MARKETING MANAGEMENT
WEEK 8 - CONSUMER AND BUSINESS BUYING BEHAVIOR
Lesson Proper
A. Market Segmentation Defined
Market segmentation is the process of dividing a broad consumer or business market into sub-
groups of consumers based on shared characteristics. This strategy allows companies to tailor
their marketing efforts more effectively, aligning their products and messages with the specific
needs and preferences of distinct market segments.
Key Types of Market Segmentation:
1. Demographic Segmentation: Based on measurable statistics such as age, gender,
income, education, and family size.
2. Geographic Segmentation: Based on the physical location of consumers, allowing
businesses to adapt their strategies to local cultures and needs.
3. Psychographic Segmentation: Involves dividing the market based on lifestyle,
personality traits, values, and interests.
4. Behavioral Segmentation: Focuses on consumer behavior related to the product, such
as purchase habits, brand loyalty, and usage rates.
B. Elements of a Distribution Channel
A distribution channel is a chain of businesses or intermediaries through which a good or
service passes until it reaches the final consumer. The main elements of a distribution channel
include:
1. Producers: Individuals or businesses that create goods or services.
2. Intermediaries: Agents, wholesalers, distributors, and retailers who help to move the
products from producers to consumers.
3. Consumers: End-users who purchase and use the products.
C. Advantages of a Distribution Channel
Distribution channels offer several advantages, including:
1. Increased Market Reach: Channels help producers reach wider markets.
2. Efficiency: Intermediaries can provide specialized services that enhance efficiency in
logistics and delivery.
3. Customer Service: Retailers and distributors can provide better customer service and
support.
D. Disadvantages of a Distribution Channel
Despite their advantages, distribution channels can also present challenges:
1. Costs: Each intermediary adds costs that can increase the final price for consumers.
2. Loss of Control: Producers may lose some control over how their products are
marketed and sold.
3. Complexity: More intermediaries can complicate logistics and communication.
E. Types of Distribution Intermediaries
There are several types of distribution intermediaries, including:
1. Wholesalers: Buy in bulk from producers and sell to retailers.
2. Retailers: Sell directly to consumers.
3. Agents/Brokers: Facilitate sales between buyers and sellers without taking ownership
of the goods.
F. Levels of Distribution Channel
Distribution channels can be categorized into different levels:
1. Direct Channel: Producers sell directly to consumers without intermediaries.
2. One-Level Channel: Involves one intermediary, usually a retailer.
3. Two-Level Channel: Involves two intermediaries, typically a wholesaler and a retailer.
Reference: Churchill, G. A., & Iacobucci, D. (2010). Marketing research: Methodological
foundations (10th ed.). Cengage Learning.
G. Levels of Distribution Coverage
Distribution coverage refers to the intensity of distribution and can be classified into
three levels:
1. Intensive Distribution: Products are available in as many outlets as possible.
2. Selective Distribution: Products are available in select outlets that align with the brand
image.
3. Exclusive Distribution: Products are available through only one or a few dealers in a
specific area.
How can the topics above can help AVON improve its sales performance?
1. Targeted Marketing
Know Your Customers: By dividing customers into groups based on age, location,
interests, and buying habits, AVON can create marketing messages that appeal
specifically to each group. For example, they can promote trendy products to younger
customers and anti-aging products to older customers.
Personalized Offers: AVON can design special promotions for different customer
segments, increasing the chances of making a sale.
2. Optimized Distribution Channels
Direct Sales: AVON’s direct selling model allows representatives to connect personally
with customers. By understanding the best ways to reach different groups, they can
improve their selling strategy.
Online Sales: Combining traditional face-to-face selling with online shopping expands
AVON’s reach, making it easier for customers to buy products in a way they prefer.
3. Better Customer Service
Training Representatives: By knowing what different customer segments want, AVON
can train its sales representatives to provide tailored customer service, leading to
happier customers.
Getting Feedback: AVON can set up ways to collect customer feedback to improve
products and services based on what customers say.
4. Efficient Resource Use
Smart Marketing: By focusing on the most profitable customer segments, AVON can
spend its marketing budget wisely to achieve the best results.
Inventory Management: Understanding where products are in demand helps AVON
manage stock better, ensuring that popular items are always available.
5. Building Brand Loyalty
Engaging Locally: By adapting to local preferences and sponsoring community events,
AVON can strengthen its connection with customers.
Personal Touch: Emphasizing values and community connections can help customers
feel more loyal to the AVON brand.
Conclusion
Using market segmentation and effective distribution strategies, AVON can boost sales, reach
more customers, and build lasting relationships. These approaches will not only increase sales
but also help AVON become a stronger brand in the beauty industry.
Reference: Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). Pearson
Education.
Reference: Coyle, J. J., Langley, C. J., Gibson, B., & Novack, R. A. (2016). Supply chain
management: A logistics perspective (10th ed.). Cengage Learning.
Reference: Rosenbloom, B. (2013). Marketing channels (8th ed.). Cengage Learning.
Reference: Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2013). Supply chain logistics
management (4th ed.). McGraw-Hill.
Reference: Kotler, P., & Armstrong, G. (2018). Principles of marketing (17th ed.). Pearson
Education.
Reference: Hutt, M. D., & Speh, T. W. (2013). Business marketing management: A strategic
view of industrial and organizational markets (10th ed.). Cengage Learning
