CHAPTER 2 MARKETS MARKETS Definition of Markets Consumer

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CHAPTER 2 MARKETS

CHAPTER 2 MARKETS

MARKETS • Definition of Markets • Consumer Market Segments • Gray Markets

MARKETS • Definition of Markets • Consumer Market Segments • Gray Markets

DEFINITION OF MARKETS • Buyers • Ability to Buy • Willingness to Buy

DEFINITION OF MARKETS • Buyers • Ability to Buy • Willingness to Buy

BUYERS • Consumer Markets • Business Markets

BUYERS • Consumer Markets • Business Markets

CHARACTERISTICS OF MARKETS Consumer Business Many buyers Few buyers Smaller purchases Larger purchases Direct

CHARACTERISTICS OF MARKETS Consumer Business Many buyers Few buyers Smaller purchases Larger purchases Direct demand Derived demand Geographically Dispersed Geographically concentrated

DERIVED DEMAND EXAMPLES § Intel § U. S. Steel § Component parts

DERIVED DEMAND EXAMPLES § Intel § U. S. Steel § Component parts

ABILITY TO BUY § Income § Credit/Debit § Bartering

ABILITY TO BUY § Income § Credit/Debit § Bartering

CONSUMER INCOME • Gross Income – Total income before any deductions • Disposable Income

CONSUMER INCOME • Gross Income – Total income before any deductions • Disposable Income – Total income minus taxes • Discretionary Income – Total income minus taxes and basic needs

U. S. RETAIL SALES BY PAYMENT Store Payment 1995 2010 Cash 60% 20% Checks

U. S. RETAIL SALES BY PAYMENT Store Payment 1995 2010 Cash 60% 20% Checks 30% 0% Credit/Debit Cards 10% 100% 80% 100%

AVERAGE CREDIT CARD DEBT (per U. S. Household) 1996 $5, 900 2001 $8, 2008

AVERAGE CREDIT CARD DEBT (per U. S. Household) 1996 $5, 900 2001 $8, 2008 $10, 600 2014 ?

CREDIT/DEBIT PROBLEM • Student Loans • NINJA Loans • Overdraft Fees

CREDIT/DEBIT PROBLEM • Student Loans • NINJA Loans • Overdraft Fees

NINJA MORTGAGE LOANS IN CALIFORNIA • No income • No job • No assets

NINJA MORTGAGE LOANS IN CALIFORNIA • No income • No job • No assets

PREPAID DEBIT CARDS 2009 29 Billion 2014 90 Billion

PREPAID DEBIT CARDS 2009 29 Billion 2014 90 Billion

BARTERING Negotiated exchange of products and services for other products or services instead of

BARTERING Negotiated exchange of products and services for other products or services instead of cash or credit

BARTERING EXAMPLES • Radio ads for Astros tickets • Bartering on E-bay • Showrooming

BARTERING EXAMPLES • Radio ads for Astros tickets • Bartering on E-bay • Showrooming Bartering

ULTIMATE BARTERING BY CALIFORNIA TEEN Started with a cell phone Ended with a Porsche

ULTIMATE BARTERING BY CALIFORNIA TEEN Started with a cell phone Ended with a Porsche automobile

WILLINGNESS TO BUY • Consumer Spending • U. S. Beverage Market • U. S.

WILLINGNESS TO BUY • Consumer Spending • U. S. Beverage Market • U. S. Favorite Sport

CONSUMER SPENDING Category Examples Durable Goods Furniture, TV Nondurable Goods Food, Beer Services Travel,

CONSUMER SPENDING Category Examples Durable Goods Furniture, TV Nondurable Goods Food, Beer Services Travel, Education

U. S. BEVERAGE MARKET Beverage 1960 2000 Milk 34% 13% Beer 14% 20% Soft

U. S. BEVERAGE MARKET Beverage 1960 2000 Milk 34% 13% Beer 14% 20% Soft Drinks 11% 36%

U. S. FAVORITE SPORT Time Pro Football Pro Baseball 1985 24% 23% 2010 30%

U. S. FAVORITE SPORT Time Pro Football Pro Baseball 1985 24% 23% 2010 30% 16%

CONSUMER MARKET SEGMENTS • Geographic • Demographic • Lifestyle • Cultural/Racial

