Unit II Connecting with Customers 10 Hrs

Level of knowledge: Conceptual

Consumer behaviour model (Black box) Factors affecting consumer
Behaviour, Types of Buying Decision Behaviour, The Buyer Decision
Process, The Business Buyer Decision Process, Institutional and
Government Market. Segmentation, targeting and positioning for
competitive advantage.

Consumer behaviour model (Black box)

Introduction
The relationship between the customer (also called the buyer) and the
provider (the seller) forms through a phenomenon called a market
exchange. During the exchange process, each party assesses the relative
trade-offs they must make to satisfy their respective needs and wants.
On the part of the seller, the trade-offs are guided by company policies and
objectives. For example, company policy may dictate that it can proceed
with an exchange only when the profit margin is 10 percent or greater.
The buyer—the other party in the exchange—also has policies and
objectives that guide his or her decisions in an exchange. For individual
buyers, these are usually unwritten personal policies and objectives that
people make at each stage of a purchasing decision based on the
information and options available to them. Even more likely, individuals
often are not fully conscious of what prompts them to behave in a
particular manner.

Essential Questions About Buyer Behaviour

Buyers are essential partners in the exchange process. Without them,
exchanges would stop. Buyers are the focus of successful marketing; their
needs and wants are the reason for marketing. Without an understanding
of buyer behaviour, it isn’t possible to tailor an offering to the demands of
potential buyers. When potential buyers are not satisfied, exchange does
not proceed, and the goals of the marketer are not met. As long as buyers
have free choice and competitive offerings from which to choose, they are
ultimately in control of the marketplace.

Two key questions a marketer needs to answer related to buyer behaviour

are:
 How do potential buyers go about making purchase decisions?

 What factors influence their decision process and in what way?

The answers to these two questions form the basis for the design of a
market offering.
When we use the term “buyer,” we are referring to an individual, group, or
organization that engages in market exchange. In fact, there are differences
in the characteristics of these three entities and how they behave in an
exchange. Therefore, individuals and groups are traditionally placed in
the consumer category, while organization is the second category. This
module will first discuss consumer purchasing decisions, followed by
business-to-business purchasing decisions.

Opening the “Black Box” of Consumer Behaviour

Consumer behaviour refers to buyers who are purchasing products for

personal, family, or group use. Over time, marketers have turned to the
work of behavioural scientists, philosophers, economists, social
psychologists, and others to help them understand consumer behaviour. As
a result, there are many different theories and models used to explain why
consumers act as they do. Are consumers fundamentally active or passive?
Rational or emotional? How do they make buying decisions?
1. The Economic Man Theory
One early theory of consumer decision making based on principles of
economics is known as the “economic man.” According to the “economic
man” model, consumers are rational and narrowly self-interested. This
theory assumes people act selfishly as consumers, always trying to
maximize the benefits they derive from the exchange process. (This theory
asserts that the seller/producer is also an economic man, who
always strives to maximize his profits from an exchange.) The economic
man model suggests consumers actively use information about all the
available options before making a decision to purchase.
Although this model may help explain some consumer decisions, most
would agree it is too simplistic to explain every consumer choice. In fact,
people often make decisions based on irrational factors as well. For
example, some consumers may be heavily influenced by word-of-
mouth information from friends or peers. They might choose something
because of herd mentality rather than because it provides the greatest
objective value. Similarly, many people are averse to change, and so they
make suboptimal consumer choices because a familiar choice seems easier
or safer.
2. The Black Box Model (Stimulus-Response Model)
Another model of consumer behaviour, called the stimulus-response or
“black box” model, focuses on the consumer as a thinker and problem
solver who responds to a range of external and internal factors when
deciding whether or not to buy. These factors are shown in Figure 1, below:

As illustrated in the figure below, the external stimuli that consumers

respond to include the marketing mix and other environmental factors in
the market. The marketing mix (the four Ps) represents a set of stimuli that
are planned and created by the company. The environmental stimuli are
supplied by the economic, political, and cultural circumstances of a society.
Together these factors represent external circumstances that help shape
consumer choices.
The internal factors affecting consumer decisions are described as the
“black box.” This “box” contains a variety of factors that exist inside the
person’s mind. These include characteristics of the consumer, such as their
beliefs, values, motivation, lifestyle, and so forth. The decision-making
process is also part of the black box, as consumers come to recognize they
have a problem they need to solve and consider how a purchasing decision
may solve the problem. As a consumer responds to external stimuli, their
“black box” process choices based on internal factors and determine the
consumer’s response–whether to purchase or not to purchase.
Like the economic man model, this model also assumes that regardless of
what happens inside the black box (the consumer’s mind), the consumer’
response is a result of a conscious, rational decision process. Many
marketers are sceptical of this assumption and think that consumers are
often tempted to make irrational or emotional buying decisions. In fact,
marketers understand that consumers’ irrationality and emotion are often
what make them susceptible to marketing stimuli in the first place.
For this reason, consumer purchasing behaviour is considered by many to
be a mystery or “black box.” When people themselves don’t fully
understand what drives their choices, the exchange process can
be unpredictable and difficult for marketers to understand.
Buyer Behaviour as Problem Solving
A common way for marketers to think about consumer behaviour today
is as a set of activities a person goes through in order to solve problems.
This problem-solving process is triggered when a consumer identifies some
unmet need. For instance, a family consumes all of the milk in the house, or
a birthday party is coming up and a gift is needed, or a soccer team is
planning an end-of-season picnic. Each buying scenario presents a problem
the buyer must solve.
These problems can involve two types of needs: physical (such as a need
for milk, a birthday gift, or picnic food) or psychological (for example, the
need to feel secure, the need to be loved, or the need to have fun).
This problem-solving process also involves needs and wants. A need is a
basic deficiency for an essential item. You need food, water, air, security,
and so forth. A want places specific, personal criteria on how a need must
be fulfilled. To illustrate, when we are hungry, food is a need. When we
have a specific food item in mind, that item is a want. That difference is
illustrated by the familiar scenario of standing in front of a full refrigerator
and complaining that there is nothing to eat.
Most of marketing is in the want-fulfilling business, not the need-fulfilling
business. Swatch and Timex do not want you to buy just any watch. They
want you to want their brands of watches. Likewise, H&M wants you to
desire their brand of clothing when you shop for clothes. On the other
hand, the American Cancer Association markets to you in the hope that you
will feel the need to get a check-up, and it doesn’t care which doctor you go
to. But in the end, marketing is mostly about creating and satisfying wants.

