Marketing Consider As Nonprofit Organization / Importance Of Marketing Can Be Studied As Follows:

(1) Marketing Helps in Transfer, Exchange and Movement of Goods:

Marketing is very helpful in transfer, exchange and movement of goods. Goods and services are made
available to customers through various intermediaries viz., wholesalers and retailers etc. Marketing is
helpful to both producers and consumers.
To the former, it tells about the specific needs and preferences of consumers and to the latter about the
products that manufacturers can offer. According to Prof. Haney Hansen Marketing involves the design
of the products acceptable to the consumers and the conduct of those activities which facilitate the transfer
of ownership between seller and buyer.
(2) Marketing Is Helpful In Raising And Maintaining The Standard Of Living Of The Community:

Marketing is above all the giving of a standard of living to the community. Paul Mazur states, Marketing
is the delivery of standard of living. Professor Malcolm McNair has further added that Marketing is the
creation and delivery of standard of living to the society.
By making available the uninterrupted supply of goods and services to consumers at a reasonable price,
marketing has played an important role in raising and maintaining living standards of the community.
Community comprises of three classes of people i.e., rich, middle and poor. Everything which is used by
these different classes of people is supplied by marketing.
In the modern times, with the emergence of latest marketing techniques even the poorer sections of society
have attained a reasonable level of living standard. This is basically due to large scale production and
lesser prices of commodities and services. Marketing has infact, revolutionised and modernised the living
standard of people in modern times.
(3) Marketing Creates Employment:

Marketing is complex mechanism involving many people in one form or the other. The major marketing
functions are buying, selling, financing, transport, warehousing, risk bearing and standardization, etc. In
each such function different activities are performed by a large number of individuals and bodies.
Thus, marketing gives employment to many people. It is estimated that about 40% of total population is
directly or indirectly dependent upon marketing. In the modern era of large scale production and
industrialization, role of marketing has widened.
This enlarged role of marketing has created many employment opportunities for people. Converse, Huegy
and Mitchell have rightly pointed out that In order to have continuous production, there must be
continuous marketing, only then employment can be sustained and high level of business activity can be
continued.
(4) Marketing as a Source of Income and Revenue:

The performance of marketing function is all important, because it is the only way through which the
concern could generate revenue or income and bring in profits. Any activity connected with obtaining
income is a marketing action. It is all too easy for the accountant, engineer, etc., to operate under the broad
assumption that the Company will realise many dollars in total sales volume.
However, someone must actually go into the market place and obtain dollars from society in order to
sustain the activities of the company, because without these funds the organisation will perish.
Marketing does provide many opportunities to earn profits in the process of buying and selling the goods,
by creating time, place and possession utilities. This income and profit are reinvested in the concern,
thereby earning more profits in future. Marketing should be given the greatest importance, since the
very survival of the firm depends on the effectiveness of the marketing function.
(5) Marketing Acts as a Basis for Making Decisions:

A businessman is confronted with many problems in the form of what, how, when, how much and for
whom to produce? In the past problems was less on account of local markets. There was a direct link
between producer and consumer.
In modern times marketing has become a very complex and tedious task. Marketing has emerged as new
specialised activity along with production.
As a result, producers are depending largely on the mechanism of marketing, to decide what to produce
and sell. With the help of marketing techniques a producer can regulate his production accordingly.
(6) Marketing Acts as a Source of New Ideas:
The concept of marketing is a dynamic concept. It has changed altogether with the passage of time. Such
changes have far reaching effects on production and distribution. With the rapid change in tastes and
preference of people, marketing has to come up with the same.
Marketing as an instrument of measurement, gives scope for understanding this new demand pattern and
thereby produce and make available the goods accordingly.
(7) Marketing Is Helpful In Development Of An Economy:
Adam Smith has remarked that nothing happens in our country until somebody sells something.
Marketing is the kingpin that sets the economy revolving. The marketing organisation, more scientifically
organised, makes the economy strong and stable, the lesser the stress on the marketing function, the
weaker will be the economy.
5. What is marketing environment? How does it helps in marketing management decision making
process?
The market environment is a marketing term and refers to factors and forces that affect a firm's ability
to build and maintain successful relationships with customers. Three levels of the environment are 3:
Micro (internal) environment - small forces within the company that affect its ability to serve its
customers.

