chapter 12: understanding marketing processes and consumer behavior 1
TRANSCRIPT
CHAPTER 12: UNDERSTANDING
Marketing Processes and Consumer Behavior
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• Explain the concept of marketing.• Explain the purpose of a marketing plan
and identify the four components of the marketing mix.
• Explain market segmentation and show how it is used in target marketing.
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• Explain the purpose and value of marketing research.• Describe the key factors that Influence
the consumer buying process.• Describe the international and small-
business marketing
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What’s in It for Me?
• Why does marketing matter to you?– By grasping this chapter’s presentation of
marketing methods and ideas, you’ll benefit in two ways:• You’ll be better prepared to use marketing in
your career as both employee and manager• You’ll be a more informed consumer with
greater awareness of how businesses use marketing to gain your purchases
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Discussion
What is marketing?Can you see marketing
elements around you? Give example.
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What Is Marketing?• Marketing –“A set of processes for creating,
communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders” (AMA)• Finding a need and fulfilling it with a
new product or service.
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What Is Marketing?“Marketing is the process of planning
and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
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What Is Marketing?• Providing Value and Satisfaction–Limited financial resources force us
to be selective. –Consumers buy products that offer
the best value when it comes to meeting their needs and wants.
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What Is Marketing? (cont’d)• Value and Benefits–Value compares a product’s
benefits with its costs.–Benefits include not only the
functions of the product but also the emotional satisfaction associated with owning, experiencing, or possessing it.–Value = Benefits/Costs
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Value and Utility 1.Form utility: Designing products customers
want.2.Time utility: Creating sales contracts that
specify when the product will be delivered.3.Place utility: Creating contracts that specify
where the products will be delivered to the consumer.
4.Ownership utility: Arranging to transfer product ownership to customers by providing and setting sales prices, setting payment terms and providing ownership documents.
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Discussion What is the difference between needs and
wants? A need, if we refer back to Maslow’s Hierarchy
of Needs, is something the consumer needs in order to live or function in his life or career. This could mean food, shelter, clothing, transportation, shoes, etc.
What separates consumer need from want is money. Here is an example: I need a coat because it is cold outside. I want a fake fur coat that will look trendy in the clubs.
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Goods, Services, and Ideas–Consumer goods: Tangible goods that
consumers may buy for personal use• Consumer marketing is used to inform
people about these goods.–Industrial goods: Physical items used
by companies to produce other products• Industrial marketing: used to inform
companies about these goods.
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Goods, Services, and Ideas–Services: Products with intangible
(nonphysical) features• Service marketing is used to inform
the public about these intangibles.• Relationship Marketing–Emphasizes building lasting
relationships with customers and suppliers: results, customer satisfaction and retention.
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Relationship Marketing
• It is important to record any information you can obtain about your customers’ purchasing habits. • Data Warehousing and Data Mining
are used for Building Customer Relationships
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Relationship Marketing
–Data warehousing: The compiling and storage of consumer data–Data mining: Automating the massive
analysis of data by using computers to sift, sort, and search for previously undiscovered clues about what customers look at, react to, and how they might be influenced
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The Marketing EnvironmentMarketing strategies are not determined unilaterally
by any business- they are influenced by powerful forces. They include:
– Political-legal environment
– Sociocultural environment
– Technological environment
– Economic environment
– Competitive environment• Substitute products
• Brand competition
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What Is Marketing? (cont’d)• Strategy to develop The Marketing
Mix –Marketing Plan•A detailed strategy for focusing
marketing efforts on consumer needs and wants
–In planning business develops the Marketing Mix: 4 Ps
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What Is Marketing? (cont’d)• Strategy to develop The Marketing
Mix • Product: Marketing begins with a
product -a good, a service, or an idea designed to fill a consumer need or want. Meeting consumer needs is a constant challenge,
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What Is Marketing? (cont’d)• Strategy to develop The Marketing
Mix • Product differentiation is the
creation of a feature or image that makes a product differ enough from competitive products to attract consumers.
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What Is Marketing? (cont’d)• Strategy to develop The Marketing
Mix • Product: Differentiating the product,
positioning it in the marketplace, packaging the product and providing a product warranty. Developing a product is a challenge, why?
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What Is Marketing? (cont’d)• Strategy to develop The Marketing
Mix • Price: Selecting the best pricing
strategy at which to sell a product.Price include: cost + profit margin.Price has to be convenient to
customer. Price should be competitive.
