1.

The figure above is about structure of flows in modern exchange economy. Here are the
explanation.

There are 5 markets on this figure:

a. Resource markets
Raw material markets, labour markets, money markets like financial institutions,
stock market, etc.
b. Manufacturer markets
Organizations manufacturing products
c. Intermediary market
Wholesalers, retailers, distributors, etc.
d. Consumer markets
General public to whom the goods are sold
e. Goverment markets
Central goverment, state goverments, goverment agencies

Manufacturers go to resource markets (raw material markets, labor markets, money

markets), buy resources and turn them into goods and services, and sell finished products to
intermediaries, who sell them to consumers. Consumers sell their labor and receive money with
which they pay for goods and services.
 The government collects tax revenues to buy goods from resource, manufacturer, and
intermediary markets and uses these goods and services to provide public services. Each
nation’s economy, and the global economy, consists of interacting sets of markets linked
through exchange processes.

On the other hand, marketers often use the term market to cover various grouping of
customers. They view the sellers as constituting the industry and the buyers as constituting the
market. They talk about need markets, product markets, demographic markets and geographic
markets or they extend the concept to cover other markets, such as voter marketers, labor
markets, and donor markets. Sellers and buyers are connected by four flows. The sellers send
goods, services and communication (ads, direct mail) to the market; in return they receive
money and information (attitudes, sales data). The inner loop shows an exchange of money for
goods and services; the outer loop shows an exchange of information.

The following are major types of key customer market.

a. Consumer Markets
Companies selling mass consumer goods and services such as juices, cosmetics,
athletic shoes, and air travel spend a great deal of time establishing a strong brand
image by developing a superior product and packaging, ensuring its availability, and
backing it with engaging communications and reliable service

b. Business Markets
Companies selling business goods and services often face well-informed professional
buyers skilled at evaluating competitive offerings. Business buyers buy goods to make
or resell a product to others at a profit. Business marketers must demonstrate how
their products will help achieve higher revenue or lower costs. Advertising can play a
role, but the sales force, the price, and the company’s reputation may play a greater
one.

c. Global Markets
Companies in the global marketplace must decide which countries to enter; how to
enter each (as an exporter, licenser, joint venture partner, contract manufacturer, or
solo manufacturer); how to adapt product and service features to each country; how to
price products in different countries; and how to design communications for different
cultures. They face different requirements for buying and disposing of property;
cultural, language, legal and political differences; and currency fluctuations. Yet, the
payoff can be huge.

d. Nonprofit and Governmental Markets - Companies selling to nonprofit organizations

with limited purchasing power such as churches, universities, charitable
organizations, and government agencies need to price carefully. Lower selling prices
affect the features and quality the seller can build into the offering. Much government
purchasing calls for bids, and buyers often focus on practical solutions & favor the
lowest bid in the absence of extenuating factors.

2. Customer value is the customer's perception and evaluation of how useful the relationship
with a supplier is in terms of benefits received and sacrifices made
Loyalty is a deeply held commitment to re-buy or re-patronize a preferred product or service
in the future despite situational influences and marketing efforts having the potential to cause
switching behavior

Satisfaction is a person’s feelings of pleasure or disappointment that result from comparing a

product’s perceived performance (or outcome) to expectations.

3. When buyers are making purchase decisions. They actually passes several stages that make
them buy an item. This stage is called stage in the buying decision process. The stages consist
of:

a. Problem / Need recognition

Problem or Need Recognition is the first stage of the buying decision process. It appears
when the consumer recognizes a perceptible and big enough difference between the actual
level of satisfaction of a certain need and the amount of satisfaction that he longs for. The
existence and the manifestation of the need can be caused by internal or by external stimuli.

b. Search for product information

Once the consumer has recognized the existence of an unsatisfied need, the next phase of the
buying decision process is information search and the identification of alternatives
Information is fundamental for the future buying decision.

c. Product evaluation

After information research and the identification of possible alternatives, the consumer goes
to the next phase of the decision buying process, the mental evaluation of the existent
alternatives. It is now when the consumer processes information to arrive at brand choices.
Consumers do not use a simple and single evaluation process in all buying situations. The
degree of complexity of the evaluation process is influenced by various factors like
consumer’s experience, the importance of service, the cost of making a bad decision, the
complexity of evaluated alternatives, the urgency.

