Customer BehaviorCustomer Behavior

Module ThreeMarket Characteristics

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Module 3

Market Environment

the market environment divided into two broad classes:

market characteristics.

market context:

refers to the man–made market forces (as opposed to the nature

made forces) of the market as a physical place that affect

customer needs and wants. It has three components: economy,

government policy, and technology.

Whereas the geophysical market characterize remain

largely unchanged over a person’s lifetime, the market

context can change rapidly and can result in discontinuity.

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Module 3

Market Characteristics

refer to the physical Characteristics of the surroundings in which customers select, use, and pay for products and services in both household and business markets. There are three physical characteristics of a place: climate, topography, and ecology.

EconomyClimate

Topography Government

Ecology Technology

Figure 1 Environmental Determinants of Customer Behavior

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Module 3

Climate

Climate is the first major component of the geophysical market environment. It consists of temperature, wind, humidity, and rainfall in an area. The patterns of these four elements vary on different locations of the earth, depending on latitude – the distance north or south from the equator.

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Types of climate

There are four basic types of climates:

1. Equatorial: Such as The Amazon valley, central Africa and India

2. Desert: Such as Arabia, Southwest United States and Mexico

3. Temperate Zone: North and South of the equator

4. Polar Zone: North and South pole

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Module 3

Effects of climate

Climate influences all forms of life; it

plays a significant role in the

development of human culture.Climate affects all three areas of people’s basic needs:

• Food• Clothing• Shelter

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Food

Food Consumption patterns differ

dramatically between the tropical and arctic

countries

foods in Mediterranean countries contain

more spices than in arctic countries.

the closer to the equator, the spicier and

hotter the food gets.

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Clothing

There are striking differences in clothing

across different climates, with respect to

materials, design and style.

In warmer countries, the clothing style tends to be

loose and flowing, and color preferences also tend

towards brighter colors and flower patterns: in

comparison, people in colder climates tend to use

darker or basic pastel colors.

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Shelter

Differences can also be found in

customer needs for shelter.

Colder countries utilize wood and

stone as materials compared to

clay and brick in warmer

countries.

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Topography

Another major component of the geophysical

environment is topography, that is the terrain,

altitude, and soil conditions of the market

where customers buy and use the product or

service.

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Regional Preferences

Consumption varies across different regions of

the world, and indeed within a single country.

The regional consumption differences are due

to two factors:

• Geophysical conditions comprising climate,

topography, and ecology and

• Cultural and / or ethnic heritage.

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Regional marketing

To address such differences, marketers may use a

strategy of regional marketing, the practice of

adapting marketing programs according to

segmentation based on geographic differences

among customers.

This is recent strategy, and a sharp departure from

the mass marketing practices of the companies

that promote national brands.

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Ecology

refers to the natural resources and the delicate

balance and interdependence among vegetation,

animals, and humans. It also includes concepts

related to the food chain.

affects customer behavior by making certain

market options less convenient or less attractive,

and by customers exercising their environmental

values, which then bear upon their market choices.

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Market choices become less attractive, in

turn, by two mechanisms:

• The deteriorating ecology makes certain

modes of consumption less convenient or

less satisfying

• Government disincentives make

ecologically undesirable behaviors

personally more costly.

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Business response to environmentalism

Businesses from a variety of industries are responding

to a customer demand for environmental friendly

products.

environmental marketing, which refers to the marketing

of products and services and in a manner that attempts

to minimize the damage to the environment.

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Marketing Strategy Implications

Climate

Topography

EcologyAlters Suitability ofProducts/Services

Preservation as a 'Value'For Customer Groups

Spatial VariationsTemporal Variations

Regional ConsumptionVariations

Users Buyers

Payers

Users Buyers

Payers

Users Buyers

Payers

Figure 2 Marketing Strategy Implications of the Geophysical Environment

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Relationship between Market Characteristics and Customer Behavior

Characteristic

Overall Impact

User Payer Buyer Marketin

g response

Climate Needs vary among climates and according to seasonal changes within a climate

Certain types of food, clothing and shelter are needed.Weather- related products are needed.Suitable packaging is required

Out- of- place products cost more.Out - of – season products cost more.

Climate –appropriate storage facilitates affect accelerated buying.Bad weather may require postponement of purchase.Pick up/ delivery services may be needed in bad weather

Regional marketingSeasonal marketing

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Topography

Regional consumption variations

Products adapted to local conditions (e.g. flood insurance, bottled water are needed).Available means of transportation may be limited

Special –needs products must be budgeted for.

Transportation difficulties may require minimizing trips, buying in bulk, or delegating purchase to others.

Regional marketing

Ecology Altered suitability of products/ services

Pollution control products are neededEnvironmentally friendly products/ services are

Ecologically friendly products may cost more

Ecologically friendly products may require a special search effort.

Green marketingTargeting environmentallyConscious

Figure 3 Relationship between Market Characteristics and Customer Behavior