Person making decisions Person does or does not purchase Simplified Buyer Behavior Model Marketing Mixes All other stimuli Stimulus Person making decisions Black Box Response Person does or does not purchase

Problem-solving process Person does or does not purchase (response) A Model of Buyer Behavior Marketing Mixes All other stimuli Psychological variables Motivation Perception Learning Attitude Personality/lifestyle Social Influences Family Social class Reference groups Culture Purchase Selection Purchase reason Time Surroundings Summary Overview (P; Exhibit 6-1) Production and marketing work together to create utility: the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility: provided when someone produces something tangible. Task utility: provided when someone performs a task for someone else. Time utility: having the product available when the customer wants it. Place utility: having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility: obtaining a good or service and the right to use or consume it. Person making decision Problem-solving process Person does or does not purchase (response)

An Expanded Model of the Consumer Problem-Solving Process Marketing Mixes All other stimuli Psychological variables Motivation Perception Learning Attitude Personality/lifestyle Social influences Family Social class Reference groups Culture Purchase situation Purchase reason Time Surroundings Person making decisions Need-want awareness Routinized response Search for information Feedback of information as attitudes Summary Overview(Exhibit 6-7; of P;) Production and marketing work together to create utility: the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility: provided when someone produces something tangible. Task utility: provided when someone performs a task for someone else. Time utility: having the product available when the customer wants it. Place utility: having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility: obtaining a good or service and the right to use or consume it. Set criteria and evaluate alternative solutions Decide on solution Postpone decision Purchase product Postpurchase evaluation Response

Pricing Change Model Environmental Conditions: Foreign competition Legal environment change - Technology change More informed consumers Pricing Profitability Elasticity Degree of change in price Sales Ch11 of B; Successfulness

The Learning Process Drive Cues Response Reinforcement Summary Overview (Exhibit 6-4) Production and marketing work together to create utility: the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility: provided when someone produces something tangible. Task utility: provided when someone performs a task for someone else. Time utility: having the product available when the customer wants it. Place utility: having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility: obtaining a good or service and the right to use or consume it. Reinforcement Response

Model of a Market-Directed Economy CONSUMERS Goods and Services PRODUCT- MARKET Information Information Money (expenditures) Information Money (income) Information GOVERNMENT Production resources Money (income) Information Summary Overview Every society needs an economic system: the way an economy organizes to use scarce resources in production and consumption. Depending upon the type of economic system, decisions about resource allocation are made differently. Key Issues Planned economic system: government planners make decisions about production and distribution; can work well in simple economies or under adverse conditions. Market-directed economic system: individuals govern resource allocation, production and consumption Characteristics of market-directed systems include: Adjusts itself. Price is a measure of value: consumers pay what they think things are worth; producers try to meet those price expectations. Greatest freedom of choice: less intervention from government planners; more choices are available to producers and consumers. Conflicts can arise when choices are at odds with each other or with society; this phenomenon is called the macro-micro dilemma. The role of government is to ensure fairness and the common good. Discussion Question: What are examples of things government planners compel consumers to buy, even in a largely market-directed economic system? RESOURCE MARKET Money (expenditures) PRODUCERS Information Information Primary direction Secondary direction of feedback

Model of a Market-Directed Macro-Marketing System Many Individual Producers (heterogeneous supply) Middlemen intermediaries Facilitators Perform universal marketing functions To overcome discrepancies and separation of production and consumers Monitoring by government(s) and public interest group Monitoring by government(s) and public interest groups Summary Overview(P; Exhibit 1-4, p.23) As the families in a market trade with each other, many transactions are needed to satisfy their needs. As a result, a central market eventually emerges where families can go to trade more conveniently. Key Issues A money system simplifies trading, and: expands services; creates inventories,; provides greater choice in the central market. Middlemen (intermediaries) may help, by bringing buyers and sellers together more efficiently, contributing time and place utility. Discussion Question: What is the incentive for middlemen to provide time and place utility To create utility and direct flow of need-satisfying goods and services Many Individual Consumers (heterogeneous demand)

An Expanded Model of the Consumer Problem-Solving Process This slide relates to material on pp. 5-6. : Indicates place where slide “builds” to include the corresponding point. Summary Overview(Exhibit 6-7; of P;) Production and marketing work together to create utility: the power to satisfy human needs. There are five kinds of economic utility. Key Issues Form utility: provided when someone produces something tangible. Task utility: provided when someone performs a task for someone else. Time utility: having the product available when the customer wants it. Place utility: having the product available where the customer wants it. Discussion Question: Can you think of examples of businesses that excel in providing time and place utility? Possession utility: obtaining a good or service and the right to use or consume it. : : : : : © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin—for use only with Basic Marketing