d. Purchase decision

In this phase, all stages previously mentioned become concrete elements. In the evaluation
stage, the consumer ranks brands and forms purchase intentions. Generally, the consumer’s
purchase decision will be to buy the most preferred brand, but at least two factors can come
between the purchase intention and the purchase decision:

- The attitudes of others

- The unexpected situational factors

e. Post purchase behaviour

In this phase, the consumer analyses the extent to which his purchase decision was good

or not. The answer lies in the relationship between the consumer’s expectations and the
product’s perceived performance.

For example, a new student named Budi wants to buy a laptop that suits her for her college
needs.

Stage 1 – Problem / Need Recognition

At this stage, Budi realizes that he needs a laptop that can support his activities as a student in
doing the tasks assigned to him. Budi also wanted to buy a new laptop.

Phase 2 - Search for product information

At this stage Budi starts looking for a suitable laptop for him. Budi started looking at laptops
in stores at the mall. In addition Budi also looking for a suitable laptop for him on the
internet. Budi also asked his friends for recommendations on laptops with good quality.

Stage 3 - Product evaluation

Budi began to evaluate the laptop he was looking for. Budi looks for a laptop that matches the
criteria. Budi see from price, specification, brand, design, and quality of service center.

Stage 4 - Purchase decision

Budi has made the choice of what laptop he will buy. Budi decided to buy a laptop Asus
X454Y because it matches the criteria he set previously. Budi chose to buy the laptop offline
because it feels safer than buying it online. Budi bought the laptop at Citra Store located at
BEC because of its friendly service and attractive bonus.

Stage 5 - Post purchase behaviour

After some time using it, Budi was satisfied with the performance of the laptop. The laptop
he bought has fulfilled his expectations and suits his needs. Budi thought that he would buy a
laptop with the same brand in the future and recommend the laptop to his friends.

4.

The figure above explain about steps in Segmentation, Targeting, and Positioning

a. Market Positioning
Setting the competitive positioning for the product, and creating a detailed marketing
mix to achieve the position. Market positioning is the process of formulating
competitive positioning for a product and a detailed marketing mix. Marketers must
plan how to present the product to the consumer.

b. Market Targeting
Evaluating each market segment’s attractiveness, and selecting one or more of the
market segments to enter. Market targeting is the process of evaluating each market
 segment's attractiveness and selecting one or more segments to enter. Given effective
market segmentation, the firm must choose which markets to serve and how to serve
them.
c. Market Segmentation
Dividing a market into distinct groups of buyers with each group having different
needs; characteristics; or behaviour, which might require the development of separate
products or marketing mixes for each group. Market segmentation is the process of
dividing a market into distinct groups of buyers who might require separate products
or marketing mixes. All buyers have unique needs and wants. Still it is usually
possible in consumer markets to identify relatively homogeneous portions or
segments of the total market according to shared preferences, attitudes, or behaviors
that distinguish them from the rest of the market. These segments may require
different products and/or separate mixes.

Markets consist of buyers, and buyers differ in one or more ways such as:

- In their wants; resources; location; buying attitudes; and buying practices, and in their
preferences for particular buying channels such as ordering by mail; by phone; via the
Internet; or at a physical location

- Because buyers have unique needs and wants, each buyer is potentially a separate market. A
seller could develop a separate marketing program for each buyer, this is not usually a
practical option. Viable only for very high value items. Segmentation is the process of
identifying specific characteristics of individual consumers or business firms, which are then
used to divide a total market into meaningful and ‘targetable’ segments. The more specific
the segment, the greater the possibility of developing an effective marketing mix

Steps in Segmentation, Targeting, and Positioning

6. Developing marketing mix for each target segment

5. Develop Positioning for Each Target Segment

4. Select Target Segment(s) Market Targeting

3. Develop Measures of Segment Attractiveness

2. Develop Profiles of Resulting Segments Market Segmentation

1. Identify Bases for Segmenting the Market