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Chapter 12
Understanding Marketing
Processes and Consumer
Behaviour
Copyright © 2006 Pearson Education Canada Inc.
12-1
Learning Objectives
Explain the concept of marketing
Explain the purpose of a marketing plan
and identify the four components of the
marketing mix
Explain market segmentation and show
how it is used in target marketing
Explain the purpose and value of
market research
Copyright © 2006 Pearson Education Canada Inc.
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Learning Objectives
Describe the key factors that influence the
consumer buying process.
Describe the international and small business
marketing mixes.
Copyright © 2006 Pearson Education Canada Inc.
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Marketing
Marketing

Planning and executing the development, pricing,
promotion, and distribution of ideas, goods, and
services
Value

Relative comparison of a product’s benefits versus
its costs
Utility

Ability of a product to satisfy a human want or
need
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Goods, Services, and Ideas
Consumer goods

Products purchased by individuals for their
personal use
Industrial goods

Products purchased by companies to use directly
or indirectly to produce other products
Services

Intangible products, such as time, expertise, or an
activity that can be purchased
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Relationship Marketing
A type of marketing that emphasizes
lasting relationships with customers and
suppliers

Stronger relationships can result in greater
long-term customer satisfaction and client
retention
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The Marketing Mix
Marketing mix

The combination of product, pricing, promotion,
and place (distribution) strategies used in
marketing a product
 Also known as the four P’s of marketing
Marketing plan

A detailed strategy for gearing the marketing mix
to meet consumer needs and wants
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Choosing the Marketing Mix
Product
Price
The basic
design of
the product
How much
consumer
pays
Place
Where and
when the
product is
+
Promotion
=
Product
image and
visibility
Copyright © 2006 Pearson Education Canada Inc.
Customer
Satisfaction
Business
Profitability
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Product
Product

A good, service, or idea that satisfies the buyers’
needs and demands
Product differentiation

The creation of a product or product image that
differs enough from existing products on the
market to attract consumers
Mass customization

Providing thousands of customers with exactly the
products they want
 Dell Computers
Copyright © 2006 Pearson Education Canada Inc.
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Price
Price



Choosing the right price to meet the firm’s profit
objectives and buyers’ purchasing objectives
May be low price strategy (salt) or high price
strategy (mink coat)
Price must consider all costs
 operation and administration
 marketing research
 advertising
Copyright © 2006 Pearson Education Canada Inc.
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Promotion
Choosing the right method of selling the
product to the consumer

Promotional tools
 Advertising
 Personal selling
 Sales promotions
 Publicity
 Public relations
Copyright © 2006 Pearson Education Canada Inc.
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Place (Distribution)
The part of the marketing mix
concerned with getting products from
producer to buyer


Physical transportation
Choice of sales outlets
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Target Market and
Segmentation
Target market

A group of potential customers who have
similar wants and needs
Segmentation


Dividing a consumer market into categories
Selecting specific market segment(s) to
pursue
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Identifying Market Segments
• Search for common traits or behaviours that
will affect the purchasing decision
•Geographic variables
•Country, region, neighbourhood
•Demographic variables
•Age, income, gender, ethnic background, marital
•Psychographic variables
•Psychological traits that a group has in common
(motives, attitudes, activities, opinions)
•Product-use variables
•How a group member uses a good (athletic, casual)
Copyright © 2006 Pearson Education Canada Inc.
12-14
Geographic Variables
Area of residence affects product
consumption



Rainfall and umbrellas
Snowfall and snowmobiles or snow blowers
Hot summers and backyard pools
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Demographic Variables
Age
Gender
Marital Status
Religion
Income
Family Size
Ethnicity
Language
Education
Occupations
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Psychographic Variables
Psychological traits:
Attitudes
Interests and hobbies
Opinions
Motivations
Activities
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Behavioural Variables
Occasion for use
Benefits sought
Reasons for purchasing
Loyalty level
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Market Research
The systematic study of what buyers
need and how best to meet those
needs



Focuses on the marketing mix elements
Leads to more effective marketing
Increases the accuracy and effectiveness of
market segmentation
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12-19
The Research Process
Study the
Current
Situation
Select a
Research
Method
Collect Data
Analyze Data
Focus Group
Use
Secondary
Data
Prepare
Report
Survey
Use
Primary
Data
Make
Recommendations
Observation
Experimentation
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Observation
Viewing or monitoring human behaviour
Useful for cases where actions occur
automatically without thinking

Grocery shopping
May be human observation or
technological

Supermarket scanners
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Survey
Administration of a questionnaire, a list
of questions, to prospective buyers



Relies on a reliable random sample
Administered in person, via phone, mail, or
the internet
Key issues include choosing appropriate
questions and ensuring honest answers
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Focus Group
A small discussion group of prospective
customers or product users
Allows in-depth discussion of complex or
subjective issues regarding products or
services
Usually a blind research study where
participants do not know who the sponsor of
the group is
Researchers analyze the results by searching
for common themes in participants’ feedback
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Experimentation
A controlled research design allows the
determination of how consumers react
to specific situations or appeals
The situations can be manipulated to
compare responses to such things as
shelf placement of products, package
colours and design, advertising strategy
Very costly
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Consumer Behaviour
The study of the processes by which
customers come to purchase and
consume a product or service
Influenced by




Psychological factors
Personal factors
Social factors
Cultural factors
Copyright © 2006 Pearson Education Canada Inc.
12-25
The Consumer Purchase
Process
Personal & Environmental
Marketing Factors
Product
Purchase Process
Factors
Problem
Recognition
Information
Seeking
Price
Place
Promotion
Evaluation
of
Alternatives
Purchase
Decision
PostPurchase
Evaluation
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Psychological
Personal
Social
Cultural
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International
Marketing Mix
Products may require substantial change before they
can be marketed to different countries
Pricing requires consideration of product
manufacturing costs, transportation and delivery
Promotion must accommodate cultural differences
and social traditions
Distribution may involve cooperation with other
international firms and adherence to foreign
packaging and labelling legislation
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