According to Philip Kotler, A companys marketing environment consists of the internal factors &
forces, which affect the companys ability to develop & maintain successful transactions & relationships
with the companys target customers.
MARKETING ENVIRONMENT AFFECT MARKETING DECISION-MAKING
A marketing environment contains the elements that influence how businesses and individuals buy and
sell products and services. These elements may vary by location, industry, product and market, but they
usually include social influences, such as demographics and culture; economics; and political and
legislative trends. Businesses try to anticipate trends and changes in the marketing environment to
establish positions in new markets, withdraw from shrinking markets and introduce new products and
services to emerging markets. Businesses that fail to adapt to changes in the marketing environment often
struggle to compete effectively. It helps in taking decision regarding factors affecting the marketing
environment. These are
The Environmental Factors may be classified as:
1. Internal Factor
2. External Factor
External Factors may be further classified into:
External Micro Factors & External Macro Factors
Companys Internal Environmental Factors:
A Companys marketing system is influenced by its capabilities regarding production, financial & other
factors. Hence, the marketing management/manager must take into consideration these departments before
finalizing marketing decisions. The Research & Development Department, the Personnel Department, the
Accounting Department also have an impact on the Marketing Department. It is the responsibility of a
manager to company-ordinate all department by setting up unified objectives.
External Micro Factors:
1. Suppliers: They are the people who provide necessary resources needed to produce goods & services.
Policies of the suppliers have a significant influence over the marketing managers decisions because,
it is laborers, etc. A company must build cordial & long-term relationship with suppliers.
2. Marketing Intermediaries: They are the people who assist the flow of products from the producers to
the consumers; they include wholesalers, retailers, agents, etc. These people create place & time
utility. A company must select an effective chain of middlemen, so as to make the goods reach the
market in time. The middlemen give necessary information to the manufacturers about the market. If a
company does not satisfy the middlemen, they neglect its products & may push the competitors
product.
3. Consumers: The main aim of production is to meet the demands of the consumers. Hence, the
consumers are the center point of all marketing activities. If they are not taken into consideration,
before taking the decisions, the company is bound to fail in achieving its objectives. A companys
marketing strategy is influenced by its target consumer. Eg: If a manufacturer wants to sell to the
wholesaler, he may directly sell to them, if he wants to sell to another manufacturer, he may sell
through his agent or if he wants to sell to ultimate consumer he may sell through wholesalers or
retailers. Hence each type of consumer has a unique feature, which influences a companys marketing
decision.
4. Competitors: A prudent marketing manager has to be in constant touch regarding the information
relating to the competitors strategies. He has to identify his competitors strategies, build his plans to
overtake them in the market to attract competitors consumers towards his products.
Any company faces three types of competition:

a) Brand Competition: It is a competition between various companies producing similar products.

