Download Business Essentials 5e.

Chapter 10
Understanding
Marketing Processes
and Consumer
Behavior
PowerPoint Presentation by Charlie Cook
Copyright © 2005 Prentice Hall, Inc.
All rights reserved.
Key Topics
• Definition of marketing
• The external marketing environment
• Segmentation and target marketing
• The consumer buying process
• Organizational markets and buying behavior
• Consumer and industrial products
• Branding and packaging
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10–2
What Is Marketing?
“Planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, and
services to create exchanges that satisfy
individual and organizational objectives”
OR
Finding a need and filling it!
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10–3
Providing Value and Satisfaction
• Values and benefits
 Value: Benefits/Costs
• Value and utility
 Utility: ability of a product to satisfy a human want or
need.
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10–4
The Influence of Marketing Permeates
Everyday Life
• Goods
 Consumer : purchased by
consumers for personal
use
 Industrial: Purchased by
companies to produce
other products
Relationship marketing
• Services: intangible
emphasizes lasting
products such as time,
relationships with
activity or expertise.
customers and suppliers
• Ideas
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10–5
The External Marketing
Environment
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Figure 10–1
10–6
The Competitive Environment
Drives Marketing Decisions
• Substitute product competition
 Dissimilar products that fulfill same need.
• Brand competition
 Occurs between similar products
• International competition
 Domestic versus foreign products
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10–7
Strategy: Marketing Mix: The “Four P’s”
roduct
ricing
lace
romotion
(Distribution)
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10–8
Product differentiation
• Creation of a product or a product image that
differs enough from existing
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10–9
The Promotional Mix
Personal
Selling
Advertising
Sales
Promotions
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Public
Relations
10–10
Market Segmentation and Target
Marketing
• Market Segmentation
 Dividing a market into customer
categories
• Target Marketing
 Selecting a category of
customers with similar wants
and needs who are likely to
respond to the same products
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10–11
Identifying Market Segments
Geographic Demographic
Variables
Variables
Psychographic
Variables
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10–12
Demographic Variables
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Table 10–1
10–13
Consumer Behavior
• Psychological Influences: motivations, perceptions, attitude, ability to
learn
• Personal Influences: lifestyle, personality, economic status
• Social Influences: family, friends, co-workers
• Cultural Influences:
 Brand loyalty: pattern of regular consumer purchasing based on
satisfaction with a product
Why do consumers
purchase and
consume products?
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10–14
The Consumer Buying Process
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Figure 10–2
10–15
Data warehousing and data mining
• How do firms collect information about you?
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10–16
Organizational Markets
Industrial
Market:
businesses
buy goods
to by used
in making
other goods
Reseller
Market :
consists of
intermediaries
that buy and
resell finished
goods
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Government and
Institutional
Market: includes
hospitals,
universities,
military etc.
10–17
Organizational Buying Behavior
• Differences in buyers
 Professionals
 Specialists
 Experts
• Differences in buyer/seller
relationships
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10–18
What is a Product?
• Feature
 Tangible and intangible qualities that a company
builds into the product
• Value package
 A product has a bundle of attributes
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10–19
Classifying Products
• Consumer
 Convenience Goods:

Inexpensive, purchased
and consumed regularly
and rapidly
 Shopping Goods:

Moderately expensive,
infrequently purchased
• Industrial
 Expense Items:

Purchased regularly and
consumed rapidly for
daily operations
 Capital Items

Expensive, long lasting,
infrequently purchased
 Specialty Goods:

Expensive, rarely
purchased product
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10–20
Product Offerings
• Product Line
 A group of similar products, intended for similar
buyers, who will use them in similar ways.
• Product Mix
 The total group of products that a company offers
for sale.
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10–21
Developing New Products
•
•
•
The New Product Development Process
Product Mortality Rates
Speed to Market :
Strategy of introducing new products to respond
quickly to customer or market changes
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10–22
Products in
the Life Cycle
Stages, Sales,
Cost and Profit
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Figure 10–4
10–23
Creating Product Brands
• Branding
 Using symbols to communicate the qualities of a
given product to create loyal consumers
 Brand awareness
• Types of Brands:
 National Brands: produced, distributed, and carry
name of manufacturer.
 Licensed Brands: product whose name the seller
has purchased the right from an organization or
individual
 Private Brands: developed by retailers
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10–24
Product Packaging
• Attracts consumers
• Displays brand name
• Protects contents
• Supplies information
• Communicates features and
benefits
• Provides features and
benefits (e.g. easy pour
spout)
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10–25
The International Marketing Mix
PRODUCTS
DISTRIBUTION
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PRICING
PROMOTION
10–26
Small Business and the Marketing Mix
• Products
• Pricing
• Promotion
• Distribution
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10–27
Chapter Review
• Define marketing.
• Describe the forces of the external marketing
environment.
• Explain market segmentation and target
marketing.
• Describe the consumer buying process.
• Discuss the organizational market categories.
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10–28
Chapter Review (cont’d)
• Define product and distinguish between
consumer and industrial products.
• Explain the importance of branding and
packaging.
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10–29