Download Chapter 10 Power Point Principals of Marketing

BUSINESS 7e
PART 3
UNDERSTANDING
PRINCIPLES OF
MARKETING
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BUSINESS 7e
CHAPTER 10
Understanding
Marketing Processes
and Consumer
Behavior
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BUSINESS 7e
Chapter Outline
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



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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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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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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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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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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What Is Relationship Marketing?
Marketing strategy
that emphasizes
lasting relationships
with customers and
suppliers
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The Marketing Environment
External environment is the outside factors that
influence marketing programs by posing
opportunities and threats. Five environmental
factors:





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Political–Legal Environment
Social–Cultural Environment
Technological Environment
Economic Environment
Competitive Environments
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The External Marketing
Environment
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Competitive Environment
 Substitute products differ from
those of competitors but can fill
the same need
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Competitive Environment
 Brand competition occurs
between similar products
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Competitive Environment
 International competition
matches domestic products
against foreign products
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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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What Is a Marketing Plan?
Detailed strategy for
focusing marketing efforts
on consumer needs and
wants
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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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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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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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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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Identifying Market Segments
 Geographic variables are
geographical units
 Demographic variables are
characteristics of populations
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Demographic Variables
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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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What Is Marketing Research?
Study of consumer needs
and wants and the ways in
which sellers can best meet
them
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Market Research and the
Marketing Process
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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
.
.
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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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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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What Is Consumer Behavior?
Study of the decision
process by which people
buy and consumer products
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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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What Is Brand Loyalty?
Pattern of regular
consumer purchasing
based on satisfaction with
a product
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Consumer Buying Behavior
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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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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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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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Organizational vs. Consumer
Buying Behaviors
 Differences in Buyers:
Organizational buyers are
professional, specialized and
expert
 Differences in the BuyerSeller Relationship:
Organizational buying involves
frequent and enduring buyerseller relationships
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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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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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