Buyer Behavior, TALC, and Segmentation

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Buyer Behavior, TALC, and Segmentation
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Customer decision process
ProblemRecognition
InformationSearch
AlternativeEvaluation
Choice andPurchase
Post-purchaseExperience
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Factors in B2B Buying Behavior

• Process
• Stages see diagram below
• Players roles in Buying Center
• gatekeepers, users, influencers, deciders,
  purchasers

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More Factors in B2B Buying Behavior

• Needs
• Organizational needs
• Individual needs
• role needs
• personal needs
• Nuances
• Variations in behavior based on industry norms,
  company culture, personal preferences and
  idiosyncrasies

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Process Model
Organizational Needs Clear, concise,
tractable Appropriate, affordable, adaptable ch
oice, speed, risk handled
Individuals Needs info, time, design
assistance info, convenience, assurance
Define Problem
Define Solution
Acquire Solution Provider
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Process Model
Organizational Needs speed, integration,
easy ease, speed, comprehensive user friendly,
effective, maintain-able
Individuals Needs execution assistance
knowledge, learning envrnmt easy to use, easy
to fix
Develop solution
Install, test, train
Operate solution
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Process Model
Organizational Needs effective,
efficient information
Individuals Needs recognition communication
End Result -- reach objectives
Evaluate Outcomes
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Some Factors Influencing Process

• Newness / Routine-ness Familiarity
• Volatility of environment
• Importance of end result
• Complexity
• Cost Budget
• Risk
• Politics

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AIDA

• Awareness prospective customers know that the
  company or product exists
• Interest prospective customers think they might
  have a need for your product
• Desire prospective customers know they have a
  need and develop a feeling of wanting to acquire
  the product
• Action prospective customers obtain the product
• Customers stages Cognitive, Affective,
  Conative,
• But it can happen in other sequence, too,
  depending on the situation and product

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Technology Adoption Life Cycle
New Users
conservatives
CHASM
pragmatists
Skeptics - laggards
technophiles
visionaries
Time
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Markets in the TALC

• Early Market
• Technophiles
• Visionaries
• Chasm
• Beachhead and Bowling Alley
• Tornado
• Main Street

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Marketing in the Early Market

• Technophiles want to try the new toys dont
  pay much
• Visionaries want to get a competitive
  advantage will pay get a customized solution

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Marketing to Cross the Chasm and enter the
Bowling Alley

• Pragmatists want a seamless adoption need
  reassurance of whole product
• Find a niche that needs the solution real badly
• Whole product is usually a simplified version,
  tailored to the niche
• Must be reference-able to next bowling pin
• Market may never reach tornado company may never
  want to reach a tornado

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Marketing in the Tornado

• Everybody wants it buyer shifts from economic
  buyer to IT buyer
• Market wants a leader they tend to create the
  gorilla
• Just ship it back away from service
• Market structure gorilla, chimps, monkeys
  (king, princes, serfs)

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Marketing on Main Street

• Last pragmatists conservatives
• They want specific features, lower prices
• Emphasize right features
• Trial and error, not market research
• Drive down costs and price

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Market evolution
Later Market
Early Market
Niche Extensions
High Qual
Special
Performance seg
Cost-oriented segment
Low Price
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SEGMENTATION MAIN IDEAS

• HOMOGENEOUS GROUPS
• DIFFERENCES BASED ON VALUE SOUGHT
• IDENTIFIABLE
• REACHABLE

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SEGMENTATION USING PREFERENCE MAPS
EASE OF USE
4
5
3
HIGH RELIABILITY
AFFORD- ABILITY
2
6
1
SPECIALIZATION OF FEATURES
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SEGMENTATION USING PREFERENCE MAPSW/3rd Dimension
EASE OF USE
UPGRADE ASSURANCE
HIGH RELIABILITY
AFFORD- ABILITY
CUTTING EDGE TECHNOLOGY
SPECIALIZATION OF FEATURES
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Choosing Target Segments

• How attractive are the various segments?
• size and growth rates
• identifiable reachable
• match with your strengths
• underserved by competition
• Estimate sales and profits from each of the most
  attractive
• Target the most attractive can you reach your
  goals?
• If not, add next most attractive, etc.