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Chapter 5 Marketing and Consumer Behavior: The Foundations of Advertising Insert Range Rover ad Here (p. 143) The importance of the marketing process in business and the role of advertising and other communications tools

Objectives Define marketing Explain the role ads play in marketing Discuss product utility and its relation to consumer needs Explain the relationship of utility and needs Identify key participants in marketing Outline the consumer perception process Explain why “perception is everything” Describe the fundamental motives behind purchases Discuss influences on consumer behavior Explain cognitive dissonance

The relationship of Marketing to Advertising Marketing Create exchanges that satisfy the perceived needs, wants, and objectives of individuals and organizations

The Relationship of Marketing to Advertising ConceptionPricingPromotionDistribution Advertising Marketing

Customer Needs and Product Utility Utility The product’s ability to satisfy both functional needs and symbolic (psychological) wants

Exchanges perception, satisfaction Exchanges, Perception, and Satisfaction Any transaction in which the a person or organization trades something of value with someone else Marketing facilitates exchanges by: Exchanges

perception, satisfaction Exchanges, Perception, and Satisfaction Developing goods and services Pricing them affordably Distributing them Informing us about them Marketing facilitates exchanges by: Exchanges

perception, satisfaction Exchanges, Perception, and Satisfaction... is everything! Perception Seller provided information can help buyers to perceive a purchase is an equal- value exchange

Exchanges perception, satisfaction Exchanges, Perception, and Satisfaction The customer’s perception of the product or service The seller’s perception of the customer’s needs, wants, and objectives Marketing is concerned with two perceptions: Perception

Exchanges perception, satisfaction Exchanges, perception, and satisfaction Must occur every time a product is used Satisfaction Leads to more exchanges

Exchanges perception, satisfaction Exchanges, perception, and satisfaction By reminding consumers why they bought the product By helping them defend the purchase to others Advertising reinforces satisfaction By enabling them to convince other prospects to buy Satisfaction

Key Participants in the Marketing Process Customers Centers of Influence Prospective Customers Current customers

Global Markets Re- seller Industrial Consumer markets Key Participants in the Marketing Process Business Markets Government Markets CustomersMarkets

Global Markets Consumer markets Key Participants in the Marketing Process Business Markets Government Markets Marketers Customers

Consumer Behavior: The Key to Advertising Strategy Consumer Behavior Mental and emotional processes and activities of people who produce goods and services to satisfy needs and wants

CultureSocietyFamily Learning and persuasion PerceptionMotivation The Consumer Decision Process: An Overview Personal Processes Interpersonal Influences Nonpersonal Influences

Place Environment Time The Consumer Decision Process: An Overview Personal Processes Interpersonal Influences Nonpersonal Influences

Needs Wants Interpersonal Influences The Consumer Decision Process: An Overview Personal Processes Nonpersonal Influences Steps in the decision process 1.Problem recognition 2.Information search 3.Evaluation and selection 4.Store choice and purchase 5.Postpurchase behavior

The Consumer Perception Process Ad/commercial Promotion News item Product/store Price tag Conversion Physical data (stimuli) Sight Hearing Touch Taste Smell Physiological screens (sensory) Personality Self-concept Attitudes Beliefs Habits Psychological screens (emotional) Awareness Non- awareness Information Needs Wants Mental files (memory) Feedback

Learning Theories of Learning Cognitive TheoryConditioning Theory Mental process of memory, thinking, problem solving Trial-and-error process Relevant to how we learn from others and evaluate complex purchases Relevant to basic, simple, everyday purchases

Persuasion: Elaboration Likelihood Model (ELM) Exposure to the persuasive communication (AD) Is involvement with the product or message high? Attention Focus on “central” Product-related information Comprehension Deeper thoughts about product attributes and consequences More elaboration Persuasion Product beliefs Brand attitude Purchase intention IF YES Central Route Processing

Elaboration Likelihood Model Attention Focus on “peripheral” nonproduct information Comprehension Shallow thoughts about nonproduct information Low elaboration Persuasion Nonproduct beliefs Attitude toward ad Brand attitude Purchase intention Exposure to the persuasive communication (AD) Is involvement with the product or message high? IF NO Peripheral Route Processing

Learning Produces attitude Produces brand interest Leads to habit Leads to brand loyalty Defines needs and wants

Learning

Consumer Motivation Process Motivation Underlying force that contributes to our purchasing actions. Stems from... NeedsWants

Self-actualization Maslow’s Heirarchy of Needs Esteem Breakfast cereal Tires Pendant Golf lessons Social Safety Physiological Luxury car

Social approval Problem removal Problem avoidance Negatively oriented motives Sensory gratification Intellectual stimulation Positively oriented motives Informational Motives Transformational Motives Motives

Opinion Leaders Reference Groups Social Classes Society Family Interpersonal influences Interpersonal Influences

Environment Place Time Nonpersonal influences Nonpersonal Influences

Purchase Decision and Postpurchase Evaluation Meet Chris! She is thinking about buying a CD player

Purchase Decision and Postpurchase Evaluation Chris considers an evoked set Sony Panasonic Pioneer

Purchase Decision and Postpurchase Evaluation These brands satisfied her evaluative criteria High quality Durable Skip resistant

Purchase Decision and Postpurchase Evaluation After choosing a CD player, Chris begins postpurchase evaluation Will my friends like it? Was it worth the money?

Purchase Decision and Postpurchase Evaluation To deal with conflicted feelings about her purchase, Chris may try to reduce cognitive dissonance It’s a great player I love looking at ads for it!