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What Is Marketing? (cont’d)• Strategy to develop The Marketing Mix –Marketing Mix: 4 Ps• Place: Distributing a product through the
proper channels.• Inventory and warehousing control and
use of transportation are part of distribution.
• Many manufacturers sell goods to other companies , which in turn distribute them to retailers. Others sell directly to major retailers or direct to final consumer.
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What Is Marketing? (cont’d)• Strategy to develop The Marketing
Mix –Marketing Mix: 4 Ps
• Promotion: Communicating information about a product to its potential consumers. This includes advertising, sales promotion, public relations, personal selling, etc.
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Four Cs:
A. The sellers' four Ps are a mirror image of the buyers' four Cs: customer solution (product), customer cost (price), customer convenience (place), and customer communication (promotion).
B. Together, these elements are known as the marketing mix.
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Discussion
Give examples about Advertising, sales promotion
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Group work
I need to buy Toyota car , I prefer silver color. The problem I don’t have enough money to pay. I may borrow from bank, it will cost me 20000$. In addition, I am unsure where to buy from, though I heard about the product from radio.
Question: identify the marketing mix .
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Target Marketing and Market Segmentation
• Target Markets: Groups of people with similar wants and needs who can be expected to show interest in the same products.
• Selecting the target group is first step in marketing strategies. Why?
• The target marketing requires market segmentation.
e.g., Hyundai offers automobiles with various features at various prices.
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Target Marketing and Market Segmentation
• Market Segmentation–Dividing a market into categories
of customer types or “segments”. –Market segment must share
common traits that affect their purchasing decisions.
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Segmentation variables:1.Geographic: Areas of a country or region
where buyers are located. E.g., Urban areas do not need agricultural equipments. Also Sailboats sell better along coasts.
2.Demographic: Statistical information about age, income, sex, race, education, etc.
3.Psychographic: Values, attitudes and lifestyles of a consumer or group of consumers, e.g., family size affect size and type of purchasing.
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PRODUCT POSITIONINGA. PRODUCT POSITIONING : The establishment of an
easily identifiable image of a product in the minds of consumers.
B. Product positioning is based on the important attributes that consumers use to assess the product. For example, a low-priced car like a Ford Focus tends to be positioned on the basis of economy,
C. while a Porsche is positioned in terms of high performance.
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TABLE 11.1 Demographic Variables
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Case studyI decided to buy a suit for my self. I wondered
where to go. At the end I went to men’s wear shop. The shop specialized in selling suits for men only, specially matured of age over 20 years.
Question: identify the segmentation categories in this case.
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Market ResearchA. Which is the study of what buyers need
and how best to meet those needs, can address any element In the marketing mix.
B. Market research can greatly Improve the accuracy and effectiveness of market segmentation.
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The Research ProcessA. Study the current situation. What is the
need and what Is currently being done to meet It.
B. Select a research method. In choosing a method, marketers must bear in mind the effectiveness and costs of different methods. The four basic types : observation, survey, focus groups, and experimentation.
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The Research ProcessA. Collect data. Secondary data are information
already available as a result of previous research by the firm or other organizations. Primary data-new research by the firm or its agent&-must be obtained.
B. Analyze the data. C. Prepare a report. This report normally includes a
summary, methodology and findings, various alternative solutions (where appropriate), and recommendations.
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Understanding Consumer Behavior
•It is important that we understand how and why consumers behave the way they do when making purchases.•There are four influences on consumer
behavior. These include:1.Psychological influences: These influences
can include a person’s values, attitudes ability to learn.
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Understanding Consumer Behavior1.Personal influences: These influences can
include personal preferences based on personality, life style, economic status.
2.Social influences: These influences can include social status, having the latest or greatest version of an item. E.g., influence of reference groups such as friends•Cultural influences: These influences can include
behaviors or beliefs specific to one’s cultural heritage. E.g., the cultural ranking of groups according to criteria such as background, occupation, religion and income
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Understanding Consumer Behavior
• Brand Loyalty–Consumers who regularly purchase
products because they are satisfied with their performance
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FIGURE 11.1 The Consumer Buying Process
• Problem\Need Recognition• Information Seeking• Evaluation of Alternatives
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Organizational Marketing and Buying Behavior
• Organizational Markets 3 types:–Industrial Markets•Businesses that buy goods to be converted into other products or that are used up during production
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Organizational Marketing and Buying Behavior
• Organizational Markets 3 types:–Reseller Markets• Intermediaries, including
wholesalers and retailers, that buy and resell finished goods
–Government and Institutional Markets• Federal and state governments•Nongovernmental organizations
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Organizational Marketing and Buying Behavior (cont’d)
• Organizational Buying Behavior–Differences in Buyers
• Organizational buyers are professionals who negotiate the buyer-seller agreement (purchase terms)–Specialists in purchasing a line of items–Experts about the products purchased
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Group work
Draw example on Government and Institutional Markets in Gaza
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Organizational Buying Behavior•The differences in buyer-seller relationships in
organizational markets versus consumer markets include the following:
1.Organizational buyers usually make frequent purchases.
