2. Fourth Edition Copyright ©2003 Prentice Hall, Inc. PART 4........................ Understanding Principles of Marketing

3. Copyright ©2003 Prentice Hall, Inc. 10 - 2 Chapter 10 Understanding Marketing Processes and Consumer Behavior

4. Copyright ©2003 Prentice Hall, Inc. 10 - 3 “In our factory, we make lipstick. In our advertising, we sell hope.” ~ Charles Revson Revlon Cosmetics

5. Copyright ©2003 Prentice Hall, Inc. 10 - 4 Key Topics Definition of marketing The external marketing environment Segmentation and target marketing The consumer buying process Organizational markets and buying behavior Consumer and industrial products Branding and packaging

6. Copyright ©2003 Prentice Hall, Inc. 10 - 5 What Is Marketing? “Planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives” Finding a need and filling it! OR

7. Copyright ©2003 Prentice Hall, Inc. 10 - 6 The Influence of Marketing Permeates Everyday Life Goods Consumer Industrial Services Ideas Relationship marketing emphasizes lasting relationships with customers and suppliers

8. Copyright ©2003 Prentice Hall, Inc. 10 - 7 Competitive Environment Political & Legal Environment Social & Cultural Environment Economic Environment Technological Environment The External Environment Shapes Marketing Programs The Firm & It's Marketing Plan  Plans  Strategies  Decisions

9. Copyright ©2003 Prentice Hall, Inc. 10 - 8 Substitute product competition Brand competition International competition The Competitive Environment Drives Marketing Decisions

10. Copyright ©2003 Prentice Hall, Inc. 10 - 9 Marketing Mix The “Four P’s” (Distribution) roductroduct ricingricing romotionromotion lacelace

11. Copyright ©2003 Prentice Hall, Inc. 10 - 10 The Promotional Mix Advertising Personal Selling Sales Promotions Public Relations

12. Copyright ©2003 Prentice Hall, Inc. 10 - 11 Market Segmentation & Target Marketing Market Segmentation Dividing a market into customer categories Target Marketing Selecting a category of customers with similar wants and needs who are likely to respond to the same products

13. Copyright ©2003 Prentice Hall, Inc. 10 - 12 Identifying Market Segments Psychographic Variables Geographic Variables Demographic Variables

14. Copyright ©2003 Prentice Hall, Inc. 10 - 13 Consumer Behavior Psychological Influences Personal Influences Social Influences Cultural Influences Why do consumers purchase and consume products?

15. Copyright ©2003 Prentice Hall, Inc. 10 - 14 Postpurchase Evaluation Purchase Decision Evaluation of Alternatives The Consumer Buying Process Information Seeking Problem Recognition PsychologicalPersonalSocialCultural Personal & Environmental Factors ProductPricingPromotionPlace Marketing Factors

16. Copyright ©2003 Prentice Hall, Inc. 10 - 15 Organizational Markets Industrial Market Government & Institutional Market Reseller Market

17. Copyright ©2003 Prentice Hall, Inc. 10 - 16 Organizational Buying Behavior Differences in buyers Professionals Specialists Experts Differences in buyer/seller relationships

18. Copyright ©2003 Prentice Hall, Inc. 10 - 17 Product Features and Benefits Features Tangible and intangible qualities that a company builds into its products Benefits The results of using those products

19. Copyright ©2003 Prentice Hall, Inc. 10 - 18 Classifying Products Consumer Convenience Goods Shopping Goods Specialty Goods Industrial Expense Items Capital Items

20. Copyright ©2003 Prentice Hall, Inc. 10 - 19 Product Offerings Product Line A group of similar products, intended for similar buyers, who will use them in similar ways. Product Mix The total group of products that a company offers for sale.

21. Copyright ©2003 Prentice Hall, Inc. 10 - 20 Developing New Products The New Product Development Process Product Mortality Rates Strategy of introducing new products to respond quickly to customer or market changes

22. Copyright ©2003 Prentice Hall, Inc. 10 - 21 Creating Product Brands Branding Using symbols to communicate the qualities of a given product to create loyal consumers Types of Brands: National Brands Licensed Brands Private Brands

23. Copyright ©2003 Prentice Hall, Inc. 10 - 22 The World’s 10 Most Valuable Brands 1.Coca Cola 2.Microsoft 3.IBM 4.GE 5.Nokia 6.Intel 7.Disney 8.Ford 9.McDonald’s 10.AT&T Source: “The Best Global Brands,” BusinessWeek, August 6, 2001

24. Copyright ©2003 Prentice Hall, Inc. 10 - 23 The Future of Top Brands Gaining Value… Starbucks+32% Samsung+22% Financial Times+14% GE+11% Guinness+11% Losing Value… Xerox-38% Amazon.com-31% Yahoo! -31% Duracell-30% Ford-17% Source: “The Best Global Brands,” BusinessWeek, August 6, 2001

25. Copyright ©2003 Prentice Hall, Inc. 10 - 24 Product Packaging Attracts consumers Displays brand name Protects contents Supplies information Communicates features and benefits Provides features and benefits (e.g. easy pour spout)

26. Copyright ©2003 Prentice Hall, Inc. 10 - 25 The International Marketing Mix PRODUCTS PRICING PROMOTION DISTRIBUTION

27. Copyright ©2003 Prentice Hall, Inc. 10 - 26 Small Business and the Marketing Mix ProductsPricingPromotionDistribution

28. Copyright ©2003 Prentice Hall, Inc. 10 - 27 Chapter Review Define marketing Describe the forces of the external marketing environment Explain market segmentation and target marketing Describe the consumer buying process Discuss the organizational market categories

29. Copyright ©2003 Prentice Hall, Inc. 10 - 28 Chapter Review Define product and distinguish between consumer and industrial products Explain the importance of branding and packaging