Source: https://courses.lumenlearning.com/clinton-
marketing/chapter/reading-the-black-box-of-consumer-behavior/

Factors affecting consumer Behaviour

Consumer behaviour is the study of how individual customers, groups or
organizations select, buy, use, and dispose ideas, goods, and services to
satisfy their needs and wants.
It refers to the actions of the consumers in the marketplace and the
underlying motives for those actions.
Engel, Blackwell, and Mansard define consumer behaviour as “…the actions
and decision processes of people who purchase goods and services for
personal consumption.”
There are several factors which influence the buying decision of
consumers, cultural factors being one of the most important factors.

1. CULTURAL FACTORS
Cultural factors comprise of set of values and ideologies of a
particular community or group of individuals. It is the culture of an
individual which decides the way he/she behaves. In simpler words,
culture is nothing but values of an individual. What an individual learns
from his parents and relatives as a child becomes his culture.
Example - In India, people still value joint family system and family ties.
Children in India are conditioned to stay with their parents till they get
married as compared to foreign countries where children are more
independent and leave their parents once they start earning a living for
themselves.
Cultural factors have a significant effect on an individual’s buying decision.
Every individual has different sets of habits, beliefs and principles which
he/she develops from his family status and background. What they see
from their childhood becomes their culture.
Let us understand the influence of cultural factors on buying decision
of individuals with the help of various examples.
Females staying in West Bengal or Assam would prefer buying sarees as
compared to Westerns. Similarly a male consumer would prefer a Dhoti
Kurta during auspicious ceremonies in Eastern India as this is what their
culture is. Girls in South India wear skirts and blouses as compared to girls
in north India who are more into Salwar Kameez.
Our culture says that we need to wear traditional attire on marriages and
this is what we have been following since years.
People in North India prefer breads over rice which is a favorite with
people in South India and East India.

Subcultures
Each culture further comprises of various subcultures such as religion, age,
geographical location, gender (male/female), status etc.

a. Religion (Christianity, Hindu, Muslim, Sikhism, Jainism etc)

A Hindu bride wears red, maroon or a bright colour lehanga or saree
whereas a Christian bride wears a white gown on her wedding day. It is
against Hindu culture to wear white on auspicious occasions. Muslims on
the other hand prefer to wear green on important occasions.
For Hindus eating beef is considered to be a sin whereas Muslims and
Christians absolutely relish the same. Eating pork is against Muslim religion
while Hindus do not mind eating it.
A sixty year old individual would not like something which is too bright and
colorful. He would prefer something which is more sophisticated and
simple. On the other hand a teenager would prefer funky dresses and loud
colours.
In India widows are expected to wear whites. Widows wearing bright
colours are treated with suspicion.
b. Status (Upper Class, Middle class and Lower Class)
People from upper class generally have a tendency to spend on luxurious
items such as expensive gadgets, cars, dresses etc.You would hardly find an
individual from a lower class spending money on high-end products. A
person who finds it difficult to make ends meet would rather prefer
spending on items necessary for survival. Individuals from middle class
segment generally are more interested in buying products which would
make their future secure.
c. Gender (Male/Female)
People generally make fun of males buying fairness creams as in our
culture only females are expected to buy and use beauty products. Males
are perceived to be strong and tough who look good just the way they are.

2. SOCIAL FACTORS
Social Factors affecting Consumer Behaviour
Consumer Behaviour is an effort to study and understand the buying
tendencies of consumers for their end use.
Social factors play an essential role in influencing the buying
decisions of consumers.
Human beings are social animals. We need people around to talk to and
discuss various issues to reach to better solutions and ideas. We all live in a
society and it is really important for individuals to adhere to the laws and
regulations of society.
Social Factors influencing consumer buying decision can be classified as
under:
 Reference Groups

 Immediate Family Members

 Relatives

 Role in the Society

 Status in the society

1. Reference Groups
Every individual has some people around who influence him/her in
any way. Reference groups comprise of people that individuals
compare themselves with. Every individual knows some people in the
society who become their idols in due course of time.
Co workers, family members, relatives, neighbours, friends, seniors at
workplace often form reference groups.
Reference groups are generally of two types:
a. Primary Group - consists of individuals one interacts with on a
regular basis.
Primary groups include:
 Friends

 Family Members

 Relatives

 Co Workers
All the above influence the buying decisions of consumers due to following
reasons:
They have used the product or brand earlier. They know what the product
is all about. They have complete knowledge about the features and
specifications of the product.
Tim wanted to purchase a laptop for himself. He went to the nearby store
and purchased a Dell Laptop. The reason why he purchased a Dell Laptop
was because all his friends were using the same model and were quite
satisfied with the product. We tend to pick up products our friends
recommend.
A married individual would show strong inclination towards buying
products which would benefit not only him but also his family members as
compared to a bachelor. Family plays an important role in influencing
the buying decisions of individuals.
A consumer who has a wife and child at home would buy for them rather
than spending on himself. An individual entering into marriage would be
more interested in buying a house, car, household items, and furniture and
so on. When an individual gets married and starts a family, most of his
buying decisions are taken by the entire family.
Every individual goes through the following stages and shows a different
buying need in each stage:
 Bachelorhood: Purchases Alcohol, Beer, Bike, Mobile Handsets
(Spends Lavishly)
 Newly Married: Tend to purchase a new house, car, household
furnishings. (Spends sensibly)
 Family with Children: Purchases products to secure his as well as
his family’s future.
 Empty nest (Children getting married)/Retirement/Old
Age: Medicines, Health Products, and Necessary Items.
A Ford Car in the neighbourhood would prompt three more families to buy
the same model.

b. Secondary Groups - Secondary groups share indirect relationship

with the consumer. These groups are more formal and individuals do
not interact with them on a regular basis, Example - Religious
Associations, Political Parties, Clubs etc.

2. Role in the Society

Each individual plays a dual role in the society depending on the
group he belongs to. An individual working as Chief Executive Officer with
a reputed firm is also someone’s husband and father at home. The buying
tendency of individuals depends on the role he plays in the society.
3. Social Status
An individual from an upper middle class would spend on luxurious items
whereas an individual from middle to lower income group would buy items
required for his/her survival.

3. PERSONAL FACTORS
Consumer Behaviour helps us understand the buying tendencies and
spending patterns of consumers. Not all individuals would prefer to buy
similar products.
Consumer behaviour deals with as to why and why not an individual
purchases particular products and services.
Personal Factors play an important role in affecting consumer buying
behaviour.

