1. A Brief Intro to Consumer Marketing

2. A Model of Buyer Behavior Buyer’s Characteristics Buyer’s Decision Process Buyer’s Decisions Product choice Brand choice Dealer choice Purchase timing Purchase amount Marketing Stimuli The Four P’s Other Stimuli Economic Technology Political Cultural

3. Buyer’s Characteristics - Cultural Culture –most fundamental determinant of a person’s wants and behavior. Subculture –nationalities, religions, racial groups, and geographical regions. Social Class –income, occupation, education, & area of residence.

4. Buyer’s Characteristics - Social Reference Groups –all groups having a direct or indirect influence on person’s attitudes or behavior. Family –single most important consumer-buying organization in society –family of orientation vs. family of procreation. Roles & Statuses

5. Buyer’s Characteristics - Personal Age & Life Cycle Stage Occupation Economic Circumstances Lifestyle Personality & Self-Concept

6. Buyer’s Characteristics - Psychological Motivation Biogenic needs –needs arising from physiological states of tension such as hunger, thirst, discomfort. Psychogenic needs –needs arising from psychological states of tension such as the need for recognition, esteem, or belonging.

7. Buyer’s Characteristics - Psychological Perception The process by which an individual selects, organizes, and interprets information inputs to create a meaningful picture of the world. Types of Selective Perception: –Selective Attention –Selective Distortion –Selective Retention

8. Buyer’s Characteristics - Psychological Learning –changes in an individual’s behavior arising from experience. Beliefs –descriptive thoughts that a person holds about some object/issue. Attitudes –relatively enduring un/favorable evaluations, emotional feelings, and action tendencies toward some object/issue.

9. Psychographics According to VALS VALS: Values and Lifestyles Framework. Intended to yield insights into: –why people believe/behave as they do, and –how internal values & attitudes are expressed externally. Primarily based upon consumers’ orientations and level of resources.

10. VALS Higher Resources Groups Actualizers –successful, sophisticated, active, “take-charge” types –cultivated tastes for upscale, niche-oriented products –generally status-oriented Achievers –successful, career/work oriented –prefer established, prestige products to impress peers –status-oriented

11. VALS Higher Resources Groups Fulfilleds –mature, satisfied, comfortable, reflective –prefer durability, functionality, & value in products –principle oriented Experiencers –young, enthusiastic, impulsive, rebellious –high proportion of income spent on clothing, fast food, music, movies, & video. –Action oriented

12. VALS Lower Resources Groups Believers –conservative, conventional, traditional –favor familiar products & established brands –principle oriented Strivers –uncertain, insecure, approval-seeking –prefer stylish products to emulate purchases of those with greater resources –status oriented

13. VALS Lower Resources Groups Makers –practical, self-sufficient, traditional, family-oriented. –Prefer practical, functional products –action oriented Strugglers –typically elderly, resigned, passive, concerned –cautious consumers who are loyal to favorite brands –status oriented

14. Types of Buying Behavior Significant Differences Between Brands –High involvement: complex buying behavior –Low involvement: variety-seeking buying behavior Few Differences Between Brands –High involvement: dissonance-reducing behavior –Low involvement: habitual buying behavior

15. Consumer Purchase Decision Process 1.Problem Recognition 2.Information Search 3.Evaluation of Alternatives 4.Purchase Decision 5.Postpurchase Behavior

16. A Brief Intro Business-to-Business (B2B) Marketing

17. Those activities that facilitate exchanges involving products and customers in business markets A business transaction between –a professional seller (representing a selling company) and –a professional buyer (representing a buying company) Activities in which goods or services are sold for any use other than personal consumption not transactionNote: It is not the nature of the product ; it is the nature of the transaction. What Is Business Marketing?

18. B2B versus B2C Marketing CharacteristicB2B MarketB2C Market Sales volumeGreaterSmaller Purchase volumeGreaterSmaller Number of buyersFewerMany Size of individual buyersLargerSmaller Location of buyersConcentratedDiffuse Buyer-seller relationshipCloserMore Impersonal Nature of channelMore directLess direct Buying influencesMultipleSingle/Multiple Type of negotiationsMore complexSimpler Use of reciprocityYesNo Use of leasingGreaterLess Key promotion methodPersonal SellingAdvertising

19. Derived Demand Inelastic Demand Fluctuating Demand Joint Demand Characteristics of Business Demand –“Derived demand” says that demand for a business product is linked to demand for a consumer good. This means consumer demand affects business marketing up a vast network of channels.

20. Classifying Business Goods & Services 3 Main Categories of Products  Entering Goods Become part of the finished product Cost assigned to the manufacturing process  Foundation Goods Capital Items Typically depreciated over time  Facilitating Products Support organizational operations Handled as overhead expenses

21. Classifying Business Goods & Services Entering Goods  Raw Materials Farm products & natural products Only processed as necessary for handling & transport Require extensive processing  Manufactured Materials & Parts Any product that has undergone extensive processing prior to purchase Component Materials require additional processing Component Parts generally do not require additional processing

22. Classifying Business Goods & Services Foundation Goods  Installations Major long-term investment items Buildings, land, fixed equipment, etc.  Accessory Equipment Less expensive & short-lived Not considered part of fixed plant Portable tools, PC’s, etc.

23. Classifying Business Goods & Services Facilitating Products  Supplies Any supplies necessary to maintain the organization’s operations  Services Maintenance & Repair support Advisory support Logistical support

24. Categories of B2B Customers Commercial enterprises –Indirect channel members and facilitators –OEMs (original equipment manufacturers) –Users = customers Governmental organizations Institutions

25. Major Uses of B2B Products  For additional production (e.g., components are combined into subassemblies and become part of the finished product)  For use in operations, but not part of the finished product  For resale

26. Steps in the Business Buying Process 1.Recognizing the need 2.Developing product specifications 3.Soliciting bids from potential suppliers 4.Making the purchase decision 5.Issuing the contract 6.Inspecting delivered goods for quality 7.Evaluating vendor performance

27. Types of Business Buying Situations New-task buy: –Business buying situation that is new and very different from anything that the buyer has faced previously. Straight rebuy: –Most common type of business buying situation; buyer purchases a part, material, or service routinely, with little thought going into buying process. Modified rebuy: –Reevaluation of alternatives; necessary because buying requirements have changed such that relatively routine buy or purchase no longer is routine.

28. Examples of Products Purchased Using the Buy-Class Pure routine Complete negotiation Straight Rebuy Modified Rebuy New Buy Electricity Gas/Water Office Supplies Bulk Chemicals VehiclesConsulting Services Electrical Components Computer Systems Installations Moon Shot Insurance

29. Insurance for the Apollo 11 Moonshot

30. Buygrid Analysis FrameworkStraight Rebuy RebuyModified NewBuy Need Recognition Develop Product Specifications Solicit Bids Make Purchase Decision Issue the Contract Inspect Goods for Quality Evaluate Vendor Performance Complexity of Buying Situation

31. Buygrid Analysis FrameworkStraight Rebuy RebuyModified NewBuy Need Recognition Develop Product Specifications Solicit Bids Make Purchase Decision Issue the Contract Inspect Goods for Quality Evaluate Vendor Performance CreepingCommitment