1. 11 chapter Business Essentials, 8 th Edition Ebert/Griffin Marketing Processes and Consumer Behavior Instructor Lecture PowerPoints PowerPoint Presentation prepared by Carol Vollmer Pope Alverno College Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

2. After reading this chapter, you should be able to: 1.Explain the concept of marketing and identify the five forces that constitute the external marketing environment. 2.Explain market segmentation and how it is used in target marketing. 3.Describe the key factors that influence the consumer buying process. 4.Discuss the three categories of organizational markets. L E A R N I N G O B J E C T I V E S 11-2 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

3. After reading this chapter, you should be able to: 5. Explain the definition of a product as a value package and classify goods and services. 1.Describe the key considerations in the new product development process and explain the importance of branding and packaging. 2.Identify the ways that small businesses can benefit from having an understanding of the international marketing mix. L E A R N I N G O B J E C T I V E S (cont.) 11-3 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

4. What’s in It for Me? Why does marketing matter to you? By grasping this chapter’s presentation of marketing methods and ideas, you’ll benefit in two ways: You’ll be better prepared to use marketing in your career as both employee and manager You’ll be a more informed consumer with greater awareness of how businesses use marketing to gain your purchases 11-4 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

5. What Is Marketing? Marketing “The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” (AMA) Providing Value and Satisfaction Consumers buy products that offer the best value to meet their needs and wants 11-5 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

6. What Is Marketing? (cont.) Value and Benefits Value compares a product’s benefits with its costs. Benefits include the functions and the emotional satisfaction associated with owning, experiencing, or possessing a product. Value and Utility Form utility Time utility Place utility Ownership utility 11-6 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

7. What Is Marketing? (cont.) Goods, Services, and Ideas Consumer goods: Tangible goods that consumers may buy for personal use (Consumer marketing) Industrial goods: Physical items used by companies to produce other products (Industrial marketing) Services: Products with intangible (nonphysical) features (Service marketing) Relationship Marketing Building lasting relationships with customers and suppliers 11-7 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

8. What Is Marketing? (cont.) Data Warehousing and Data Mining for Building Customer Relationships Data warehousing: Compiling and storing consumer data Data mining: Automating the massive analysis of data by using computers to sift, sort, and search for previously undiscovered clues about consumer behavior. 11-8 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

9. What Is Marketing? (cont.) The Marketing Environment Political-legal Sociocultural Technological Economic Competitive Substitute products Brand competition International competition 11-9 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

10. What Is Marketing? (cont.) Strategy: The Marketing Mix Marketing Plan A detailed strategy for focusing marketing efforts on consumer needs and wants Marketing Mix Product - differentiation Pricing - selecting the best price Place - distributing through the proper channels Promotion - communicating information 11-10 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

11. Target Marketing and Market Segmentation Target Markets Groups of people with similar wants and needs who can be expected to show interest in the same products Market Segmentation Dividing a market into categories or “segments” Geographic Demographic Psychographic 11-11 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

12. TABLE 11.1 Demographic Variables 11-12 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

13. Understanding Consumer Behavior Influences on Consumer Behavior Psychological influences Personal influences Social influences Cultural influences Brand Loyalty Consumers who regularly purchase products because they are satisfied with their performance 11-13 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

14. FIGURE 11.1 The Consumer Buying Process Problem\Need Recognition Information Seeking Evaluation of Alternatives 11-14 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

15. Organizational Marketing and Buying Behavior 3 Types of Business Marketing (B2B) Industrial Markets Businesses that buy goods to be converted into other products or that are used up during production Reseller Markets Intermediaries, including wholesalers and retailers, that buy and resell finished goods Government and Institutional Markets Federal and state governments Nongovernmental organizations 11-15 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

