Fourth Edition Copyright ©2003 Prentice Hall, Inc. PART 4........................ Understanding...
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Transcript of Fourth Edition Copyright ©2003 Prentice Hall, Inc. PART 4........................ Understanding...
Fourth EditionFourth Edition
Copyright ©2003 Prentice Hall, Inc.Copyright ©2003 Prentice Hall, Inc.
PART 4 . . . . . . . . . . . . . . . . . . . . . . . .PART 4 . . . . . . . . . . . . . . . . . . . . . . . .Understanding Principles of MarketingUnderstanding Principles of Marketing
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Chapter 10Chapter 10
Understanding Marketing Processes and Consumer
Behavior
Understanding Marketing Processes and Consumer
Behavior
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Marketing process affects your daily lives
Discussion: what did you have breakfast today (coffee, cornflakes..). Why?
What did you stop to take? Why
Should be guided to marketing mix.
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What Is Marketing?
““Planning and executing the conception, pricing, Planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual services to create exchanges that satisfy individual and organizational objectives”and organizational objectives”
““Planning and executing the conception, pricing, Planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual services to create exchanges that satisfy individual and organizational objectives”and organizational objectives”
Finding a need and filling it!Finding a need and filling it!Finding a need and filling it!Finding a need and filling it!
OROR
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The Influence of MarketingPermeates Everyday Life
Goods
Consumer
Industrial
Services
Ideas Relationship marketing Relationship marketing emphasizes lasting emphasizes lasting relationships with relationships with
customers and supplierscustomers and suppliers
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Products classification
Consumer goods: Products purchased by consumers for personal consumption or use. (durable and non-durable)
Industrial goods: Products purchased by companies to produce other products.
Services: Intangibles, such as time, expertise, experiences, that can be purchased.
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CompetitiveEnvironment
Political& Legal
Environment
Social &Cultural
Environment
Economic Environment
Technological Environment
The External EnvironmentShapes Marketing Programs
The Firm & It's Marketing Plan Plans Strategies Decisions
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Substitute product competition
Brand competition
International competition
The Competitive EnvironmentDrives Marketing Decisions
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The Competitive EnvironmentDrives Marketing Decisions
Substitute product competition: Products that are dissimilar from those of competitors (appear to be different), but can fulfill the same need (e.g. television and computer games are very different from one another, but both fulfill the need for entertainment).
Brand competition: Occurs between similar products (e.g. Zest bar soap and Irish Spring bar soap; KFC and MacDonald foods).
International competition: matches the products of domestic marketers against those of foreign competitors
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Marketing MixThe “Four P’s”
(Distribution)(Distribution)
roductroductroductroduct
ricingricingricingricing
romotionromotionromotionromotion
lacelacelacelace
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Marketing MixThe “Four P’s”
Product: The good, service, or idea that is marketed to fill consumer wants and needs. Improving existing products and developing new products are among the marketer’s most important tasks.
Product differentiation: Differentiation is a source of competitive advantage.
Pricing: Selecting the most appropriate price at which to sell a product. Lower prices generally lead to higher sales volume, while higher prices generally lead to higher profits per unit.
Promotion: Techniques for communicating information about products. This is clearly the most visible element of the marketing mix.
Place (distribution): Determining the most effective and efficient way to get products from producers to consumers. Channels of distribution.
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The Promotional Mix
Advertising
Personal Selling
Sales Promotions
Public Relations
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The Promotional Mix
Advertising: Any form of paid, non-personal communication used by an identified sponsor to persuade or inform potential buyers about a product (e.g. Pepsi used Brittany Spears to advertise its products during the 2002 Super Bowl game.)
Personal selling: Person-to-person sales. Industrial goods receive the bulk of personal selling (e.g. Boeing uses personal selling to promote its fighter jets to the military).
Sales promotion: One-time direct inducements\incentives to buyers, including free gifts, coupons, and package inserts (e.g. Clinique cosmetics company periodically offers gift-with-purchase promotions through department stores).
Public relations: All communication efforts directed at building goodwill (e.g. Ronald McDonald House). Publicity is not paid for by the firm, and the firm does not control its content, so it can sometimes backlash.