1. Occupation
The occupation of an individual plays a significant role in influencing
his/her buying decision. An individual’s nature of job has a direct
influence on the products and brands he picks for himself/herself.
Tim was working with an organization as Chief Executive Officer while
Jack, Tim’s friend now a retired professor went to a nearby school as a part
time faculty. Tim always looked for premium brands which would go with
his designation whereas Jack preferred brands which were not very
expensive. Tim was really conscious about the clothes he wore, the
perfume he used, the watch he wore whereas Jack never really bothered
about all this.
That is the importance of one’s designation. As a CEO of an organization, it
was really essential for Tim to wear something really elegant and unique
for others to look up to him. A CEO or for that matter a senior professional
can never afford to wear cheap labels and local brands to work.
An individual’s designation and his nature of work influence his buying
decisions. You would never find a low level worker purchasing business
suits, ties for himself. An individual working on the shop floor can’t afford
to wear premium brands everyday to work.
College goers and students would prefer casuals as compared to
professionals who would be more interested in buying formal shirts and
trousers.

2. Age
Age and human lifecycle also influence the buying behaviour of
consumers. Teenagers would be more interested in buying bright and loud
colours as compared to a middle aged or elderly individual who would
prefer decent and subtle designs.
A bachelor would prefer spending lavishly on items like beer, bikes, music,
clothes, parties, clubs and so on. A young single would hardly be interested
in buying a house, property, insurance policies, gold etc. An individual who
has a family, on the other hand would be more interested in buying
something which would benefit his family and make their future secure.

3. Economic Condition
The buying tendency of an individual is directly proportional to his
income/earnings per month. How much an individual brings home
decides how much he spends and on which products?
Individuals with high income would buy expensive and premium products
as compared to individuals from middle and lower income group who
would spend mostly on necessary items. You would hardly find an
individual from a low income group spending money on designer clothes
and watches. He would be more interested in buying grocery items or
products necessary for his survival.
4. Lifestyle
Lifestyle, a term proposed by Austrian psychologist Alfred Adler in 1929,
refers to the way an individual stays in the society. It is really important for
some people to wear branded clothes whereas some individuals are really
not brand conscious. An individual staying in a posh locality needs to
maintain his status and image. An individual’s lifestyle is something to do
with his style, attitude, perception, his social relations and immediate
surroundings.
5. Personality
An individual’s personality also affects his buying behaviour. Every
individual has his/her own characteristic personality traits which reflect in
his/her buying behaviour. A fitness freak would always look for fitness
equipment whereas a music lover would happily spend on musical
instruments, CDs, concerts, musical shows etc.
 4. PSYCHOLOGICAL FACTORS
Consumer Behaviour deals with the study of buying behaviour of
consumers. Let us understand the effect of psychological factors on
consumer behaviour:
a. Motivation
Nancy went to a nearby restaurant and ordered pizza for herself.
Why did Nancy buy pizza? Answer - She was feeling hungry and wanted
to eat something.
In the above example, Hunger was the motivating factor for Nancy to
purchase pizza. There are several other factors which motivate individuals
to purchase products and services. An individual who is thirsty would
definitely not mind spending on soft drinks, packaged water, and juice and
so on. Recognition and self-esteem also influence the buying decision of
individuals.
Why do people wear branded clothes? Individuals prefer to spend on
premium brands and unique merchandise for others to look up to them.
Certain products become their status symbol and people know them by
their choice of picking up products that are exclusive. An individual who
wears a Tag Heuer watch would never purchase a local watch as this would
be against his image.
b. Perception
What is Perception?
What an individual thinks about a particular product or service is his/her
perception towards the same. For someone a Dell Laptop might be the best
laptop while for others it could be just one of the best brands available.
Individuals with the same needs might not purchase similar products due
to difference in perception.
Catherine and Roselyn had a hectic day at work and thus wanted to have
something while returning from work. Catherine ordered a large chicken
pizza with French fries and coke while Roselyn preferred a baked vegetable
sandwich. Though both Catherine and Roselyn had the same motivation
(hunger), but the products they purchased were entirely different as
Roselyn perceived pizza to be a calorie laden food. Individuals think
differently and their perceptions do not match.
Individuals perceive similar situation differently due to difference in the
way they interpret information.
 c. Learning
Learning comes only through experience. An individual comes to know
about a product and service only after he/she uses the same. An individual
who is satisfied with a particular product/service will show a strong
inclination towards buying the same product again.

d. Beliefs and Attitude

Beliefs and attitude play an essential role in influencing the buying decision
of consumers. Individuals create a certain image of every product or
service available in the market. Every brand has an image attached to it,
also called its brand image.
Consumers purchase products/services based on their opinions which they
form towards a particular product or service. A product might be really
good but if the consumer feels it is useless, he would never buy it.

5. ECONOMIC FACTORS
The consumer buying habits and decisions greatly depend on the economic
situation of a country or a market. When a nation is prosperous, the
economy is strong, which leads to the greater money supply in the market
and higher purchasing power for consumers. When consumers experience
a positive economic environment, they are more confident to spend on
buying products.
Whereas, a weak economy reflects a struggling market that is impacted by
unemployment and lower purchasing power.
Economic factors bear a significant influence on the buying decision of a
consumer. Some of the important economic factors are:
i. Personal Income
When a person has a higher disposable income, the purchasing power
increases simultaneously. Disposable income refers to the money that is
left after spending towards the basic needs of a person.
When there is an increase in disposable income, it leads to higher
expenditure on various items. But when the disposable income reduces,
parallelly the spending on multiple items also reduced.
ii. Family Income
Family income is the total income from all the members of a family. When
more people are earning in the family, there is more income available for
shopping basic needs and luxuries. Higher family income influences the
people in the family to buy more. When there is a surplus income available
for the family, the tendency is to buy more luxury items which otherwise a
person might not have been able to buy.
iii. Consumer Credit
When a consumer is offered easy credit to purchase goods, it promotes
higher spending. Sellers are making it easy for the consumers to avail credit
in the form of credit cards, easy installments, bank loans, hire purchase,
and many such other credit options. When there is higher credit available
to consumers, the purchase of comfort and luxury items increases.
iv. Liquid Assets
Consumers who have liquid assets tend to spend more on comfort and
luxuries. Liquid assets are those assets, which can be converted into cash
very easily. Cash in hand, bank savings and securities are some examples of
liquid assets. When a consumer has higher liquid assets, it gives him more
confidence to buy luxury goods.
v. Savings
A consumer is highly influenced by the amount of savings he/she wishes
to set aside from his income. If a consumer decided to save more, then his
expenditure on buying reduces. Whereas if a consumer is interested in
saving more, then most of his income will go towards buying products.

