1. UNDERSTANDING PRINCIPLES OF MARKETING
PART 3
UNDERSTANDING PRINCIPLES OF MARKETING
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2. Understanding Marketing Processes and Consumer Behavior
CHAPTER 10
Understanding
Marketing Processes
and Consumer
Behavior
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3. Copyright 2004 Prentice Hall, Inc.
Chapter Outline
What Is Marketing?
Target Marketing and Market Segmentation
Marketing Research
Understanding Consumer Behavior
Organizational Marketing and Buying Behavior
International Marketing Mix
Small Business and the Marketing Mix
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4. What Is Marketing?
Process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives
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5. Marketing: Providing Value and Satisfaction
Value and Benefits
Value is the relative comparison of a products benefits versus its costs
Benefits include the functions of the product and the emotional satisfactions associated with owning, experiencing or possessing it
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6. Marketing: Providing Value and Satisfaction
Value and Utility
Utility is the ability of a product to satisfy a human want or need. Four kinds:
Time Utility
Place Utility
Ownership Utility
Form Utility
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7. Marketing: Goods, Services and Ideas
Consumer goods are products purchased by consumers for personal use
Industrial goods are products used by companies to produce other products
Services are intangible products that can be purchased
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8. What Is Relationship Marketing?
Marketing strategy that emphasizes lasting relationships with customers and suppliers
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9. The Marketing Environment
External environment is the outside factors that influence marketing programs by posing opportunities and threats. Five environmental factors:
Political–Legal Environment
Social–Cultural Environment
Technological Environment
Economic Environment
Competitive Environments
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10. The External Marketing Environment
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11. Competitive Environment
Substitute products differ from those of competitors but can fill the same need
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12. Competitive Environment
Brand competition occurs between similar products
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13. Competitive Environment
International competition matches domestic products against foreign products
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14. Who Are Marketing Managers?
Manager who plans and implements the marketing activities that result in the transfer of products or services from producer to consumer
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15. What Is a Marketing Plan?
Detailed strategy for focusing marketing efforts on consumer needs and wants
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16. What Is the Marketing Mix (or the “Four P’s”)?
Combination of product, pricing, promotion and distribution (place) strategies used to market products
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What Is a Product?
A product is a good, service or idea designed to fill a consumer need or want.
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What Is a Product?
Product differentiation is the creation of a product feature or product image that differs enough from competing products to attract consumers
How do they differentiate themselves?
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What Is Pricing?
Pricing is selecting the best price at which to sell a product.
Prices must support a variety of costs
Prices must be competitive
Low- and high-price strategies can be effective in different situations
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20. What Is Distribution (Place)?
Distribution is part of the marketing mix concerned with getting products from producers to consumers.
Decisions about warehousing, inventory control and transportation options
Decisions about channels
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21. Copyright 2004 Prentice Hall, Inc.
What Is Promotion?
Promotion is the techniques for communicating information about products. Four promotional tools:
Advertising
Personal Selling
Sales Promotions
Public Relations
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22. What Is Target Marketing and Market Segmentation?
Target markets are groups of people with similar wants and needs
Market segmentation is the process of dividing a market into categories of customer types
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23. Identifying Market Segments
Geographic variables are geographical units
Demographic variables are characteristics of populations
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24. Demographic Variables
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25. Identifying Market Segments
Psychographic variables are consumer characteristics such as lifestyles, opinions, interests and attitudes
Behavioral variables are consumer characteristics based on the use of a product, benefits sought from it, reasons for its purchase and brand loyalty
Toothpaste w/ -Whiteners -Fluoride -etc.
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26. What Is Marketing Research?
Study of consumer needs and wants and the ways in which sellers can best meet them
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27. Market Research and the Marketing Process
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28. Copyright 2004 Prentice Hall, Inc.
The Research Process
. Study the current situation
. Select a research method
. Collect data
Secondary data are already available from previous research
Primary data are developed through new research
. Analyze the data
. Prepare a report
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Research Methods
Observation involves watching and recording consumer behavior
Survey uses a questionnaire either mailed to individuals or used as the basis of interviews
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Research Methods
Focus group involves a small gathering of people that are presented with an issue and asked to discuss it in depth
Experimentation compares the responses of the same or similar people under different circumstances
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31. What Is Data Warehousing and Data Mining?
Data warehousing is the process of collecting, storing and retrieving data in electronic files
Data mining is the application of electronic technologies for searching, sifting and reorganizing data to uncover useful marketing information and target products in the marketplace
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32. What Is Consumer Behavior?
Study of the decision process by which people buy and consumer products
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33. Influences on Consumer Behavior
Psychological influences: individual’s motivations, perceptions and attitudes
Personal influences: lifestyle, personality and economic status
Social influences: family, opinion leaders and reference groups
Cultural influences: culture, subculture and social class
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34. What Is Brand Loyalty?
Pattern of regular consumer purchasing based on satisfaction with a product
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35. Consumer Buying Behavior
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36. The Consumer Buying Process
Problem/Need Recognition  Consumer recognizes a problem or need
Information Seeking  Consumer often seeks information
Evaluation of Alternatives  Consumer compares products by analyzing product attributes
Purchase Decision  Consumer makes “buy” decision based on rational and/or emotional motives
Postpurchase Evaluations  Consumer repurchases products based on levels of satisfaction
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37. What Is Organizational Marketing and Buying Behavior?
Organizational marketing deals with buyers from organizational (or commercial) markets and with buying behaviors distinct from those found in consumer markets
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38. Organizational Markets
Industrial market includes businesses that buy goods to be converted into other products or used during production
Reseller market consists of intermediaries that buy and resell finished goods
Government and institutional market consists of nongovernmental buyers of goods and services
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39. Organizational vs. Consumer Buying Behaviors
Differences in Buyers: Organizational buyers are professional, specialized and expert
Differences in the Buyer-Seller Relationship: Organizational buying involves frequent and enduring buyer-seller relationships
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40. The International Marketing Mix
International Products Some products can be sold abroad with few changes
International Pricing Marketers must consider the higher costs of transporting and selling products abroad
International Distribution Delays in starting new distribution networks can be costly
International Promotion A good ad campaign is a good campaign just about everywhere
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41. Small Business and the Marketing Mix
Small-Business Products  Small firms should understand consumer wants before creating new products or services
Small-Business Pricing  Small firms should set prices by assessing costs
Small-Business Distribution  Small firms should select a facility location aimed at attracting and retaining customers
Small-Business Promotion  Small firms should plan promotional expenses as part of start-up costs
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