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Transcript
BA 590 Module 2 Customer Needs Key Terms • Model of Buyer Behavior • PSSP Pyramid • Problem Solving • Purchase Situation • Organizational Buyer Needs Key Terms • Pricing • Pricing Objectives • Discount Pricing • Allowances • Geographic Pricing • Value Pricing • Types of Cost • Demand Curve • Break-Even Analysis A Model of Buyer Behavior Marketing Mixes All Other Stimuli Psychological Variables Social Influence Purchase Situation Motivation Perception Learning Attitude Personality/Lifestyle Family Social Class Reference Groups Culture Purchase Reason Time Surroundings Person Making Decision Problem-Solving Process Exhibit 5-2 5-5 Person Does or Does Not Purchase (Response) The Adoption Process Awareness Interest Evaluation Trial Decision Confirmation 5-15 The Learning Process Drive Cues Reinforcement Response Exhibit 5-5 5-7 Relating the Processes Problem-solving steps Adoption process steps 1. Becoming aware of or interested in the problem Awareness and interest 2. Gathering information about possible solutions Interest and evaluation Drive 3. Evaluating alterative Evaluation, maybe trial solutions 4. Deciding on the appropriate solution Decision 5. Evaluating the decision Confirmation 5-16 Learning steps Cues Reinforcement Response The PSSP Hierarchy of Needs Personal Needs Social Needs Safety Needs Physiological Needs Exhibit 5-4 5-6 Levels of Problem Solving High involvement Infrequently purchased Expensive High risk Much information desired Low involvement Frequently purchased Inexpensive Little risk Little information needed Routinized Response Behavior Limited Problem Solving Low Involvement High Involvement Involvement Continuum Exhibit 5-11 5-14 Extensive Problem Solving Purchase Situation • Activity-Interest-Opinion • Situation Influences • Social Class Lifestyle Dimensions ??????? ??????? ??????? ??????? ??????? 5-8 Activities Interests Opinions Purchase Situation Influences ??????? ??????? ??????? ??????? ??????? 5-12 Purchase Reason Time Surroundings Social Class Dimensions Upper-class 1.5% Upper-middle class 12.5% 32% 38% 15% Exhibit 5-8 5-10 Lower-middle class Upper-lower (“working”) class Lower-lower class Relating the Processes Problem-solving steps Adoption process steps 1. Becoming aware of or interested in the problem Awareness and interest 2. Gathering information about possible solutions Interest and evaluation Drive 3. Evaluating alterative Evaluation, maybe trial solutions 4. Deciding on the appropriate solution Decision 5. Evaluating the decision Confirmation 5-16 Learning steps Cues Reinforcement Response Organization Buyer Needs • Buying Centers • Buyer Seller Relationships Buying Centers Buyers Users Buying Center Gatekeepers Exhibit 6-2 6-4 Influencers Deciders Buyer-Seller Relationships Information sharing Linkages R&D Quality Salesperson Supplier Cooperation Exhibit 6-5 6-8 Quality R&D Purchasing manager Relationship Customer Accounting Marketing Accounting Production Finance Production Engineering Legal bonds Adaptations Pricing • Strategy Planning Elements • Objectives • Flexibility • Skim • Penetration Pricing • Discounts • Allowances Pricing • Geographic Pricing • Value Pricing • Mark-ups • Types of Cost • Breakeven Analysis Strategy Planning for Price Target Market Product Place Promotion Price Pricing objectives Price flexibility Exhibit 16-1 16-3 Price levels over product life cycle Discounts and allowances— to whom and when Geographic term — who pays transportation and how Pricing Objectives Profit Oriented Pricing Objectives Sales Oriented Status Quo Oriented Exhibit 16-4 16-4 Target Return Maximize Profits Dollar or Unit Sales Growth Growth in Market Share Meeting Competition Nonprice Competition Price Flexibility Policies • One-price policy • The same price to all customers who purchase products under essentially the same conditions and quantities • Exchange rate changes may make this difficult in international markets • Flexible