Download MM_1.03 - J

MM 1.00
Understanding Marketing,
Customer/Client/Business Behavior,
and Marketing Planning
1.03
Acquire foundational knowledge
of customer/client/business
behavior to understand what
motivates decision-making
MBA 5-9
Definitions

Behavior – a response of an individual or
group to action, environment, person, or
stimulus

Perception - The process by which people
translate sensory impressions into a coherent
and unified view of the world around them.

Drive – an internal force that results in action
Definitions cont.
Cues – something that happens or is said
which makes something start happening
 Attitudes –evaluations, feelings, and
tendencies toward an object or idea

 Learned
through experience and interactions
Beliefs – a descriptive thought about a
brand or product
 Expectations – what people think will
happen or want to happen

Role of Needs and Wants

What is the difference?

See handout or read Needs into Wants on
page 207 in Marketing Dynamics
textbook.

What do needs and wants have to do with
behavior?
 Needs
and wants are stimuli
 Stimuli can drive behavior
Needs vs. Wants
cont.
Activity: Individually categorize products as
either needs or wants. Be prepared to
discuss your reasons why.
When
can a need change into a want?
Do you market needs the same way as
wants?
Can you effectively market a want as a
need?
Selective processes that consumers
use to respond to stimuli

Marketers believe consumers follow a 6step decision making process:
 Awareness
of need or problem
 Information search
 Evaluation of options
 Decision to buy
 Purchase
 Post-purchase evaluation
Selective processes contd.

There are 4-levels of purchase decisions:
Impulse – made with no prior planning or
research [example: buying a soda at checkout
(POS) on a hot day]
 Routine (Habitual) – made quickly and without
much thought (example: purchasing same
deodorant)
 Limited – made with some research and
planning (example: checking reviews & Consumer
Reports before purchasing a new laptop)
 Extensive – involves a great deal of research
and planning (example: purchasing your first car)

Difference between attitudes and
beliefs

Attitudes
Are more subjective
 Can change from
person to person
 A state of mind
 An opinion
 Can evolve (change)

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Beliefs

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What we think the
facts are
What you take to be
true
Beliefs can be
mistaken
Beliefs can change
over time (evolve)
Most will defend their
beliefs to the end
Cultural influences on buying
behavior
The culture that you grew up in provides
you with an initial set of values, beliefs,
and behaviors
 Provides you with attitudes toward
products, buying, credit, and shopping
 May also affect your ideas of what is
appropriate to buy, wear, and do
 Don’t just think of ethnic cultures…. there
are also teenage cultures, California,
Southern, East Coast, Corporate,
Religious, gang, etc. (think Demographics)

Social influences on buying behavior
Social class – the ranking of people based
on wealth, education, ancestry, and power
 Conveyed
through your family, friends (peer
pressure), classmates, and other social or
professional groups. Also pushed through
media such as TV and movies.
A person’s individual differences
impact consumer behavior
Age – life stage
 Education
 Occupation
 Economic situation
 Lifestyle
 Personality
 Self-conception

(Demographics)
Psychological influences impact
consumer behavior
Influences that come from within a person
 According to psychologists our needs are
responsible for many of our purchases
 A need is a lack within. If the need is not
satisfied, it turns into a drive
 See Maslow’s Hierarchy of needs


Psychology is part of what makes
marketing work!
Situational influences that impact
consumer behavior

Influences that come from the
environment
 Government,
competitors, even customers
Weather, physical location of the store
 Time of day
 Visibility of advertising and other forms of
promotion
 The buyer’s mood, physical condition, and
financial condition at the time

Consumer vs. business customer
buying behavior
Consumer

Major influences

External: groups, culture,
situation

Marketing: 4P’s and service

Internal: perception,
attitude, knowledge,
personality, lifestyle, roles,
and involvement

Impulse buying is more
prevalent
Business
 Major influences:
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How decisions are made
Existence of experienced
purchasers
Time needed to make a
decision
Size of purchases
Number of buyers
Type of promotional effort
needed to reach the buyer
Decisions can take weeks,
months, years
How do Environmental Influences
affect business customers?
Changes in laws and regulations
 Competitors’ actions
 Evolving customer desires
 Changes in the economy

How do Organizational Influences
affect business customers?

