mark1012 week 4 lecture notes

8/12/2019 Mark1012 Week 4 lecture notes

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MARK1012: Marketing Fundamentals Lecture 4: MOHAMMED RAZZAQUE

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MARK1012Lecture 4

Mohammed A Razzaque

IntroductiontoMarketing

Strategy

MarketingEnvironment

MarketingResearch

ConsumerandusinessMarket

Segmentation

And Tar getin g

SchoolofMarketing,UNSW:Razzaque

Lecture Objectives1. Providingabasicunderstandingofconsumerand

businessmarketbehaviour.a. Outlinethemajorcharacteristicsaffectingbehaviourin

thesemarkets,andlistfactorsthatinfluencethem.

b. Explainthebuyingdecisionprocessinthesemarketsandcompareandcontrastthem.

c. Identify

and

define

the

various

consumer

buying

roles.

2. Illustratedifferenttypesofbuyingdecisionbehaviour.

3. Explainthebasicsofthebuyerdecisionprocessfornewproducts.

a. Identifystagesintheadoptionprocess

4. Identifythedifferencesbetweenbusinessmarkets,institutionalmarketsandgovernmentmarkets.

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AModelofConsumerBuyingBehaviour

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The consumer marketAll the individuals and households who buy or acquire goods and services

for personal consumption.


Cultural

Culture

Subculture

Social Class

EXTERNALINFLUENCE Social

Household typeReference groupsRoles & status

PsychologicalMotivation

PerceptionLearning (memory)Beliefs & attitudesPersonality &self-concept

PersonalAge & lifecycle stageOccupationEducationEconomic situation

Buyers responsesoProduct service & category selectionoBrand selectionoReseller selectionoPurchase timing & repurchase intervalsoPurchase amount

Marketing programsMarketing objectivesMarketing strategyMarketing mix

EnvironmentalinfluencesEconomicTechnologicalPolitical

Consumer

BUYER DECISIONPROCESS

Lifestyle

How consumers make their choices among products depends on the following factors

INTERNALCHARACTERISTICS

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CULTURAL FACTORSCulturereferstoThesetofbasicvalues,perceptions,

wantsandbehaviourslearnedbyamemberofsociety

fromfamilyandotherimportantinstitutions.

Amajorinfluenceonourwantsandgeneralbehaviour.

Marketersneedtoidentifyculturalshifts,ortrends,thatmay

impactondemandfortheirproductsandservices.

Examples:thetrendtowardhealthierlifestyles,andincreasing

concernforenvironmentalissues.

Globalmarketersmustadapttothecultureanddevelop

marketingstrategyaccordingly.

Culturalgroups>>Subcultures

Socialclass>>Relativelypermanentandordered

divisionsofsociety ahierarchyofsorts.

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SOCIAL FACTORSSocialfactors,suchastheconsumer'shousehold

typeandreferencegroups,aswellassocialroles

andstatusinfluencesbuyingdecisions

companiesmusttakethemintoaccountwhendesigning

theirmarketingstrategies.

Groups Membershipgroups.

Referencegroups.

Opinionleaders

RolesandStatus

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Social and groupforces

Social class

Reference

groups

Family and

households

Subculture

distinct groups within

the larger culture that

have identifiable patterns

of behaviour.

determined by a

combination of

occupation, income,

education,

wealth and other

variables.

Family of orientation

(parents), renting units(associational groups)

and family of procreation

(spouse and children)

are the most basic

reference groups.

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Socialandgroupforcesarethemostbasicinfluenceonaperson'svalues,priorities,andbeliefs.

SchoolofMarketing,UNSW:RazzaqueL4 8

1. AgeandLifeCycleStage Changesinbuyersageandfamilystructureovertimeaffecttheirchoices.

2. Occupation Carrieswithitdistinctconsumptiveneedsand theirownsubculturalnormsandvaluesthatinfluencebuyerbehaviour.

Whitecollarworkersneeddifferentclothesthanbluecollarworkers.

3. EconomicSituation Foralmosteveryone,buyingbehaviourisdeterminedbyfinancialmeans.

4. Education Peoplewithhighereducationlevelstendtoholdpositionsthatinfluencedressstandardsandsuchpurchasesascomputersandreadingmaterials.

PERSONAL FACTORS I


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5.Consumerlifestyle:Apersonspatternoflivingasexpressedinhis/heractivities,interestsandopinions. Psychographics Thetechniqueofmeasuringlifestylesand

developinglifestyleclassifications;itinvolvesmeasuringthemajorAIOdimensions(Activities,Interests,Opinions).

