits access to
services.
4. PSYCHOLOGICAL FACTORS - motivation,
perception, learning, beliefs, and attitudes. This is
how the individual behaves and behavior is very
intimate thing.
- It is the result of how we are raised, who we
interact with, what our histories are and much more.
Note: Culture, for one, can heavily affect product design
and marketing. Often, because we believe so strongly in
the wisdom of our “crowd,” we do not even bother to
step back to assess whether or not our beliefs are in fact
sound.
-In South Korea, there is a very pervasive belief that
leaving an electric fan running with the windows all shut
can cause serious physical harm or death. Even with the
absence of scientific proof to verify this and with the rest
of the world not believing this, South Koreans are so
convinced of this fact that electric fans must
have auto shut-off timers on then or else they will not
be sellable. (McRaney 2013)

Income Vs. Socio Economic Class
a. Income –personal demographic factor
-It is a factual number. It answers the question of “How
much do you earn?” or more commonly among
researchers, “How much is your household family
income?"
b. Socio-economic Class (SEC) - is an indicator of the
kind of group that a consumer feels he or she belongs
to.
 It is a social factor in the sense that it reflects the
consumption reality that the individual strongly
believes in.
For instance, those who belong to the country’s upper
socio-economic classes may firmly believe that having a
car is a non-negotiable necessity. But those who belong
to lower income classes, this not the reality that they
see. Instead, a car is perceived to be a luxury.
Age VS. Lifecycle - Age is just a number, where
consumers currently are in their life cycles pretty much
determine what products and services they will likely
spend to.
The following are the generally accepted lifecycle
stages:
A. Bachelor Stage- young, single and independent
B. Newly Married Couples- young, no children, also
known as DINKS (Double Income, NO KIDS)
C. Full Nest I –families with children, youngest child
below six years.
D. Full Nest II –families with children, youngest child
six years or older.
E. Full Nest III -families with dependent children.
F. Empty Nest I –older married couples, no children
living with them.
G. Empty Nest II - Older married couples, retired, and
no children living with them.
H. Solitary Survivor I –older, no family, and
supporting self
I. Solitary Survivor II- older, no family, and retired.
For instance, Bachelors will likely spend a lot on personal
effects such as portable electronic devices and
clothes. Newly married couples will tend to spend a lot on
furnishing their homes, dining out, and for travel. Both
once they evolved into a full nest, they will tend to
prioritize spending for the children, such as clothing,
education, and cut spending on items that they used to
buy. Meanwhile, the Empty Nest Stage typically sees the
couple suddenly flushed with newly disposable income
because they are no longer supporting their children and
this leads to resurgence in
personal spending.
Buying Roles in the Buying Process
1. Initiator. This is the person who first suggests the
idea of buying a particular product or service.
2. Influencers. These people’s views or advices can
influence the eventual selection of what to buy.
3. Decider. The person (or persons ) who ultimately
has the final say on what to buy.
4. Buyer. The person who makes the actual purchase.
5. Users. The person or persons who end up actually
using the product.
-Note: The roles become more pronounced as
purchases become more complex and risky.
Types of Buying Behavior
 When consumers are motivated they can now
proceed to engage in a number of behaviors that
may deem necessary in order to achieve their
goals:
1. information gathering
2. information processing
3. generating conclusions about the products.
Note: The level of motivation, however, will vary
depending on how the consumer relates with the object
of involvement or the product being sought.
Classification of buying behavior:
A. Consumer’s Perception of the Product Category
-consumer can perceive a product category to be simple,
complex or somewhere in between.
B. Consumer’s attitude toward the product
-is the product expensive, very important, or durable in
nature? (High-effort or low effort behavior)
1. Complex Buying Behavior
 It arises for important purchases where there are so
many different features and attributes with each
brand having different manifestation of each
feature.
 The consumer is cognizant of these differences.
 The consumer undertakes a lot of searching and
analyzing before making any purchases.
Ex. Car, houses, durable goods etc.
2. Dissonance Reducing Behavior
 It occurs when a consumer wants to keep life
simple, and yet the risks faced with the buying
decision for an important purchase are perceived to
be high.
 The consumer may therefore resort to decisions that
simplify life, such as buying the brand that most
people choose, relying on the decision of a trusted
friend, or relying on the word of salespersons.
 This is why appliances and consumer electronics, for
instance, benefit greatly from having popular
brands. Many household appliances tend to be
bought this way.

3.Variety-seeking behavior
 It occurs when the product involves minimal risks,
but there are so many choices, each with its own
features and attributes.
 The consumer may opt to try each product at least
once, leading to trying of a wide variety of products.
 This is how consumers may likely to respond when
faced by the huge breadth of offerings for instance,
snack foods in groceries. This is also what leads
“foodies” to try different restaurants on different
dates.

4. Habitual Buying Behavior

 It happens when consumers feel that learning about
the different competing products is not worth it, so
they would rather select the product that they are
most comfortable with.
 This is the outcome that is hoped for by many fast
moving consumer goods, such as personal care
products, that seek to make consumers buy their
products out of habit.

Emotional VS. Logical Decisions

-Two brains:

1. Emotional Driven - inherited from our ancestors

and it is highly attuned to our sensory experiences.
2. Logical Brain - rational, very objective, and with
which we hope and assume manages to control all of
our decision-making.