Types of Buying Decision Behaviour,

4 Types of Consumer Behaviour
A consumer’s buying decision depends on the type of products that they
need to buy. The behaviour of a consumer while buying a coffee is a lot
different from while buying a car.

Based on observations, it is clear that purchases that are more complex and
expensive involve higher deliberation and many more participants.
Consumer buying behaviour is determined by the level of involvement that
a consumer shows in a purchase decision. The involvement allows
customers to ensure that this product is exactly what they want or do not
want.

The amount of risk involved in a purchase also determines the buying

behaviour. Higher priced goods tend to high a higher risk, thereby seeking
higher involvement in buying decisions.
There are four types of consumer buying behaviour:
1. Complex buying behaviour
2. Dissonance-reducing buying behaviour
3. Habitual buying behaviour
4. Variety seeking behaviour

1. Complex buying behaviour

Complex buying behaviour is encountered particularly when consumers
are buying an expensive product. In this infrequent transaction,
consumers are highly involved in the purchase decision. Consumers
will research thoroughly before committing to invest.
Consumer behaves very differently when buying an expensive product or a
product that is unfamiliar to them. When the risk of buying a product is
very high, a consumer consults friends, family, and experts before making
the decision.
For example, when a consumer is buying a car for the first time, it’s a big
decision as it involves high economic risk. There is a lot of thought on how
it looks, how his friends and family will react, how his social status will
change after buying the car, and so on.
In complex buying behaviour, the buyer will pass through a learning
process. He will first develop beliefs about the product, then attitudes, and
then make a thoughtful purchase choice.
For complex buying behaviour customers, marketers should have a deep
understanding of the products. It is expected that they help the consumer
to understand their product. It is important to create an advertising
message in a way that influences the buyer’s beliefs and attitudes.

2. Dissonance-reducing buying behaviour

In dissonance-reducing buying behaviour, consumer involvement is very
high. This might be due to high prices and infrequent purchases. In
addition, there is low availability of choices with fewer significant
differences among brands. In this type, a consumer buys a product that is
easily available.
Consumers will be forced to buy goods that do not have too many choices
and therefore consumers will be left with limited decision making. Based
on the products available, time limitations, or budget limitations,
consumers buy certain products without a lot of research.
For example, a consumer who is looking for a new collapsible table that can
be taken for camping quickly decides on the product based on a few brands
available. The main criteria here will be the use and the feature of the
collapsible table and the budget available to him.
Marketers should run after-sale service camps that deliver focused
messaging. These campaigns should aim to support consumers and
convince them to continue with the choice of their brand. These marketing
campaigns should focus on building repeat purchases and referrals by
offering discounts and incentives.
3. Habitual buying behaviour
Habitual Buying Behaviour is depicted when a consumer has low
involvement in a purchase decision. In this case, the consumer is
perceiving only a few significant differences between brands.
When consumers are buying products that they use for their daily routine,
they do not put a lot of thought. They either buy their favourite brand or
the one that they use regularly – or the one available in the store or the one
that costs the least.
For example, when a consumer buys an energy drink, he tends to buy the
flavour/taste that he likes without actually putting in a lot of research and
time. Many products fit into this category. Products such as chocolates,
cakes, juices, etc., all fit into this product category.
Consumers just go for it and buy it – there is no brand loyalty. Consumers
do not research or need information regarding the purchase of such
products.
Habitual buying behaviour is influenced by radio, television, and print
media. Moreover, consumers are buying based on brand familiarity. Hence
marketers must use repetitive advertisements to build brand familiarity.
Further to initiate product trial, marketers should use tactics like price
drop promotions and sales promotions.
Marketers should attract consumers using visual symbols and imagery in
their advertising. Consumers can easily remember visual advertisements
and can associate with a brand.

4. Variety seeking buying behaviour

In variety-seeking consumer behaviour, consumer involvement is low.
There are significant differences between brands. Here consumers often
do a lot of brand switching. The cost of switching products is low, and
hence consumers might want to try out new products just out of curiosity
or boredom. Consumers here, generally buy different products not because
of dissatisfaction but mainly with an urge to seek variety.
For example, a consumer likes to buy a cookie and choose a brand without
putting much thought into it. Next time, the same consumer might choose a
different brand out of a wish for a different taste. Brand switching occurs
often and without intention.
Brands have to adopt different strategies for such types of consumer
behaviour. The market leader will persuade habitual buying behavior by
influencing the shelf space. The shelf will display a large number of related
but different product versions.
Marketers avoid out-of-stock conditions, sponsor frequent advertising,
offer lower prices, discounts, deals, coupons, and free samples
to attract consumers.
Consumer buying decisions are depended on consumer behaviour. There
are great differences in consumer behaviour while buying a car versus
buying chips. Marketers have to exercise careful judgment in marketing
products to different kinds of consumer behaviour.

The Buyer Decision Process

An individual who purchases products and services from the market for
his/her own personal consumption is called as consumer.

A consumer undergoes the following stages before making a purchase

decision −
Stage 1 − Needs / Requirements
It is the first stage of the buying process where the consumer recognizes a
problem or a requirement that needs to be fulfilled. The requirements can
be generated either by internal stimuli or external stimuli. In this stage, the
marketer should study and understand the consumers to find out what
kinds of needs arise, what brought them about, and how they led the
consumer towards a particular product.
Stage 2 − Information Search
In this stage, the consumer seeks more information. The consumer may
have keen attention or may go into active information search. The
consumer can obtain information from any of the several sources. This
include personal sources (family, friends, neighbours, and acquaintances),
industrial sources (advertising, sales people, dealers, packaging), public
sources (mass media, consumer-rating and organization), and experiential
sources (handling, examining, using the product). The relative influence of
these information sources varies with the product and the buyer.

Stage 3 − Evaluation of Alternatives

In this stage, the consumer uses information to evaluate alternative brands
from different alternatives. How consumers go about evaluating purchase
alternatives depends on the individual consumer and the specific buying
situation. In some cases, consumers use logical thinking, whereas in other
cases, consumers do little or no evaluating; instead they buy on aspiration
and rely on intuition. Sometimes consumers make buying decisions on
their own; sometimes they depend on friends, relatives, consumer guides,
or sales persons.

Stage 4 − Purchase Decision

In this stage, the consumer actually buys the product. Generally, a
consumer will buy the most favourite brand, but there can be two factors,
i.e., purchase intentions and purchase decision. The first factor is the
attitude of others and the second is unforeseen situational factors. The
consumer may form a purchase intention based on factors such as usual
income, usual price, and usual product benefits.

Stage 5 − Post-Purchase Behaviour

In this stage, the consumers take further steps after purchase based on
their satisfaction and dissatisfaction. The satisfaction and dissatisfaction
depend on the relationship between consumer’s expectations and the
product’s performance. If a product is short of expectations, the consumer
is disappointed. On the other hand, if it meets their expectations, the
consumer is satisfied. And if it exceeds their expectations, the consumer
is delighted.
The larger the gap between the consumers’ expectations and the product’s
performance, the greater will be the consumer’s dissatisfaction. This
suggests that the seller should make product claims that faithfully
represent the product’s performance so that the buyers are satisfied.
Consumer satisfaction is important because the company’s sales come from
two basic groups, i.e., new customers and retained customers. It usually
costs more to attract new customers than to retain existing customers and
the best way to retain them is to get them satisfied with the product.

Example: To understand the complete process of consumer decision

making, let us first go through the following example:

Tim went to a nearby retail store to buy a laptop for himself. The store
manager showed him all the latest models and after few rounds of
negotiations, Tim immediately selected one for himself.
In the above example Tim is the consumer and the laptop is the product
which Tim wanted to purchase for his end-use.
Why do you think Tim went to the nearby store to purchase a new laptop?
The answer is very simple. Tim needed a laptop. In other words it was
actually Tim’s need to buy a laptop which took him to the store.
The Need to buy a laptop can be due to any of the following reasons:
 His old laptop was giving him problems.

 He wanted a new laptop to check his personal mails at home.

 He wanted to gift a new laptop to his wife.

 He needed a new laptop to start his own business.

The store manager showed Tim all the samples available with him and
explained him the features and specifications of each model. This is called
information. Tim before buying the laptop checked few other options as
well. The information can come from various other sources such as
newspaper, websites, magazines, advertisements, billboards etc.

Source: https://www.tutorialspoint.com/what-are-the-factors-affecting-
consumer-behaviour

The Business Buyer Decision Process

The stages of business buying includes recognizing the problem,
developing product specs to solve the problem, searching for possible
products, selecting a supplier and ordering the product, and finally
evaluating the product and supplier performance.
8 stages of the business buying process
There are eight stages of the business buying process. Buyers who face a
new-task buying situation usually go through all stages of the buying
process. Buyers making modified or straight rebuys may skip some of the
stages. We will examine these steps for the typical new-task buying
situation.
a. Problem Recognition
The buying process begins when someone in the company recognizes a
problem or need that can be met by acquiring a specific product or service.
Problem recognition can result from internal or external stimuli. Internally,
the company may decide to launch a new product that requires new
production equipment and materials. Or a machine may break down and
need new parts. Perhaps a purchasing manager is unhappy with a current
supplier's product quality, service, or prices. Externally, the buyer may get
some new ideas at a trade show, see an ad, or receive a call from a
salesperson who offers a better product or a lower price. In fact, in their
advertising, business marketers often alert customers to potential
problems and then show how their products provide solutions.

b. General Need Description

Having recognized a need, the buyer next prepares a general need
description that describes the characteristics and quantity of the needed
item. For standard items, this process presents few problems. For complex
items, however, the buyer may have to work with others—engineers, users,
consultants—to define the item. The team may want to rank the
importance of reliability, durability, price, and other attributes desired in
the item. In this phase, the alert business marketer can help the buyers
define their needs and provide information about the value of different
product characteristics.

c. Product Specification
The buying organization next develops the item's technical product
specifications, often with the help of a value analysis engineering team.
Value analysis is an approach to cost reduction in which components are
studied carefully to determine if they can be redesigned, standardized, or
made by less costly methods of production. The team decides on the best
product characteristics and specifies them accordingly. Sellers, too, can use
value analysis as a tool to help secure a new account. By showing buyers a
better way to make an object, outside sellers can turn straight rebuy
situations into new-task situations that give them a chance to obtain new
business.

d. Supplier Search
The buyer now conducts a supplier search to find the best vendors. The
buyer can compile a small list of qualified suppliers by reviewing trade
directories, doing a computer search, or phoning other companies for
recommendations. Today, more and more companies are turning to the
Internet to find suppliers. For marketers, this has levelled the playing
field—smaller suppliers have the same advantages as larger ones and can
be listed in the same online catalogues for a nominal fee: The newer the
buying task, and the more complex and costly the item, the greater the
amount of time the buyer will spend searching for suppliers. The supplier's
task is to get listed in major directories and build a good reputation in the
marketplace. Salespeople should watch for companies in the process of
searching for suppliers and make certain that their firm is considered.

e. Proposal Solicitation
In the proposal solicitation stage of the business buying process, the buyer
invites qualified suppliers to submit proposals. In response, some suppliers
will send only a catalogue or a salesperson. However, when the item is
complex or expensive, the buyer will usually require detailed written
proposals or formal presentations from each potential supplier. Business
marketers must be skilled in researching, writing, and presenting proposals
in response to buyer proposal solicitations. Proposals should be marketing
documents, not just technical documents. Presentations should inspire
confidence and should make the marketer's company stand out from the
competition.

f. Supplier Selection
The members of the buying centre now review the proposals and select a
supplier or suppliers. During supplier selection, the buying centre often
will draw up a list of the desired supplier attributes and their relative
importance. In one survey, purchasing executives listed the following
attributes as most important in influencing the relationship between
supplier and customer: quality products and services, on-time delivery,
ethical corporate behaviour, honest communication, and competitive
prices. Other important factors include repair and servicing capabilities,
technical aid and advice, geographic location, performance history, and
reputation. The members of the buying centre will rate suppliers against
these attributes and identify the best suppliers. As part of the buyer
selection process, buying centres must decide how many suppliers to use.
In the past, many companies preferred a large supplier base to ensure
adequate supplies and to obtain price concessions. These companies would
insist on annual negotiations for contract renewal and would often shift the
amount of business they gave to each supplier from year to year.
Increasingly, however, companies are reducing the number of suppliers.