Lifestylecapturessomethingmorethanjustsocialclassor

personality. Itprofilesapersonswholepatternofacting

andinteractingintheworld.

InAustralia,theRoyMorganResearchCentreconductsresearch

into

consumer

opinions

and

trends.

When

used

carefully,thelifestyleconceptcanhelpthemarketertounderstandchangingconsumervaluesandhowtheyaffectbuyingbehaviour.

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PERSONAL FACTORS II


PERSONAL FACTORS IIIPersonalityandselfconcept:Theuniquepsychological

characteristicsthatleadtorelativelyconsistentandlasting

responsestoourenvironment.Selfconceptisonesselfimage:

Complex;closelytiedtomotivation:usuallydescribedintermsofself

confidence,dominance,sociability,autonomy,defensiveness,adaptability

andaggressiveness.

Usefulforanalysingconsumerbehaviour: hasbeenappliedtobrands

peoplehave

atendency

to

give

products

and

brands

human

characteristics

(Fivebrandpersonalitytraits:sincerity,excitement,competence,

sophisticationandruggedness).

Consumersaremorelikelytochoosebrandswithpersonalitiesthatmatch

theirown. TheImaMacadspersonifyingthebrandwithahuman

characterillustrateApplesstrategytoassignthepersonalitytraitsof

coolnessandyouthfulnesstotheMac.

Inordertounderstandconsumerbehaviourthemarketermustfirst

understandtherelationshipbetweenselfconceptandpossessions.

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PSYCHOLOGICAL FACTORSMotivation

Perception

Learning

Beliefs andAttitudes

Theinternalurgedirectingapersontodosomethingtosatisfythaturge

Whenbuyingsomethingweask

Why?

WhatamIreallyseeking?

WhatneedsamItryingtosatisfy?

Apersonhasmanyneedsatanygiventime.

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Motivation Theories

Sigmund

Freud:

peopleare

largely

unconscious

about

the

real

psychologicalforcesshapingtheirbehaviour.

AbrahamMaslowsoughttoexplainwhypeoplearedrivenbyparticularneedsatparticulartimesanddevelopedtheneedhierarchy.


Motivation

Maslow's Theory

of Motivation

discusses

motivation.

Need states

vary in their

intensity or

motivation.

Self-Esteem

Belongingness

Safety

Physiological

SelfActuali zation

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PSYCHOLOGICAL FACTORS I: MOTIVATION


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SchoolofMarketing,UNSW:Razzaque L4 13

Perception :Theprocessbywhich

peopleselect,organiseand

interpretinformationtoforma

meaningfulpictureoftheworld.

Ouractionsareinfluencedbyour

perceptionofthesituation.

PerceptualProcesses

SelectiveAttention:exposedto

many,rememberafew

SelectiveDistortion:interpretto

supportviews

held

SelectiveRetention:remember

thingstosupportattitudesand

beliefs

Learning refersto

changesinbehaviour

arisingfromexperience.

Learningtheoryhelps

marketersbuilddemand

byassociatingaproduct

withdrives(stronginternalstimulusthatcalls

foraction),using

motivatingcues (minorstimuli determiningwhen,

whereand

how

one

responds)andproviding

positivereinforcement.

PSYCHOLOGICAL FACTORS II:PERCEPTION LAERNING


PSYCHOLOGICAL FACTORS III: BELIEFS AND ATTITUDES Beliefs refer to the assumptions and convictions that are held to be true, by

an individual or a group, regarding concepts, events, people, and things. A

belief is an internal feeling that something is true, even though that belief

may be unproven or irrational. I believe that walking under a ladder brings bad luck , or

I believe that there is life after death.

Incorrect beliefs about product or brand image can block sales.

An att itude refers to the predisposition or a tendency to respond positivelyor negatively towards a certain idea, object, person, or situation . An attitude

is the way a person expresses or applies their beliefs and values, and is

expressed through words and behaviour.

I get really upset when I hear about cruelty to children and animals, or

I hate school.

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People acquire their beliefs and attitudes through acting and learning.


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SchoolofMarketing,UNSW:Razzaque4 15



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TRICOMPONENT ATTITUDE MODEL

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ATTITUDE

Cognitive

Beliefsandattitudesnotinfluencedby

emotion.

Affective

Emotionalresponsessuch

aslikingordisliking.

Conative

Intentiontopurchaseor

purchaseitself.