Eg: The competition between BPL & Videcon companies.
b) The Product Form Competition: It is a competition between companies manufacturing products,
which are substitutes to each other Eg: Competition between coffee & Tea.
c) The Desire Competition: It is the competition with all other companies to attract consumers
towards the company. Eg: The competition between the manufacturers of TV sets & all other
companies manufacturing various products like automobiles, washing machines, etc.
5. Public: A Companys obligation is not only to meet the requirements of its customers, but also to
satisfy the various groups. A public is defined as any group that has an actual or potential ability to
achieve its objectives. The significance of the influence of the public on the company can be
understood by the fact that almost all companies maintain a public relation department. A positive
interaction with the public increase its goodwill irrespective of the nature of the public. A company has
to maintain cordial relation with all groups, public may or may not be interested in the company, but
the company must be interested in the views of the public.
Public may be various types. They are:
a. Press: This is one of the most important group, which may make or break a company. It includes
journalists, radio, television, etc. Press people are often referred to as unwelcome public. A
marketing manager must always strive to get a positive coverage from the press people.
b. Financial Public: These are the institutions, which supply money to the company. Eg: Banks,
insurance companies, stock exchange, etc. A company cannot work without the assistance of these
institutions. It has to give necessary information to these public whenever demanded to ensure that
timely finance is supplied.
c. Government: Politicians often interfere in the business for the welfare of the society & for other
reasons. A prudent manager has to maintain good relation with all politicians irrespective of their
party affiliations. If any law is to be passed, which is against the interest of the company, he may
get their support to stop that law from being passed in the parliament or legislature.
d. General Public: This includes organisations such as consumer councils, environmentalists, etc. as
the present day concept of marketing deals with social welfare, a company must satisfy these
groups to be successful.
External Macro Environment: These are the factors/forces on which the company has no control.
Hence, it has to frame its policies within the limits set by these forces:
1. Demography: It is defined as the statistical study of the human population & its distribution. This is
one of the most influencing factors because it deals with the people who form the market. A company
should study the population, its distribution, age composition, etc before deciding the marketing
strategies. Each group of population behaves differently depending upon various factors such as age,
status, etc. if these factors are considered, a company can produce only those products which suits the
requirement of the consumers. In this regard, it is said that to understand the market you must
understand its demography.
2. Economic Environment: A company can successfully sell its products only when people have enough
money to spend. The economic environment affects a consumers purchasing behavior either by
increasing his disposable income or by reducing it. Eg: During the time of inflation, the value of
money comes down. Hence, it is difficult for them to purchase more products. Income of the consumer
must also be taken into account. Eg: In a market where both husband & wife work, their purchasing
power will be more. Hence, companies may sell their products quite easily.
3. Physical Environment or Natural Forces: A company has to adopt its policies within the limits set
by nature. A man can improve the nature but cannot find an alternative for it.
Nature offers resources, but in a limited manner. A product manager utilizes it efficiently. Companies
must find the best combination of production for the sake of efficient utilization of the available
resources. Otherwise, they may face acute shortage of resources. Eg: Petroleum products, power,
water, etc.

4. Technological Factors: From customers point of view, improvement in technology means

improvement in the standard of living. In this regard, it is said that Technologies shape a Persons
Life.
Every new invention builds a new market & a new group of customers. A new technology improves
our lifestyle & at the same time creates many problems. Eg: Invention of various consumer comforts
like washing machines, mixers, etc have resulted in improving our lifestyle but it has created severe
problems like power shortage.
Eg: Introduction to automobiles has improved transportation but it has resulted in the problems like air
& noise pollution, increased accidents, etc. In simple words, following are the impacts of
technological factors on the market: a. They create new wants b. They create new industries c. They
may destroy old industries d. They may increase the cost of Research & Development.
5. Social & Cultural Factors: Most of us purchase because of the influence of social & cultural factors.
The lifestyle, values, believes, etc are determined among other things by the society in which we live.
Each society has its own culture. Culture is a combination of various factors which are transferred
from older generations & which are acquired. Our behavior is guided by our culture, family,
educational institutions, languages, etc.
E.g.: In India, we have different cultural groups such as Assamese, Punjabis, Kashmiris, etc. The
marketing manager should take note of these differences before finalizing the marketing strategies.
Culture changes over a period of time. He must try to anticipate the changes new marketing
opportunities.

UNIT-2

1. What is consumer behavior? What is the use of consumer decision making process?
Consumer behavior refers to the selection, purchase and consumption of goods and services for the
satisfaction of their wants.
According to Engel, Blackwell consumer behavior -Those actions directly involved in obtaining,
consuming and disposing of products and services including the decision processes that precede and
follow these actions. The American Marketing Association has defined consumer behavior as, The dynamic interaction of
affect and cognition, behavior, and the environment by which human beings conduct the exchange aspects
of their lives.
PURCHASE DECISION PROCESS
Initially the consumer tries to find what commodities he would like to consume, then he selects only
those commodities that promise greater utility. After selecting the commodities, the consumer makes an
estimate of the available money which he can spend. Lastly, the consumer analyzes the prevailing prices
of commodities and takes the decision about the commodities he should consume. The purchase
decision process is the stages a buyer passes through in making choices about which products and
services to buy. : Three components of purchase decision process: Input, Process and Output.
1. Input: The input component of consumer decision-making model comprises of marketing-mix
activities and socio-cultural influences.
2. Process-: The process component of model is concerned with how consumer makes decisions. This
involves understanding of the influences of psychological factors on consumer behaviors. The process
component of a consumer decision-making model consists of three stages: Need recognition,
3. Output: The output component of the consumer decision-making model concerns two more stages of
purchase process activity: Purchase behavior and post-purchase behavior.