pricing (e.g., in channels, business markets, expensive consumer shopping products) • Issues: • • • • • 16-5 Use is increasing because of impact of information technology, customer databases, scanners, etc. Selling costs may be higher if prices are negotiated “Signals” to competitors Customer dissatisfaction may be a problem “Gray channels” and cross-shipping Price Level Policies Skimming Pricing Price Initial skimming price Sell at high price before reducing to next price level and repeat Second price Final price Quantity Exhibit 16-5A 16-6 “Skim the cream” pricing involves selling at a high price to those who are willing to pay before aiming at more price-sensitive consumers. Price Level Policies Penetration Pricing Price Penetration pricing involves selling the whole market at one low price. Whole market price Quantity Exhibit 16-5B 16-7 Discount Pricing Quantity Seasonal Discount Pricing Sale Cash Trade 16-8 Allowances Advertising Allowance Common Kinds of Allowances Stocking Allowance Push Money Allowance Trade-In Allowance 16-9 Geographic Pricing Policies F.O.B. Common Geographic Pricing Policies Zone Uniform Delivered Freight Absorption 16-10 Value Pricing ???? ???? ???? ???? ???? $ 16-11 Focus on Customer Requirements Target Market and Competition Fits with Strategy Planning Key Factors That Influence Price Setting Pricing objectives Price of other products in the line Demand Price flexibility Price settin g Cost 17-3 Legal environment Geographic pricing terms Competition Exhibit 17-1 Discounts and allowances Markup chain in channels Questions • Relate the Concept of Stock Turnover to MassMerchandising. Use an Example to Explain This Markups 50.00 30.00 Markup = 20.00 = 40% 24.00 Markup = 6.00 = 20% Markup = 2.40 = 10% Cost = 30.00 = 60% Cost = 24.00 = 80% Cost = 21.60 = 90% Producer Exhibit 17-2 17-4 Wholesaler Retailer Six Types of Costs Total Cost Total Fixed Cost Total Variable Cost Average Fixed Cost Average Variable Cost Average Cost 17-5 Prices Along the Demand Curve Total revenue = Price x Quantity $30,000 = $3.00 x 10,000 $40,000 = $2.00 x 20,000 $57,000 = $1.90 x 30,000 $66,000 = $1.65 x 40,000 $75,000 = $1.50 x 50,000 $72,000 = $1.20 x 60,000 Price per unit $3.00 2.00 1.90 1.65 1.50 1.20 10 Exhibit 17-6 17-6 20 30 40 Quantity (000) 50 60 70 Summary of Relationships Affecting Price ? Estimated quantity to be sold Quantity demanded at selling price Average fixed cost per unit Variable cost per unit Cost-oriented selling price per unit Exhibit 17-7 17-7 Average total cost per unit Profit per unit Break-even Analysis Total Revenue and Cost Higher Profit Area Total Cost Curve Break-Even Point Loss Area Total Variable Costs Total Fixed Costs 0 More Units of Production Exhibit 17-8 17-8 Total Revenue Curve Evaluating a Customer’s Price Sensitivity • Are there substitute ways of meeting a need? • Is it easy to compare prices? • Who pays the bill? • How great is the total expenditure? • How significant is the end benefit? • Is there already a sunk investment related to the purchase? 17-10 Demand-Oriented Pricing Prestige Demand Backward Price Lining Value-in-Use Types of Demand-Oriented Pricing Odd-Even Leader Bait Psychological 17-11 Reference Demand Oriented Pricing • Value in Use - Priced on What Consumers Will Save By Using the Product • Reference Price - Price Expected • Leader Pricing - Bargain Price • Bait Pricing - Low Price and Then Switch Demand Oriented Pricing • Psychological Pricing - Ranges Have the Same Appeal (Stair Function) • Odd-Even - “99 Cents” • Price Lining - A Few Price Levels, Then Marking All At Those Prices • Demand Backward - Work Backward From Price Consumer is Willing to Pay Demand Oriented Pricing • Prestige Pricing - High Price = High Quality Questions • Distinguish Between Leader and Bait Pricing • What Do They Have In Common? • How Can Their Use Affect the Marketing Mix? Full-Line Pricing ????? ????? ????? ????? ????? 17-12 Market- or Firm Oriented? Complementary Pricing? Product-Bundling Pricing?