Organizational influences are those that
occur within the company or organization
 How
is the company set up?
 Have there been any changes to the reporting
structure? (Vertical or Horizontal)
 What are the company’s goals and sales
forecasts for the year?
Marketing strives to satisfy the
company’s and individual’s needs
To effectively market products to a
business, marketers focus on both the
needs of the business and the individuals
making the buying decision
 Satisfying the business individuals’ wants
and needs in addition to the company’s
keeps the buyers coming back when they
need more

MBA 5-11
Actions for Success
While making and selling products can
make a company money, the company
needs to be managed properly to become
and stay successful.
 4 Steps to successful management:

 Plan
 Organize
 Implement
 Control
Aligning strategies with business
goals

Step 1 of successful management requires good
planning

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Planning requires the managers to look at the present
situation and think about where they want to go in
the future
Aligning the actions (strategies) of the company with
the goals is crucial to ensuring success

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First to market requires a great R&D department
Being an effective follower into a market means you must
have a great MIM system and solid PSM capabilities
Proper Employee Training

If employees don’t understand the
company, its products and its customers
the business will falter.
 Even
well educated and experienced
employees need training
 Getting everyone n the organization to
understand the competitive environment the
same way is crucial building a successful
company
 Consistency matters
Importance of a business’s reputation
Current and potential customers often
make buying decisions based on how they
perceive the company and its products
 Public relations (part of Promotion) is
important to developing and keeping a
good reputation and a good reputation is
important to present and future sales
 Negative publicity can damage a
company’s profitability

Honest and clear communication

This is important inside and outside a
company
 Inside
the company, it ensures that everyone
knows what the goals are and their individual
roles
 Outside the company, it helps the customer
develop realistic expectations as to what the
company can do and when it will be done
Excellent Customer Service

Marketing is about satisfying the
customer’s wants and needs
 Customer
service provides the initial contact
with the customer and helps them pick the
best product
 Customer service also is involved in the
follow-up after the purchase
 Are
there any issues that have occurred?
 Is the customer really satisfied?
 What can we do to make things better?
Touch Points

A touch point is when a customer comes
into contact with the company’s products
 This
can be through an advertisement
(billboard, TV, radio, newspaper/magazine)
 It can be seeing the product on a store shelf
 It can be seeing/hearing a review of the
product by a media source (think about a
movie review)
 Inform, Remind, Persuade (Promotion)
Reasons people buy

Buyers often fall into two categories:
 Rational
 Emotional

The best sales people use a combination
of the two reasons
 Even
a person making a logical buying
decision often is influenced by emotional
reasons (needs a car but wants a red sports
car)
 Emotional buyers often like having a logical
reason or two to justify his/her purchase
Corporate Responsibility

Corporate responsibility is all about doing
the “right thing” in the eyes of society
 Institutional
promotion is focused on
promoting the company in the eyes of the
community
 Minimizing pollution
 Caring for employees (good pay and benefits)
 Donating to the local community (little league
sponsorships, medical research grants,
scholarships for students, donations to
schools, etc.)
Effects of taking positive actions
Increasing efficiency – reduces costs,
faster deliver times, lower prices
 Brand value - insulates the product from
pricing fluctuations, stabilizes demand,
attracts new customers
 Market share – the percentage (%) of the
whole industry’s sales that the company
controls, building marketing share often
increases profitability

Effects of taking positive actions
cont.
Customer loyalty (sometimes called
patronage) – limits the negative effects of
strong competitor actions, gives the
company time to improve its products or
customer service
 Enhanced business reputation – builds
customer loyalty, market share, and brand
value

Negative company actions that
should be avoided
Not keeping promises to customers = their
not being satisfied
 Delivering low quality products will result
in customer complaints and lost future
sales, high returns and increased costs of
doing business
 High-pressure sales = customers buying
the wrong products sometimes and
increased returns

Negative company actions that
should be avoided cont.
Acting unethically – taking advantage of
customers, employees, vendors, and/or
breaking laws will result in future lost
sales and possibly high returns
 Responding inappropriately to crises –
raising prices unfairly after a disaster, not
taking responsibility for mistakes, failing to
deliver on promises made
 Failing to provide what customers want =
loss of business

Customer satisfaction vs. customer
loyalty

What is the difference?
 Satisfaction
looks at the customer’s feelings
during and after a specific purchase (generally
short-term)
 Loyalty
addresses how the customer feels
about the product and/or company over the
long-term