g. Order-Routine Specification
The buyer now prepares an order-routine specification. It includes the final
order with the chosen supplier or suppliers and lists items such as
technical specifications, quantity needed, expected time of delivery, return
policies, and warranties. In the case of maintenance, repair, and operating
items.

h. Performance Review
In this stage, the buyer reviews supplier performance. The buyer may
contact users and ask them to rate their satisfaction. The performance
review may lead the buyer to continue, modify, or drop the arrangement.
The seller's job is to monitor the same factors used by the buyer to make
sure that the seller is giving the expected satisfaction. We have described
the stages that typically would occur in a new-task buying situation. The
eight stage model provides a simple view of the business buying decision
process. The actual process is usually much more complex.
In the modified rebuy or straight rebuy situation, some of these stages
would be compressed or bypassed. Each organization buys in its own way,
and each buying situation has unique requirements. Different buying
centre participants may be involved at different stages of the process.
Although certain buying process steps usually do occur, buyers do not
always follow them in the same order, and they may add other steps. Often,
buyers will repeat certain stages of the process.
Source: https://www.zainbooks.com/books/marketing/principles-of-
marketing_16_business-buyer-behavior.html

Institutional and Government Market.

Institutional and Government Markets
The American Management Association defines government markets as,
“…one which includes purchases by governmental units-federal, state, and
local-that procure or rent goods and services in carrying out the main
functions of the government.”
Likewise, institutional markets can be defined as, “…a market consisting
of schools, universities, hospitals, charities, clubs, and similar organisations
which buy goods and services for use in the production of their own goods
and services.”
Institutional and government markets constitute a not-for-profit market
with the primary objective of the general welfare of the people. Low
budgets and captive patrons characterize such markets. Companies
catering to institutional markets, establish and maintain separate
departments to meet the requirements. Whereas Governments are the
primary and bulk buyers of goods and services. Government organizations
have specific procedures that suppliers should follow.
Companies catering to institutional markets, establish and maintain
separate departments to meet the requirements. Whereas Governments
are the primary and bulk buyers of goods and services. Government
organizations have specific procedures that suppliers should follow.
a. Institutional Markets
The institutional market consists of schools, hospitals, nursing homes,
prisons, and other institutions that provide goods and services to people in
their care. Institutions differ from one another in their sponsors and in
their objectives. Many institutional markets are characterized by low
budgets and captive patrons. For example, hospital patients have little
choice but to eat whatever food the hospital supplies. A hospital-
purchasing agent has to decide on the quality of food to buy for patients.
Because the food is provided as a part of a total service package, the buying
objective is not profit. Nor is strict cost minimization the goal—patients
receiving poor quality food will complain to others and damage the
hospital's reputation. Thus, the hospital purchasing agent must search for
institutional-food vendors whose quality meets or exceeds a certain
minimum standard and whose prices are low. Many marketers set up
separate divisions to meet the special characteristics and needs of
institutional buyers.
b. Government Markets
The government market offers large opportunities for many companies,
both big and small. In most countries, government organizations are major
buyers of goods and services. Government buying and business buying are
similar in many ways. But there are also differences that must be
understood by companies that wish to sell products and services to
governments. To succeed in the government market, sellers must locate
key decision makers, identify the factors that affect buyer behaviour, and
understand the buying decision process. Government organizations
typically require suppliers to submit bids, and normally they award the
contract to the lowest bidder. In some cases, the government unit will make
allowance for the supplier's superior quality or reputation for completing
contracts on time. Many companies that sell to the government have not
been marketing oriented for a number of reasons. Total government
spending is determined by elected officials rather than by any marketing
effort to develop this market. Government buying has emphasized price,
making suppliers invest their effort in technology to bring costs down.
When the product's characteristics are specified carefully, product
differentiation is not a marketing factor. Nor do advertising or personal
selling matter much in winning bids on an open-bid basis.

Source: https://www.tutorialspoint.com/differences-between-
institutional-markets-and-government-markets

Segmentation, Targeting and Positioning for competitive advantage.

Market Segmentation and Targeting-

Market segmentation and targeting refer to the process of identifying a
company's potential customers, choosing the customers to pursue, and
creating value for the targeted customers. It is achieved through the
segmentation, targeting, and positioning (STP) process.
I-Segmentation:

What is market segmentation?

At its core, market segmentation is the practice of dividing your target
market into approachable groups. Market segmentation creates subsets of
a market based on demographics, needs, priorities, common interests,
and other psychographic or behavioural criteria used to better understand
the target audience.
By understanding your market segments, you can leverage this targeting
in product, sales, and marketing strategies. Market segments can power
your product development cycles by informing how you create product
offerings for different segments like men vs. women or high income vs. low
income.
The benefits of market segmentation
Companies who properly segment their market enjoy significant
advantages. According to a study by Bain & Company, 81% of executives
found that segmentation was crucial for growing profits. Bain also found
that organisations with great market segmentation strategies enjoyed a
10% higher profit than companies whose segmentation wasn’t as effective
over a 5-year period.

Other benefits include:

1. Stronger marketing messages: You no longer have to be generic and
vague – you can speak directly to a specific group of people in ways
they can relate to, because you understand their characteristics,
wants, and needs.
 2. Targeted digital advertising: Market segmentation helps you
understand and define your audience’s characteristics, so you can
direct your marketing efforts to specific ages, locations, buying
habits, interests etc.
3. Developing effective marketing strategies: Knowing your target
audience gives you a head start about what methods, tactics and
solutions they will be most responsive to.
4. Better response rates and lower acquisition costs: These will result
from creating your marketing communications both in ad messaging
and advanced targeting on digital platforms like Facebook and
Google using your segmentation.
5. Attracting the right customers: Market segmentation helps you
create targeted, clear and direct messaging that attracts the people
you want to buy from you.
6. Increasing brand loyalty: when customers feel understood, uniquely
well served and trusting, they are more likely to stick with your
brand.
7. Differentiating your brand from the competition: More specific,
personal messaging makes your brand stand out.
8. Identifying niche markets: segmentation can uncover not only
underserved markets, but also new ways of serving existing markets
– opportunities which can be used to grow your brand.
9. Staying on message: As segmentation is so linear, it’s easy to stay on
track with your marketing strategies, and not get distracted into less
effective areas.
10. Driving growth: You can encourage customers to buy from you again,
or trade up from a lower-priced product or service.
11. Enhanced profits: Different customers have different disposable
incomes; prices can be set according to how much they are willing to
spend. Knowing this can ensure you don’t over (or under) sell
yourself.
12. Product development: You’ll be able to design with the needs of your
customers’ top of mind, and develop different products that cater to
your different customer base areas.