Consumer Buying Decision Process

1.
2.
3.
4.
5.

Need Recognition
Information Search
Evaluation of Alternatives
Purchase Behaviour
Post-Purchaser Evaluation

1. Need Recognition-: The need recognition is the

first and most important step in the buying
process. If there is no need, there is no purchase. This recognition happens when there is a lag between
the consumers actual situation and the ideal and desired one.
The recognition of need its likely to occur when a consumer is faced with a problem, and if the problem
is not solved or need satisfied, the consumer builds up tension. Example: A need for a cooking gas for
busy house wife. The needs can be triggered by internal (hunger, thirst, sex) and external stimuli
(neighbors new Car or TV). The marketers need is to identify the circumstance that trigger the
particular need or interest in consumers. The marketers should reach consumers to find out what kinds
of felt needs or problem arose, what brought them about how they led to this particular product.
2. Information Search-: The consumer will search for required information about the product to make a
right choice. How much search he undertakes depends upon the strength of his drive, the amount of
information he initially has, the ease of obtaining additional information, the value he places on
additional information and the satisfaction he gets from search.
The following are the sources of consumer information:
Personal Sources :
Family, friends, neighbors, past experience.
Commercial Sources :
Advertising, sales people, dealers, displays
Public Sources
:
Mass media, consumer welfare organization.
Then the consumer will seek to make his opinion to guide his choice and his decision-making process
with:
Internal information: this information is already present in the consumers memory. It comes from
previous experiences he had with a product or brand and the opinion he may have of the brand.
Internal information is sufficient for the purchasing of everyday products that the consumer knows
including Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods (CPG). But
when it comes to a major purchase with a level of uncertainty or stronger involvement and the
consumer does not have enough information, he must turns to another source:
External information: This is information on a product or brand received from and obtained by
friends or family, by reviews from other consumers or from the press. Not to mention, of course,
official business sources such as an advertising or a sellers speech.
During his decision-making process and his Consumer Buying Decision Process, the consumer
will pay more attention to his internal information and the information from friends, family or
other consumers. It will be judged more objective than these from advertising, a sellers speech
or a commercial brochure of the product.
3. Evaluation of Alternatives-: Once the information collected, the consumer will be able to evaluate
the different alternatives that offer to him, evaluate the most suitable according to his needs and
choose the one he think its best for him. In order to do so, he will evaluate their attributes on two

aspects. The objective characteristics (such as the features and functionality of the product) but also
subjective (perception and perceived value of the brand by the consumer or its reputation).
The higher the level of involvement of the consumer and the importance of the purchase are stronger,
the higher the number of solutions the consumer will consider will be important. The criteria used by
the consumers in evaluating the brands are usually expressed in terms of product attributes that are
important to them. The attributes of interest to buyers in some familiar products are:
Two-wheeler : Fuel economy, pulling capacity, price
Computers
: Memory capacity, graphic capability, software availability
Mouthwash
: Colour, effectiveness, germ-killing, capacity, price, taste/ flavor
Consumers will pay the most attention to those attributes that are concerned with their needs.
4. Purchase Behaviour-: Now that the consumer has evaluated the different solutions and products
available for respond to his need, he will be able to choose the product or brand that seems most
appropriate to his needs. Then proceed to the actual purchase itself. His decision will depend on the
information and the selection made in the previous step based on the perceived value, products
features and capabilities that are important to him.
Consumers make two types of purchases trial purchases and repeat purchases. If the product is
found satisfactory during trial, consumers are likely to repeat the purchase. Repeat purchase behavior
is closely related to the concept of brand loyalty. For certain products such as washing machine or
refrigerator, trial is not feasible and the consumer usually moves directly from evaluation to actual
purchase. A consumer who decides to purchase will make brand decision, quantity decision, dealer
decision, timing decision and payment method decision.
5. Post-purchase behavior-: Once the product is purchased and used, the consumer will evaluate the
adequacy with his original needs (those who caused the buying behavior). And whether he has made
the right choice in buying this product or not. He will feel either a sense of satisfaction for the product
(and the choice). Or, on the contrary, it leads to disappointment if the product has fallen far short of
expectations.
The post-purchase evaluation may have important consequences for a brand. A satisfied customer is
very likely to become a loyal and regular customer. Especially for everyday purchases with low level
of involvement such as Fast-Moving Consumer Goods (FMCG) or Consumer Packaged Goods
(CPG). A loyalty which is a major source of revenue for the brand when you combine all purchases
made by customer throughout his entire life (called lifetime customer value).
Example-: Purchase Decision Process Activities of Car