CONSUMER MARKET SEGMENTS • Geographic • Demographic • Lifestyle • Cultural/Racial

GEOGRAPHIC MARKET SEGMENTS • Cities • Rural Areas • Suburbs

GEOGRAPHIC MARKET SEGMENTS • Cities • Rural Areas • Suburbs

DEMOGRAPHIC MARKET SEGMENTS • Age • Income • Sex • Education

DEMOGRAPHIC MARKET SEGMENTS • Age • Income • Sex • Education

LIFESTYLE MARKET SEGMENTS • Harley-Davidson Motorcycles for Women • Tattoos • Condos for singles

LIFESTYLE MARKET SEGMENTS • Harley-Davidson Motorcycles for Women • Tattoos • Condos for singles

CULTURAL/RACIAL MARKET SEGMENTS • African American • Hispanic • Asian • Gay

CULTURAL/RACIAL MARKET SEGMENTS • African American • Hispanic • Asian • Gay

AFRICAN AMERICAN ENTREPRENEURS • George Foreman • Beyonce Knowles • Jay-Z • Oprah Winfrey

AFRICAN AMERICAN ENTREPRENEURS • George Foreman • Beyonce Knowles • Jay-Z • Oprah Winfrey

Hispanic Rice Users Cuban Puerto Rican Mexican White Rice Mexican Rice Black Beans Pinto

Hispanic Rice Users Cuban Puerto Rican Mexican White Rice Mexican Rice Black Beans Pinto Beans Crackers None Tortillas

GROWTH OF IMMIGRANT ENTREPRENEURS IN HOUSTON • Inexpensive real estate • No zoning regulations

GROWTH OF IMMIGRANT ENTREPRENEURS IN HOUSTON • Inexpensive real estate • No zoning regulations • Relatively low labor costs • Affordable housing

GRAY MARKETS Buying in low-price markets and selling in high-price markets (concept of arbitrage)

GRAY MARKETS Buying in low-price markets and selling in high-price markets (concept of arbitrage)

GRAY MARKET EXAMPLES • Wine • Prescription Drugs • College Textbooks

GRAY MARKET EXAMPLES • Wine • Prescription Drugs • College Textbooks

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CHAPTER3 CONSUMER MARKETS AND CONSUMER BUYING BEHAVIOR ConsumerCHAPTER3 CONSUMER MARKETS AND CONSUMER BUYING BEHAVIOR Consumer
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CHAPTER 7 THE CONSUMER The Consumer A consumerCHAPTER 7 THE CONSUMER The Consumer A consumer
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Consumer Choice Stage 5 Commerce Consumer Choice ConsumerConsumer Choice Stage 5 Commerce Consumer Choice Consumer
Consumer Culture Theoretics Consumer Culture Definitions Consumer cultureConsumer Culture Theoretics Consumer Culture Definitions Consumer culture
Consumer Behavior Consumer behavior research Consumer Behavior ResearchConsumer Behavior Consumer behavior research Consumer Behavior Research
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Consumer Profiling Consumer Profiling Consumer Profiles the kindConsumer Profiling Consumer Profiling Consumer Profiles the kind
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Consumer Behavior Memory Consumer Memory Outline Consumer BehaviorConsumer Behavior Memory Consumer Memory Outline Consumer Behavior
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Consumer preferences and utility Modelling consumer preferences ConsumerConsumer preferences and utility Modelling consumer preferences Consumer
Consumer Behavior Value Consumer Behavior Consumer behavior isConsumer Behavior Value Consumer Behavior Consumer behavior is
Consumer Choice Consumer Decisions Stage 5 Commerce ConsumerConsumer Choice Consumer Decisions Stage 5 Commerce Consumer
Consumer Insight consumer consumer n 1 a personConsumer Insight consumer consumer n 1 a person