Companies like American Express, Mercedes Benz, and Best Buy have all
used segmentation strategies to increase sales, build better products, and
engage better with their prospects and customers.

What Are the Basis of Segmenting Consumer Markets?

To succeed in your business, you have to have a clear understanding of
what your customers need. However, not all of your customers are the
same. They may differ in age or gender or have vastly different values and
interests. They may even use your products to satisfy different
requirements. To appeal to your customers effectively, segment your target
market so you can customize how you engage with them.

Types of market segmentation

With segmentation and targeting, you want to understand how your

market will respond in a given situation, like purchasing your products. In
many cases, a predictive model may be incorporated into the study so that
you can group individuals within identified segments based on specific
answers to survey questions.

1. Demographic segmentation
Demographic segmentation sorts a market by elements such as age,
education, income, family size, race, gender, occupation, and nationality.
Demographic is one of the simplest and most commonly used forms of
segmentation because the products and services we buy, how we use those
products, and how much we are willing to spend on them is most often
based on demographic factors.
The most common way to identify a consumer market is by demographic
segmentation, which refers to the criteria most businesses use to
understand how groups of their target market are different from one
another. The criteria for demographic segmentation includes:
 Gender
 Age
 Family status
 Sexual orientation
 Occupation
 Income
 Education
 Religion
 Ethnicity
 Nationality

It's essential to segment your target market by demographics because

these criteria affect their individual needs. For example, a man in his early
30s has different preferences than a woman in her late 60s. If your business
sells shoes, you cannot appeal to both demographic segments in the same
way. The young man may be interested in athletic name-brand shoes, while
the older woman may want comfortable sandals with arch support. The
marketing you use to reach both demographic segments needs to take their
requirements into account.
In some cases, people from different demographics may have the same
needs, which is why it's critical to understand your consumer on a granular
level. For example, the customers of a bakery may differ in religion,
nationality, education and occupation, but they may all desire the same
baked goods and react the same way to the marketing.

2. Geographic segmentation
Geographic segmentation can be a subset of demographic segmentation,
although it can also be a type of segmentation in its own right. It creates
different target customer groups based on geographical boundaries.
Because potential customers have needs, preferences, and interests that
differ according to their geographies, understanding the climates and
geographic regions of customer groups can help determine where to sell
and advertise, as well as where to expand your business.
Sometimes, this is seen as a subcategory of demographic segmentation.
Many businesses and marketers treat this category as major because
customers’ geographic criteria can significantly affect their needs as
consumers. Geographic segmentation elements include:
 Region or area, such as country, state, province, county, town or city
 Size, such as population or population density
 Climate, such as weather patterns
Consumers from different geographic areas have varying needs. An online
retailer who sells swimwear to customers across the United States and
Canada may need to vary the marketing to those consumers who live in
colder climates. Many parts of Canada and the northern United States have
a beach season that only lasts for a few months. As a result, the retailer
needs to focus promotional efforts during this time in those areas, while in
the southern United States, they can run year-round promotions.
Similarly, a corner store that operates in a rural area with a sparse
population uses different marketing and sales tactics than a corner store on
a busy metropolitan street with a high population density. In these market
segments examples, businesses need to understand how geographic
segmentation criteria affect the needs of their consumers.

3. Firmographic Segmentation
Firmographic Segmentation is similar to demographic segmentation,
except that demographics look at individuals while firmographics look at
organisations. Firmographic segmentation would consider things like
company size, number of employees and would illustrate how addressing a
small business would differ from addressing an enterprise corporation.

4. Behavioural Segmentation
Behavioural Segmentation divides markets by behaviours and decision-
making patterns such as purchase, consumption, lifestyle, and usage. For
instance, younger buyers may tend to purchase bottled body wash, while
older consumer groups may lean towards soap bars. Segmenting markets
based on purchase behaviours enables marketers to develop a more
targeted approach because you can focus on what you know they, and are
therefore more likely to buy.
While demographic, geographic and psychographic traits include specific
qualities about your customers and their needs, behavioural segmentation
is about how your customers feel about your products. This is a good
starting point for market segmentation because it is directly related to your
business.
Behavioural segmentation includes:
 Benefits your consumers are looking for from the product
 Whether they have previously bought the product
 How often they need the product or how often they use the product
 How ready they are to buy the product right now
 Whether they feel loyal toward your brand
  When they buy the product, such as on holidays or for specific
milestones

The way you market to a loyal customer is different from how you market
to someone who knows nothing about your business. Use behavioural
segmentation to understand what your consumers need and what they
think of your business. If you approach loyal customers with basic
information about your products, they may feel insulted you think they
don’t know it already. Similarly, if you don't begin by talking about the
benefits of your product to a new prospect, they will not know what makes
your solution better than a competitor's.

5. Psychographic segmentation
Psychographic segmentation considers the psychological aspects of
consumer behaviour by dividing markets according to lifestyle, personality
traits, values, opinions, and interests of consumers. Large markets like the
fitness market use psychographic segmentation when they sort their
customers into categories of people who care about healthy living and
exercise.
While demographic and geographic segmentation look at many tangible
criteria, psychographic segmentation is about how consumers live their
lives. Some of these qualities are intangible and difficult to research.
Conduct customer surveys to learn more about their psychographic
attributes, which include:
 Values, such as what they believe to be important to them, including
family, community, money or success
 Attitudes and opinions, such as how they feel about a political party
or toward a key social issue
 Interests, such as what kinds of movies they watch or what their
hobbies are
 Activities, such as whether they play a sport or instrument or enjoy a
cooking a particular kind of cuisine

A consumer’s psychographic qualities affect which products and services

they buy. For example, consumers who strongly value environmental
sustainability may look for products that are manufactured using recycled
materials. They may choose to buy only from businesses with a formal
program for reducing their carbon footprint. Some consumers only support
companies that are in line with their political or social beliefs.
For other consumers, their interests and activities determine the types of
products and services they buy. For example, an avid basketball player may
want to buy basketball shoes and jerseys, while a musician may be
interested in specific instruments. By understanding a segment's values,
attitudes, interests and activities, businesses can market the right products
to them in the right way.
Source: https://smallbusiness.chron.com/basis-segmenting-consumer-
markets-1417.html

II-Targeting

Target Market Selection

Target market represents a group of individuals who have similar needs,
perceptions and interests. They show inclination towards similar brands
and respond equally to market fluctuations.
Individuals who think on the same lines and have similar preferences form
the target audience. Target market includes individuals who have almost
similar expectations from the organizations or marketers.
Obese individuals all across the globe look forward to cutting down their
calorie intake. Marketers understood their need and came up with Kellogg’s
K Special which promises to reduce weight in just two weeks. The target
market for Kellogg’s K Special diet would include obese individuals.
Individuals who sweat more would be more interested in buying perfumes
and deodorants with a strong and lasting fragrance.