Problem Recognition
Stage
Information
Stage

Need for a New Car

Search
Information Collection
about the Cars

Alternative
Evaluation Stage

Purchase
Stage

Decision

Criteria for Selection

Price
Colour and appearance
Kilometers per litre
Expert opinion
Buy
Do not buy

What Type of Car

Economy
Deluxe version
Luxury versions
Now
Later

Which Car

Model A
Model B
Model C

Where to Purchase

Dealer A
Dealer B

How to Finance

Degree of Satisfaction

Automobile magazines
Automobile companies
Promotion literature and
advertisements friends
and family

Purchase Decision

Timing of Purchase

Other Decisions

Yes
No

Satisfied
dissatisfied

Own funds
Loan able funds

2. How does marketing segmentation helps in marketing planning? Explain the steps in
Market Segmentation?
Market segmentation is the process of dividing consumers or customers into groups with similar needs and
wants. Marketing relies heavily on segmentation because different groups of consumers have different
needs. Once the market is segmented, the firm then decides which segments to target. Market
segmentation allows for a better allocation of a firms finite resources. Due to limited resources, a firm
must make choices in servicing specific groups of consumers. With growing diversity in the tastes of
modern consumers, firms are realizing the benefit of servicing a multiplicity of new markets.

Market segmentation means dividing the total market for a product into different parts i.e segments on
certain bases and using each segment fully for the purpose of marketing and sales promotion. Due to
segmentation, each segment will have uniform features and suitable marketing mix can be introduced for
promoting sales in each segment.
1. According to Philip Kotler, market segmentation means "the act of dividing a market into distinct
groups of buyers who might require separate products and/or marketing mixes."
2. According to William J. Stanton, "Market segmentation in the process of dividing the total
heterogeneous market for a good or service into several segments. Each of which tends to be
homogeneous in all significant aspects."
IMPORTANCE OF MARKETING SEGMENTATION IN MARKETING PLANNING
1. Facilitates consumer-oriented marketing: Market segmentation facilitates formation of marketingmix which is more specific and useful for achieving marketing objectives. Segment-wise approach is
better and effective as compared to integrated approach for the whole market.
2. Facilitates introduction of suitable marketing mix: Market segmentation enables a producer to
understand the needs of consumers, their behavior and expectations as information is collected
segment-wise in an accurate manner. Such information is purposefully usable. Decisions regarding
Four Ps based on such information are always effective and beneficial to consumers and the producers.
3. Facilitates the selection of promising markets: Market segmentation facilitates the identification of
those sub-markets which can be served best with limited resources by the firm. A firm can concentrate
efforts on most productive/ profitable segments of the total market due to segmentation technique.
Thus market segmentation facilitates the selection of the most suitable market.
4. Facilitates exploitation of better marketing opportunities: Market segmentation helps to identify
promising market opportunities. It helps the marketing man to distinguish one customer group from

