2. PowerPoint Presentation by Charlie Cook Copyright © 2005 Prentice Hall, Inc. All rights reserved. Chapter 10 Understanding Marketing Processes and Consumer Behavior

3. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–2 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

4. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–3 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

5. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–4 Providing Value and Satisfaction Values and benefits  Value: Benefits/Costs Value and utility  Utility: ability of a product to satisfy a human want or need.

6. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–5 The Influence of Marketing Permeates Everyday Life Goods  Consumer : purchased by consumers for personal use  Industrial: Purchased by companies to produce other products Services: intangible products such as time, activity or expertise. Ideas Relationship marketing emphasizes lasting relationships with customers and suppliers

7. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–6 The External Marketing Environment Figure 10–1

8. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–7 The Competitive Environment Drives Marketing Decisions Substitute product competition  Dissimilar products that fulfill same need. Brand competition  Occurs between similar products International competition  Domestic versus foreign products

9. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–8 Strategy: Marketing Mix: The “Four P’s” (Distribution) roductroduct ricingricing romotionromotion lacelace

10. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–9 Product differentiation Creation of a product or a product image that differs enough from existing

11. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–10 The Promotional Mix Advertising Personal Selling Sales Promotions Public Relations

12. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–11 Market Segmentation and 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 © 2005 Prentice Hall, Inc. All rights reserved.10–12 Identifying Market Segments Psychographic Variables Geographic Variables Demographic Variables

14. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–13 Demographic Variables Table 10–1

15. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–14 Consumer Behavior Psychological Influences: motivations, perceptions, attitude, ability to learn Personal Influences: lifestyle, personality, economic status Social Influences: family, friends, co-workers Cultural Influences:  Brand loyalty: pattern of regular consumer purchasing based on satisfaction with a product Why do consumers purchase and consume products?

16. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–15 The Consumer Buying Process Figure 10–2

17. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–16 Data warehousing and data mining How do firms collect information about you?

18. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–17 Organizational Markets Industrial Market: businesses buy goods to by used in making other goods Government and Institutional Market: includes hospitals, universities, military etc. Reseller Market : consists of intermediaries that buy and resell finished goods

19. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–18 Organizational Buying Behavior Differences in buyers  Professionals  Specialists  Experts Differences in buyer/seller relationships

20. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–19 What is a Product? Feature  Tangible and intangible qualities that a company builds into the product Value package  A product has a bundle of attributes

21. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–20 Classifying Products Consumer  Convenience Goods:  Inexpensive, purchased and consumed regularly and rapidly  Shopping Goods:  Moderately expensive, infrequently purchased  Specialty Goods:  Expensive, rarely purchased product Industrial  Expense Items:  Purchased regularly and consumed rapidly for daily operations  Capital Items  Expensive, long lasting, infrequently purchased

22. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–21 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.

23. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–22 Developing New Products The New Product Development Process Product Mortality Rates Speed to Market : Strategy of introducing new products to respond quickly to customer or market changes

24. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–23 Products in the Life Cycle Stages, Sales, Cost and Profit Figure 10–4

25. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–24 Creating Product Brands Branding  Using symbols to communicate the qualities of a given product to create loyal consumers  Brand awareness Types of Brands:  National Brands: produced, distributed, and carry name of manufacturer.  Licensed Brands: product whose name the seller has purchased the right from an organization or individual  Private Brands: developed by retailers

26. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–25 Product Packaging Attracts consumers Displays brand name Protects contents Supplies information Communicates features and benefits Provides features and benefits (e.g. easy pour spout)

27. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–26 The International Marketing Mix PRODUCTS PRICING PROMOTION DISTRIBUTION

28. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–27 Small Business and the Marketing Mix Products Pricing Promotion Distribution

29. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–28 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.

30. Copyright © 2005 Prentice Hall, Inc. All rights reserved.10–29 Chapter Review (cont’d) Define product and distinguish between consumer and industrial products. Explain the importance of branding and packaging.