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VariousFactorsandConsumerDecisionMakingProcess

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INTERNALINFLUENCESPerception

Learning

MemoryMotives

Personality

Attitudes

SITUATIONS

ProblemRecognition

InformationSearch

AlternativeEvaluation

andSelection

OutletSelectionand

Purchase

Post

purchase

Dissonance

SITUATIONS

Experiences

and

Acquisitions

Experiences

and

Acquisitions

SELFCONCEPT Desires

And

LIFESTYLE Needs

EXTERNALINFLUENCESCulture

Subculture

Demographics

SocialStatus

ReferenceGroups

Family

MarketingActivities


ConsumerDecisionMakingProcess

Needrecognition

Informationsearch

Evaluation ofalternatives

Purchasedecision

Postpurchasebehavior

Problems are recognised when people sense a difference

between an actual state and some desired state.

effort varies from heightened awareness corresponding

to increased receptivity for relevant information to

active information search modes where the person

expends some energy to obtain.

compares product attributes of the

alternatives against degrees of

importance each attribute has in

meeting needs, beliefs about the product.

Involves comparing the expected

performance of the product against the

perceived performance received. Results

in cognitive dissonance .

involves deciding

to buy or not to buy.

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Step1:NeedRecognition

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NeedRecognition

DifferencebetweenactualstateanddesiredstateNeedRecognition

Differencebetweenactualstateanddesiredstate

InternalStimuli

Hunger

Thirst

A persons normal needs

ExternalStimuli

TV Advertising

Print Ad

Radio Ad

Internet

Stimuli from Environment


Step2:InformationSearch

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PersonalSources

CommercialSources

PublicSources

ExperientialSources

Family,Friends,Neighbours

MostInfluentialsourcesofinformation

Advertising,Salespeople,

Massmedia

Consumerratinggroups

Examining/Handlingtheproduct

Usingtheproduct


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Step3:EvaluationofAlternatives

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ProductAttributes

Evaluation ofQuality,FeaturesandpriceDegreeofImportance

Whichoftheattributesisthemostimportant?BrandBeliefs

Whatisthebeliefabouteachoftheavailablebrands?TotalProductSatisfaction

Giventhe

expectations

about

the

products,

what

is

the

likelydegree/extentofsatisfaction?

EvaluationProcedure

Choosingabrandbasedononeormoreoftheattributes


Step4:PurchaseDecision

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PurchaseIntentions

Desiretobuythemostpreferredbrand

PurchaseDecision

Attitudeofothers Unexpectedsituationalfactors


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Step5:PostpurchaseBehaviour

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ProductsPerceivedPerformance

ConsumersExpectationofProductsPerformance

SatisfiedCustomer DissatisfiedCustomer

CognitiveDissonance


Post-purchase behaviour: Cognitive Dissonance


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Roles and Status - eachrelationshipofapersonwithhisorhergroupcarrieswithitcertainrolesandstatuscarryingconsumptiveresponsibilities.

People play several roles -initiator;influencer;decider;buyer;anduserinthebuyingprocessatanytime.

6-56-5

Marketing5 th Ed Copyright 2001 Pearson EducationAustralia w

Consumer Buying Roles

Decider

Buyer

User

Influencer

Initiator

KeyFamily

DecisionRoles

1

ConsumerBuyingRoles

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MoreInvolvement

LessInvolvement

RoutineResponseBehavior

Little involvement inselection process

Frequently purchasedlow cost goods

May stick withone brandBuy first/evaluate laterQuick decision

e.g. Softdrink,ballpoint pen,petrol,

Limited DecisionMakingLow levels ofinvolvement

Low to moderate

cost goodsEvaluation of a fewalternative brands

Short to moderate timeto decide

e.g. clothing

ExtensiveDecisionMakingHigh levels of involvementHigh cost goodsEvaluation of many brandsLong time to decideMay experience cognitivedissonance

House,car,camera,

someclothing,choiceofaccountantordoctor.

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TypesofConsumerBuyingDecisions


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TheBuyer

Decision

Process

for

New

Products

Anewproductisagood,serviceorideathatis

perceivedbysomepotentialcustomersasnew.

TherearefiveStagesintheAdoptionProcess

Awareness;Interest;Evaluation;Trial;Adoption IndividualDifferencesinInnovativeness

Peoplediffergreatlyintheirreadinesstotrynew

products.

SomeareInnovatorsofthenewtechnology,some

areearlyadopters,someearlymajority,somelatemajorityandsomearelaggards.