another within a given market. This enables him to decide his target market. It also enables the
marketer to utilize the available marketing resources effectively as the exact target group is identified
at the initial stage only.
5. Facilitates selection of proper marketing programme: Market segmentation helps the marketing
man to develop his marketing mix programme on a reliable base as adequate information about the
needs of consumers in the target market is available. The buyers are introduced to marketing
programme which is as per their needs and expectations.
6. Provides proper direction to marketing efforts: Market segmentation is rightly described as the
strategy of "dividing the markets in order to conquer them". Due to segmentation, a firm can avoid the
markets which are unprofitable and irrelevant for its marketing purpose and concentrate on certain
promising segments only. Thus due to market segmentation, marketing efforts are given one clear
direction for achieving marketing objectives.
7. Facilitates effective advertising: Advertising media can be more effectively used because only the
media that reach the segments can be employed. It makes advertising result oriented.
8. Provides special benefits to small firms: Market segmentation offers special benefits to small firms.
The resources available with them are limited as they are comparatively new in the market. Such firms
can select only suitable market segment and concentrate all efforts within that segment only for better
marketing performance. Such firms can compete even with large firms by offering personal services to
customers within the segment selected.
9. Facilitates optimum use of resources: Market segmentation facilitates efficient use of available
resources. It enables a marketing firm to use its marketing resources in the most efficient manner in the
selected target market. The marketing firm selects the most promising market segment and
concentrates all attention on that segment only. This offers best results to the firm in terms of sale,
profit and consumer support as compared to the results available from spending such resources on the
total market.
STEPS IN MARKET SEGMENTATION

1. Step One Define the market-: In the first step in this more detailed model is to clearly define the
market that the firm is interested in. This may sound relatively straightforward but it is an important
consideration. For example, when Coca-Cola looks at market segmentation they would be unlikely to
look at the beverage market overall. Instead they would look at what is known as a sub-market (a more
product-market definition). A possible market definition that Coca-Cola could use might be diet cola
soft drinks in South America. It is this more precise market definition that is segmented, not the overall
beverage market, as it is far too generic and has too many diverse market segments.
2. Step Two Create market segments-: Once the market has been defined, the next step is to segment
the market, using a variety of different segmentation bases/variables in order to construct groups of

consumer. In other words, allocate the consumers in the defined market to similar groups (based on
market needs, behavior or other characteristics).
3. Step Three Evaluate the segments for
viability-: After market segments have been
developed they are then evaluated using a set
criteria to ensure that they are useable and
logical. This requires the segments to be
assessed against a checklist of factors, such as:
are the segments reachable, do they have
different groups of needs, are they large enough,
and so on.
4. Step Four Construct segment profiles-: Once viable market segments have been determined,
segment profiles are then developed. Segment profiles are detailed descriptions of the consumers in
the segments describing their needs, behaviors, preferences, demographics, shopping styles, and so
on. Often a segment is given a descriptive nickname by the organization. This is much in the same way
that the age cohorts of Baby Boomers, Generation X and Generation Y have a name.
5. Step Five Evaluate the attractiveness of each segment-: Available market data and consumer
research findings are then are added to the description of the segments (the profiles), such as segment
size, growth rates, price sensitivity, brand loyalty, and so on. Using this combined information, the
firm will then evaluate each market segment on its overall attractiveness. Some form of scoring model
will probably be used for this task, resulting in numerical and qualitative scores for each market
segment.
6. Step Six Select target market/s-: With detailed information on each of the segments now available,
the firm then decides which ones are the most appropriate ones to be selected as target markets. There
are many factors to consider when choosing a target market. These factors include: firms strategy, the
attractiveness of the segment, the competitive rivalry of the segment, the firms ability to successfully
compete and so on.
7. Step Seven Develop positioning strategy-: The next step is to work out how to best compete in the
selected target market. Firms need to identify how to position their products/brands in the target
market. As it is likely that there are already competitive offerings in the market, the firm needs to work
out how they can win market share from established players. Typically this is achieved by being
perceived by consumers as being different, unique, superior, or as providing greater value.
8. Step Eight Develop and implement the marketing mix-: Once a positioning strategy has been
developed, the firm moves to implementation. This is the development of a marketing mix that will
support the positioning in the marketplace. This requires suitable products need to be designed and
developed, at a suitable price, with suitable distribution channels, and an effective promotional
program.