2.Organizational buyers form enduring long-term relationships.
3.Buyers and sellers in organizational markets may work closely.
4.Organizational marketing also puts a heavy emphasis on personal selling.
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Discussion
Who can describe the buying behavior of supermarket in relation with a wholesale.
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What Is a Product?• Product Defined– A value package that provides a bundle of
benefits and features to satisfy the needs and wants of customers
• Product Features– Tangible and intangible qualities built into a
product
• Benefits– The tangible and intangible outcomes associated
with acquisition or use of a product
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TABLE 11.2 Categories of Consumer Products
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TABLE 11.3 Industrial Products
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The Product Mix• Product Mix– The group of products (consumer, industrial,
or both) that a company makes available for sale. E.g., IUG products.
• Product Line–A group of products that are closely related
because they function in a similar manner or are sold to the same customer group who will use them in similar ways.
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The Product Mix• Multiple (or Diversified) Product
Lines–Allow a company to grow rapidly and
can help to offset the consequences of slow sales in any one product line.–Please give an example of a
product line for a consumer products company
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Developing New Products• The New Product Development Process– Research and development (R&D)• Departments for exploring new product
possibilities– Product mortality rates• Few product ideas (1 in 50) actually reach the
market– Speed to market• Responding to customer demand or market
changes by introducing new products to the market ahead of competitors
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FIGURE 11.2 Products in the Life Cycle: Stages, Sales, Cost and Profit
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Identifying Products–Branding Products• Branding–A process of using symbols to
communicate the qualities of a particular product made by a particular producer»Signals uniform quality and
stimulates consumer recall. E.g., K cheeze, coca cola.
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Identifying Products
• Branding Products•Consumer preference for a
particular product –Brand awareness• The brand name that comes first to
mind when consumers consider a particular product category
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Identifying Products (cont’d)• Gaining Brand Awareness: Requires
several methods of promotion including:–1 Product placement•A promotional tactic for brand
exposure in which characters in television, film, music, magazines, or video games use a real product that is visible to viewers. E.g., when people drinking coca cola during football game TV watching.
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Gaining Brand Awareness• Requires several methods of promotion
including:–2 Buzz marketing• A form of word-of-mouth marketing. They
give sample to people and ask them to tell friends about it.–3 Viral marketing• Form of Buzz marketing that relies on
Internet to spread information like a “virus” from person-to-person about products and ideas
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Packaging Products–Purposes of packaging
1.Reduce the risk of damage, breakage, or spoilage
2.Increase the difficulty of stealing small products
3.Serves as an in-store advertisement that makes the product attractive
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Packaging Products–Purposes of packaging
1.Displays the brand name
2.Identifies features and benefits
3.Enhances the utility of the product features and benefits
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The International Marketing Mix1.International products: Products sold
internationally need to adapt to the needs of consumers in the foreign market.
2.International pricing: There will probably be higher transportation and selling costs abroad, but pricing cannot be raised just for this reason. A marketer needs to take into account the income of the consumers, currency exchange rates and competitive pricing.
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The International Marketing Mix1.International distribution: access to a
distribution network in foreign markets. For example, in many parts of the world the super or hyper market concept is new and only exists within major cities. How will the company distribute and sell its products in the outlying/remote areas of a country?
2.International promotion: Promotion requires cultural sensitivity and hence adjustments to the marketing mix.
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Small Business and the Marketing Mix• Small-Business Products–Product failures due to lack of market
potential for products or marketing to the wrong target market segments
• Small-Business Pricing– Losses due to pricing errors resulting from
underestimating operating expenses
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Small Business and the Marketing Mix• Small-Business Distribution–Poor location choice fails to attract
customers• Small-Business Promotion–Careful promotion can reduce
expenses. It requires budget.
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