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Copyright 2012 Pearson Australia (a division of Pearson Australia Group Pty Ltd) 9781442531109/Kotler/POM/5e

Thebuyerdecisionprocessfornewproducts

Stagesintheadoptionprocess

Awareness

Interest

Evaluation

TrialAdoption


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InfluenceofProductCharacteristicsonRateofAdoption

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thedegreetowhichaninnovationappearssuperiortoexistingproductsRelativeAdvantage:

thedegreetowhichtheinnovationfitsthevaluesandexperiencesofpotentialconsumers.

Compatibility:

thedegreetowhichtheinnovationisdifficulttounderstandoruse.Complexity:

thedegreetowhichtheinnovationmaybetriedonalimitedbasis.Divisibility:

:

thedegreetowhichtheresultsofusingtheinnovationcanbeobservedordescribedtoothers.Communicability:


BUSINESSTOBUSINESSMARKETS

The industrial market. Those who buy to make

other products and services that are sold,

rented or supplied to others.The reseller market. Those who acquire goods

for the purpose of reselling or renting them

to others at a profit.

The institutional and government market.

Government units - federal, state and local -

that purchase or rent goods and services for

carrying out the functions of government.

Characteristics of

BusinessMarkets

Market Structureand Demand

Types of Decisionsand Decision Process

OtherCharacter

istics

Nature ofBuying

Unit

Business markets are all the organisations that buy goo ds and services to use in

the production of other products and services or for the purpose of renting them

to others at a profit.

Types of Business Markets

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A Model of Business Buying Behaviour

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BUSINESS BUYER BEHAVIOUR I

Straight Rebuy. The buyer reorderssomething without any modifications.

Modified Rebuy. The buyer seeks achange in specifications, prices, terms, orsuppliers.

New Task. Here the company is buyingthe product for the first time and facesthe greater costs and risks.

Systems buying and selling.

The buyer seeks a packaged solution to a problem from a single seller who offersa set of interlocking products and the coordination, implementation, and control

procedures for operating them.

New Task

Buying

Straight

Rebuy

Modified

RebuyTypes o fBusinessBuying

Situations

Major Types of Buying Situations

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Types of Buying Situations

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BUSINESS BUYER BEHAVIOUR II

Users are members of the organisation

who will use the product.

Influencers are people who affect the

buying decision.

Buyers are those with the formalauthority to select suppliers and to

arrange terms of purchase.

Deciders have the formal or informal

power to select or approve the final

suppliers.

Gatekeepers are those who control the

flow of information to others.

Buying Centre

UsersGatekeepers

Deciders Influencers

Buyers

Participants in the business buying process

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Major influences on Business Buying

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Stages in Business Buying Process I

Problem Recognition

General Need Description

Product Specification

Supplier Search

Proposal Solicitation

Supplier Selection

Order Routine Specification

Performance Review

Source:Kotler, Brown, Adam, Armstrong;

Marketing, 5th Edition; Prentice Hall

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STAGESINBUSINESSBUYINGPROCESSII

ProblemRecognitioncanresultfrominternalorexternalstimuli;[emergefrom

anidentifiedshortageorideasforimprovementsrecognised bybuyers

GeneralNeedDescriptiondescribestheoverallcharacteristics andquantitiesof

theneededitem.

ProductSpecificationrequiresthatateammusttranslategeneralneedsinto

productspecifications.Anengineeringvalueanalysisteammaylookat

alternativedesignstoreduceproductioncosts.

SupplierSearchconductsasearchforthebestvendorsmeetingspecifications.

ProposalSolicitationinvitesqualifiedsupplierstosubmitproposalscoveringthe

termsofsupplyandsupport.

SupplierSelectionselectssuppliersbaseduponacombinationoftechnical

competenceandservicerecordandreputation.

OrderRoutineSpecificationspecifiesthedetailsofthesupplier'scontractlisting

technicalspecifications,deliveryterms,policiesforreturnandwarranties,

andquantitiesneeded.

PerformanceReviewwillreviewhowthesuppliercontractisworkingforthe

companyandmaycontinue,amend,ordroptheseller.

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Comparison of Business Consumer Buying Situations

BUYING STEP

1 Need or problem recognit ion

2 General need descript ion

3 Product specification

4 Information / suppl ier search

5 Proposal solicitation

6 Supplier selection

7 Order-routine specification

8 Post-purchase performance

review

INDUSTRIAL CONSUMER

Anti cipates Reacts

Extensive Limited

Precise / technical Benefits

Extensive Limited

Formal Verbal

Extensive Limited analysis

Calculated re-order Not routinised

Extensive comparisons Little comparison

and benchmarking

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mark1012 week 4 lecture notes

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