9. Step Nine Review performance-: After a period of time, and on a regular basis, the firm needs to
revisit the performance of various products and may review their segmentation process in order to
reassess their view of the market and to look for new opportunities.

3. What are the different bases of market segmentation? What bases you adopt in
segmenting following products A. Edible Oil B. Cosmetic C. Marketing of Books
BASES OF MARKET SEGMENTATION.
There are several ways or methods to segment a market. Such ways or methods depend upon consumer
characteristics and their responses to the products or services.
A paradigm shift has taken place in the way the Indian corporate (is) viewing customers. There has been a
shift from organizing by-products to organizing by-market segments. For example, Maruti is segmenting
is customers on the basis of economic and premium class, which was not done previously.

I. GEOGRAPHIC SEGMENTATION:
In geographic segmentation, the market is sub divided on the basis of area.
Region: Regional segmentation is made because regional differences exist in respect of demand for
products. For example, buyers from south India are different from the buyers in north.
Urban / Rural: There are differences in buying behaviour of urban and rural customers. Accordingly,
marketing strategies must be designed depending upon their likes, dislikes, moods, preferences, fashions
and buying habits.
Locality: Consumers buying behaviour is also reflected by the locality within a particular city. For
instance, there are differences in terms of buying patterns of people residing at Parel and Parle, within a
city like Mumbai.

II. DEMOGRAPHIC SEGMENTATION:

Demography refers to study4about the different aspects of population. Markets can be divided on
demographic factors like age, gender, education etc. The various demographic factors are
a. Age: The primary method of analysing markets by age is to divide the total population into age groups
and analyze the wants and needs of each group.

Age: It is essentially a case of age based segmentation of a market. Example:

Amul has segmented his product in different age group
For kids: Amul kool, chocolate milk, Nutramul energy drink.
For Youth: Amul cool kafe.

For womens and older people: Amul calci+, Amul Shakti energy drink.
b. Gender: Marketers devote much attention to male and female differences in purchasing. Today,
marketers segment female groups into college girls, working women, housewives, etc. Again, male
groups can be further classified.
Women tend to be slower to make decisions and exhibit greater uncertainty about
their decisions. And, they are also more persuadable. Example: Adidas targets
women in India
German shoe maker Adidas is trying to develop the women segment in India for its
products.
Emami segmented its product in gender: Womens: Naturally fair
Men: Fair and handsome

Purchasing capacity: In the segmentation context of several elements of

demographic, purchasing capacity is perhaps the most significant one. Buyers
preferred price range is often related to purchasing capacity. Example: Nokia- It
deals with wild variety and wild range. Nokia 2600 price Rs.2750

c. Income: Buying patterns depends on income of the consumers. No two individuals or families spend
money in exactly the same way. If a researcher knows a persons income, he can predict with some
accuracy wants and needs of that person and how those wants are likely to be satisfied

Example -:Budget car segment- It is the largest segment in Indian market.

Here the entry level starts from Rs 1.5 to 3 lakh. Maruti 800 and Omni are
the dominant players in these segments. With the launch of Tata Nano with a
price range of 1lakh the outlook of this segment has changed. This segment is
sometimes referred to as the small car segment. Competition in this segment
is extreme in Indian market. Maruti 800 (Budget Car Segment)
Compact car segment- It lies between budget car and family car. Preferred
price range is between Rs 3 to 4.5 lakh. Maruti Zen, Fiat Uno, Tata Indica,
Santro, Matiz is some of the dominant players in this segment. Maruti Zen
(Compact car segment)

Education: Market can be segmented on the basis of education matriculation or less, under graduates,
graduates, post-graduation, etc. Most studies show that the highly educated people spend more than the
poorly educated in respect of housing, clothing, recreation, etc.
Example-: Marketing of Books

d. Family Size: The consumption patterns of certain products definitely vary with the number of people
in the household. Manufacturers of certain products such as ice-cream market family packs.
Example-: Premium Car Segment- This segment represents the buyer who require true world class
luxury car. Price ranges between Rs 6 to 8 lakh. Ford Escort, Honda City,
Honda City, Mitsubishi Lancer, Audi 1800, Opel Astra etc are some of the
major cars in this segment. Opel Astra (Premium car segment)
e. Family Life Cycle: The market can be segmented as bachelors, newly
married couples, married with grown up children, older married couples, etc. For selling tours and
vacations, Life Insurance policies etc., this segmentation is of use.
f. Race and Religion: Consumption patterns of certain products differ on the basis of religion and race,
such as alcohol and meat products.

III. SOCIOGRAPHIC SEGMENTATION:

The market can be segmented on the basis of sociological factors such as :
Cultural Influences: The marketer must consider cultural influences while segmenting markets. People in
urban areas are influenced to a certain extent by western culture, whereas, many people in villages follow
more or less traditional culture. Culture is influenced by our socio-cultural institutions like family,
religion, language, education, and so on.

Influence of Social Class: Buying behaviour is reflected by the influence of social class to which the
consumers belong. The social class can be segmented as lower -lower, middle-lower, upper-lower,
lower-middle, middle-middle, upper-middle, lower-upper, middle-upper and upper-upper. Firms dealing in
clothing, home furnishing, automobiles, etc. can design products for specific social class.
Influence of Reference Groups: A reference group may be defined as a group of people who influence a
persons attitudes, values and behaviour. Consumer behaviour is influenced by the small groups to which
they belong or aspire to belong. These groups include family, religious groups, a circle of close friends or
neighbours, etc. Each group develops its own set of attitudes and beliefs that serve as guidelines for
members behavior.
The influences of cultural and social factor are on consumer behavior. So products are segmented on
the basis of social and cultural factor.
Example:
Zee Televisions deals with variety of channels regional channel, sports channel, movie
channel.
McDonald has both veg and non veg burger. McDonald has veg burger for vegetarian and
nonveg burger for non vegetarian.
IV. PSYCHOGRAPHIC SEGMENTATION:
It refers to individual aspects like life style and personality.
a. Life-Style: Sellers study the life-styles of the consumers. For example, a manufacturer of readymade
garments may design his clothes differently matching different life styles of college-students (more
fashionable), office-goers (more sober) and so on.
Example: Caf Coffee Day
They choose lifestyle oriented, urban consumers as target with youth.
They make coffee an experience and provide a special experience to chosen
segment. CCD has estimated that presently 60% of the footfalls in its 300 outlets
belong to students between the ages of 15 to 24 years. The CCD are targeting
students and trying to establish a space in their lives.
b. Personality: Personality characteristics such as leadership, independence, masculine, impulsive,
ambitious,-etc., do influence buying behaviour.
V. BEHAVIOURAL SEGMENTATION:
In this case, buyers are divided into groups on the basis of their response to the product usage rate, user
status, loyalty status, buying motives, and so On.
Usage Rate: One possible way to define target market is by product usage. There can be heavy users,
medium users, light users, and nonusers. Targeting on this basis may be useful to the seller who want to
increase consumption by present users and to convince and induce nonusers to become users.

User Status: Market can be segmented on the basis of user status such as: non-user, ex-user, potential
user, first-time user, regular-user, & so on.
Readiness Stage: Market can be segmented on the basis of peoples readiness to buy the product. Some
people are well informed and are interested to buy the product. Some other may be well informed but not
interested to buy the product.
Buying Motives: Buyers buy the product with different buying motives such as economy,
convenience, prestige, etc. Accordingly promotional appeals can be directed to the target
audience.

Benefit sought: - Quality / economy / service / look etc of the product.

Example: Nestle has found a separate segment atta noodles as distinct from the maida noodles.
Usage rate: - Heavy user / moderate user / light user of a product.
User status: - Regular / potential / first time user / irregular /occasional.
Loyalty to brand: - Hard core loyal / split loyal / shifting / switches.
Occasion:
Occasion - Holidays and occasion stimulate customer to purchase products.
Attitude toward offering: - Enthusiastic / positive attitude / negative attitude / indifferent / hostile.
Example: Shampoos, soap and all FMCG products buying behavior segmentation is used.