How to select the Target Market?

It is essential for the organizations or marketers to identify the set of
people whom they want to target? Marketers must understand the needs
and expectations of the individuals to create its target market.
The target audience must have similar needs, interests and expectations.
Similar products and brands should entice the individuals comprising the
target market.
Same taglines and advertisements attract the attention of the target
audience and prompt them to buy.
To select a target market, it is essential for the organizations to study the
following factors:
 Understand the lifestyle of the consumers
 Age group of the individuals
 Income of the consumers
 Spending capacity of the consumers
 Education and Profession of the people
 Gender
 Mentality and thought process of the consumers
 Social Status
  Kind of environment individuals are exposed to
Always remember you would never be successful if you try to impress
everyone. Be specific.
Identify individuals who show similar characteristics. Put them in one
group to create target market within a broad market.

Let us go through the below example:

Why do people use soaps?
Some would use it against body odour
Some would use it to fight germs and infections
Some for a fair and spotless skin
In the above case the product is same but the needs of the individuals are
different. Consumers have different reasons as to why they use soaps.
Target Audience 1
Against body odour - Soaps with a strong and lasting fragrance.
 Marketing professionals
 Sales Representatives
 People exposed to sun for a longer duration
 Individuals travelling by public transport (Eg:

Target Audience 2
To fight germs and infections - Soaps with medicinal properties
 Individuals working in hospitals, nursing homes and research centres
(Eg: Hamam)
 Individuals working in unhygienic conditions (Eg: Lifebuoy)

Target Audience 3
For a whiter skin - Soaps which improve the skin tone of individuals.
 Teenagers (Eg: Dove)
  College students (Eg: Lux)

Target Audience 4
For a younger looking skin - Soaps which help get rid of wrinkles and fine
lines of ageing
 Individuals between age group 30 – 50 years or above (Eg: Santoor)

CASE STUDY:
Target Market for Soaps (Commercials)
 Beauty – Lux
(https://www.youtube.com/watch?v=5Hbr6h7pG5w )

 Freshness – Liril, Cinthol

(https://www.youtube.com/watch?v=Db9hpqChCZU )
(https://www.youtube.com/watch?v=DWsbs7VIr8w )

 Natural – Medimix, Margo

(https://www.youtube.com/watch?v=jNgVrdrpoDc )
(https://www.youtube.com/watch?v=65QJ6ta3tEQ )

 Baby – Johnson & Johnson, Doy

(https://www.youtube.com/watch?v=Bx4Xc0K4CSI )
(https://www.youtube.com/watch?v=-wZUzHkDILo )

 Cream – Dove, Doy Care (moisturizing)

(https://www.youtube.com/watch?v=PTuFVF7i3xg )

 Medicated – Dettol, Savlon,

(https://www.youtube.com/results?search_query=ad+of+dettol+soap )
(https://www.youtube.com/watch?v=yY6PumWw-pk )

 Glycerin – Pears, Emami

(https://www.youtube.com/watch?v=HQNMxs9IkOQ )

Target Market for Beverages

 Bournvita, Complan, Maltova, Boost - Growing kids
 Soft drinks (Pepsi, Coke) – Teenagers
 Fruit Juice (Real, Tropicana) - Health conscious individuals
 Energy Drinks(Red bull) - Professionals, Office goers
III-Positioning
Positioning is the last stage in the Segmentation Targeting Positioning
Cycle. Once the organization decides on its target market, it strives hard to
create an image of its product in the minds of the consumers. The
marketers create a first impression of the product in the minds of
consumers through positioning.

Positioning helps organizations to create a perception of the products in

the minds of target audience.

Ray Ban and Police Sunglasses cater to the premium segment while Vintage
or Fastrack sunglasses target the middle income group. Ray Ban sunglasses
have no takers amongst the lower income group.
Garnier offers wide range of merchandise for both men and women.
Each of their brands has been targeted well amongst the specific market
segments. (Men, women, teenagers as well as older generation)
 Men - Sunscreen lotions, Deodorant
 Women - Daily skin care products, hair care products
 Teenagers - Hair colour products, Garnier Light (Fairness cream)
 Older Generation - Cream to fight signs of ageing, wrinkles
A female would never purchase a sunscreen lotion meant for men and vice
a versa. That’s brand positioning.

What Is Positioning?
Firms use positioning to create an image of their product or service in their
target customers' minds.
Positioning defines how the brand’s offering is unique: how it
provides a distinct benefit to customers. Businesses use marketing to
communicate their market position to customers and influence their
perception of their products or services.
Marketing establishes the brand identity, influencing consumer
perceptions of its position in the market relative to competitors'
alternatives.
“Positioning is not what you do to a product. Positioning is what you do to the
mind of the prospect. That is, you position the product in the mind of the
prospect.” (Ries & Trout, 2001)
Before determining its position in the market, a firm should decide on a
market segment that they want to target.
This market segment should be profitable — either there are many
customers, or it is a niche in the market that presents an opportunity due to
a lack of competition. This stage is where positioning comes in.
A business must decide how to make their brand as attractive as possible to
this group of customers they want to target. Demographics such as gender,
location and age, and criteria based on consumer behaviour define this
target market.

Developing and Communicating a Positioning Strategy.

Positioning is where a brand sits in the hearts and minds of customers. The
associations consumers hold with brands reflect their position in the
market. Brands control the marketing mix to create a market position, but
it really the customer who decides a brand’s positioning in its mind. This
blog explores positioning as a marketing strategy. The relationship
between positioning and other essential marketing strategies are
discussed, along with five common positioning strategies brands use.
“A position that takes into consideration not only a company’s own
strengths and weaknesses, but those of its competitors as well.” (Ries &
Trout, 2001)