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Market Segmentation & Target Marketing
Market SegmentationDividing a market into customer categories
Target MarketingSelecting a category of customers with similar wants and needs who are likely to respond to the same products
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Identifying Market Segments
Psychographic Psychographic VariablesVariables
Geographic Geographic VariablesVariables
Demographic Demographic VariablesVariables
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Identifying Market Segments
Geographic variables: The geographical units that may be considered in developing a segmentation strategy (e.g. coastal areas, rural areas, the Sun Belt). Not all products are geographically sensitive.
Demographic variables: Characteristics of populations that may be considered in developing a segmentation strategy (e.g. age, income, gender, race).
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Identifying Market Segments
Psychographic variables: Consumer lifestyles, opinions, interests, and attitudes that may be considered in developing a segmentation strategy (e.g. fashion-consciousness, thrill-seeking). Psychographics can sometimes be changed by marketing efforts.
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Consumer Behavior
Psychological Influences
Personal Influences
Social Influences
Cultural Influences
Why do Why do consumers consumers
purchase and purchase and consume consume products?products?
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Postpurchase Evaluation
Purchase Decision
Evaluation of Alternatives
The Consumer Buying Process
Information Seeking
Problem Recognition
Psychological Personal Social Cultural
Personal & Environmental FactorsPersonal & Environmental Factors
Product Pricing Promotion Place
Marketing FactorsMarketing Factors
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Organizational Markets
Industrial Market
Government & Institutional Market
Reseller Market
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Organizational Buying Behavior
Differences in buyers
Professionals
Specialists
Experts
Differences in buyer/seller relationships
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Product Features and Benefits
FeaturesFeatures
Tangible and intangible Tangible and intangible qualities that a company qualities that a company builds into its productsbuilds into its products
BenefitsBenefits
The results of using The results of using those productsthose products
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Classifying Products
Consumer
Convenience Goods
Shopping Goods
Specialty Goods
Industrial
Expense Items
Capital Items
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Product Offerings
Product LineProduct Line
A group of similar products, intended for similar A group of similar products, intended for similar buyers, who will use them in similar ways.buyers, who will use them in similar ways.
Product MixProduct Mix
The total group of products that a company offers The total group of products that a company offers for sale.for sale.
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Developing New Products
The New Product Development Process
Product Mortality Rates
Strategy of introducing new products to respond quickly to customer or market changes
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Creating Product Brands
BrandingBranding
Using symbols to communicate the qualities Using symbols to communicate the qualities of a given product to create loyal consumersof a given product to create loyal consumers
Types of Brands:Types of Brands:
National BrandsNational Brands
Licensed BrandsLicensed Brands
Private BrandsPrivate Brands
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The World’s 10 Most Valuable Brands
1. Coca Cola
2. Microsoft
3. IBM
4. GE
5. Nokia
6. Intel
7. Disney
8. Ford
9. McDonald’s
10. AT&T
Source: “The Best Global Brands,” Source: “The Best Global Brands,” BusinessWeekBusinessWeek, August 6, 2001, August 6, 2001
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The Future of Top Brands
Gaining Value…Gaining Value…
StarbucksStarbucks +32%+32%
SamsungSamsung +22%+22%
Financial TimesFinancial Times +14%+14%
GEGE +11%+11%
GuinnessGuinness +11%+11%
Losing Value…Losing Value…
XeroxXerox -38%-38%
Amazon.comAmazon.com -31%-31%
Yahoo! Yahoo! -31%-31%
DuracellDuracell -30%-30%
FordFord -17%-17%
Source: “The Best Global Brands,” BusinessWeek, August 6, 2001 Source: “The Best Global Brands,” BusinessWeek, August 6, 2001
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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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The International Marketing Mix
PRODUCTSPRODUCTS
PRICINGPRICING
PROMOTIONPROMOTIONDISTRIBUTIONDISTRIBUTION
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Small Business and the Marketing Mix
ProductsProducts
PricingPricing
PromotionPromotion
DistributionDistribution
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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