16. Organizational Marketing and Buying Behavior (cont.) B2B Buying Behavior Differences in Buyers Organizational buyers negotiate the buyer-seller agreement (purchase terms) Specialists in purchasing a line of items Experts about the products purchased Buyer-Seller Relationship Frequent purchases Enduring long-term relationships Buyers and sellers may work closely Emphasis is on personal selling 11-16 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

17. What Is a Product? Product Defined A value package that provides a bundle of benefits and features to satisfy the needs and wants of customers Product Features Tangible and intangible qualities built into a product Benefits The tangible and intangible outcomes associated with acquisition or use of a product 11-17 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

18. Classifying Goods and Services Consumer Products 1.Convenience 2.Shopping 3. Specialty Industrial Products 1.Expense 2. Capital 11-18 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

19. TABLE 11.2 Categories of Consumer Products 11-19 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

20. TABLE 11.3 Industrial Products 11-20 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

21. The Product Mix Product Mix The group of products (consumer, industrial, or both) that a company makes available for sale Product Line A group of products that are closely related because they function in a similar manner or are sold to the same customer group who will use them in similar ways Multiple (or Diversified) Product Lines Allow a company to grow rapidly and can help to offset the consequences of slow sales in any one product line 11-21 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

22. Developing New Products The New Product Development Process Research and development (R&D) Departments for exploring new product possibilities Product mortality rates Few product ideas (1 in 50) actually reach the market Speed to market Responding to customer demand or market changes by introducing new products to the market ahead of competitors 11-22 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

23. FIGURE 11.2 Products in the Life Cycle: Stages, Sales, Cost, and Profit 11-23 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

24. Identifying Products Branding Products Branding A process of using symbols to communicate the qualities of a particular product made by a particular producer Signals uniform quality and stimulates consumer recall Brand loyalty Consumer preference for a particular product Brand awareness The brand name that comes first to mind when consumers consider a particular product category 11-24 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

25. Identifying Products (cont.) Gaining Brand Awareness Product placement A promotional tactic for brand exposure in which characters in television, film, music, magazines, or video games use a real product that is visible to viewers Buzz marketing A form of word-of-mouth marketing Viral marketing Relying on word-of-mouth and the Internet to spread information like a “virus” from person-to-person about products and ideas 11-25 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

26. Identifying Products (cont.) Types of Brand Names National brands Products that are produced by, widely distributed by, and carry the name of the manufacturer Licensed brands Companies (and even personalities) license (sell the rights to) other companies to put their names on products Private (or private label) brands Carry the brand name that a wholesaler or retailer develops and has a manufacturer put it on a product 11-26 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

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28. Identifying Products (cont.) Packaging Products Purposes of packaging Reduces damage, breakage, or spoilage In-store advertisement Displays the brand name Identifies features and benefits Enhances the product features and benefits Increases the difficulty of stealing small products 11-28 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

29. The International Marketing Mix International Products Need to adapt product to foreign markets International Pricing Higher transportation and selling costs abroad International Distribution Distribution network access in foreign markets International Promotion Cultural sensitivity requires adjustments to the marketing mix 11-29 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

30. Small Business and the Marketing Mix Small-Business Products Product failures due to lack of market potential or marketing to the wrong target market segments Small-Business Pricing Losses due to pricing errors resulting from underestimating operating expenses Small-Business Distribution Poor location choice fails to attract customers Small-Business Promotion Careful promotion can reduce expenses 11-30 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

31. Key Terms brand awareness brand competition brand loyalty branding capital item consumer behavior consumer goods convenience good/convenience service demographic variables distribution emotional motives expense item geographic variables industrial goods industrial market institutional market international competition licensed brand market segmentation marketing marketing manager marketing mix marketing plan 11-31 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

32. Key Terms (cont.) national brand packaging private brand (or private label) product differentiation product feature product life cycle (PLC) product line product mix product placement psychographic variables rational motives relationship marketing reseller market services shopping good/shopping service specialty good/specialty service speed to market substitute product target market utility value value package viral marketing 11-32 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

33. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. 3311-33 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall