Marketing and Consumer Behavior © 2014 Pearson Education, Inc. 12-1 chapter 12 Better Business 3rd...

Marketing and Consumer Behavior

© 2014 Pearson Education, Inc. 12-1

chap

ter

12

Better Business

3rd EditionSolomon (Contributing Editor) ·

Poatsy · Martin

What is Marketing? According to the American Marketing Association…

© 2014 Pearson Education, Inc. 2

Marketing – the activity, set of institutions, and processes for creating, communicating,

delivering, and exchanging offerings that have value for customers, clients, partners, and

society at large

Marketing: A better definitionProcess of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to facilitate exchanges that satisfy

customer needs and organization objectives


Facilitate Exchanges(Encourage Purchase)

Satisfy CustomerNeeds

Product Pricing Promotion Place

Ideas Services Goods

2 Important Functions

Marketing Fundamentals


The Evolution of Marketing


Production Era & Sales Concept Era

Production EraProduction Era

• Industrial Revolution until 1920s

• Limited supplies and strong demand

• A good-quality product sold itself

• Industrial Revolution until 1920s

• Limited supplies and strong demand

• A good-quality product sold itself

Sales Concept EraSales Concept Era

• Mid 1920s to early 1950s• Production greater

than demand• Greater competition

for customers• Heavy public advertising

• Mid 1920s to early 1950s• Production greater

than demand• Greater competition

for customers• Heavy public advertising


Marketing Concept Era:The Marketing Concept is a business philosophy that a firm should continually try to offer products that satisfy customers needs while also making a business profit


The Societal Marketing Era:Social Marketing is incorporating the marketing concept with social

responsibility

• Began in late 1960s and early 1970s• Marketing Concept + Social Responsibility• Challenged companies to work for the benefit

of consumers and society while making a profit


The Customer Relationship Management (CRM) Era:

CRM is the process of establishing mutually-beneficial long-term relationships with individual customers to foster loyalty and repeat business


Good CRM incorporates technologies and information

that allows businesses to develop marketing strategies

to sustain long-term customer relationships

Nontraditional Marketing


Benefits of Marketing:Marketing Provides Value…the product benefits are greater than or equal to its

price

• Society• Investors &

employees• Sellers• Consumers

– Utility…ability of product to satisfy customer need or want

– Value…product benefits are greater than or equal to its price


Marketing Provides Utility:Utility is the ability of a product to satisfy consumer needs


FormUtility

Utility created by converting production inputs into finished products (ex. BMW

car, Apple iPhone)

TimeUtility

Utility created by making a product available when customers wish to

purchase it (ex. fast food after midnight, Christmas trees after

Thanksgiving)

PlaceUtility

Utility created by making a product available at a location where

customers wish to purchase it (ex. popcorn at movie theatre, a pair of

jeans at department store)

Possession /Ownership

UtilityUtility created by transferring title

(or ownership) of a product to a buyer (ex. credit card acceptance at stores, finance depts

at car dealerships)

The ability of a

product to

satisfy needs

and wants.

Criticisms of Marketing

• Misuse of personal information

• Hidden fees • Consequences of

purchase


Markets and Their Classifications


Market• A group of individuals or organizations, or both, that need

products in a given category and that have the ability, willingness, and authority to purchase such products

2 Main Types of Markets1) Consumer markets

• Purchasers and/or household members who intend to consume or benefit from the purchased products and who do not buy products to make a profit

2) Business-to-business (industrial) markets• Producer, reseller, governmental, and institutional customers

that purchase specific kinds of products for use in making other products for resale or for day-to-day operations

Differences Between B2B &Consumer Markets


Marketing Strategy:A formal plan that will enable an organization to make the best use of its

resources and advantages to meet its objectives


Consists of 2 Basic Steps:1. Identify your Target

Market – the specific group of potential customers on which a firm directs its marketing efforts

2. Create your Marketing Mix – the combination of controllable elements of a marketing plan designed to serve a target market, including product, price, distribution and promotion

The 5 Cs of Marketing


Finding A Target Market


Target market selection and evaluation• Target market

– A group of individuals, organizations, or both for which a firm develops and maintains a marketing mix suitable for the specific needs and preferences of that group

• Market segment – A group of individuals or organizations within a

market that share one or more common characteristics

• Market segmentation– The process of dividing a market into segments

and directing a marketing mix at a particular segment or segments rather than at the total market

A Well Chosen Target Market


Size: There must be enough people in your target group to support a business

Profitability: The people must be willing and able spend more than the cost of producing and marketing the product

Accessibility: Your target must be reachable through channels that your business can afford

Limited Competition: Look for markets with limited competition; a crowded market is tough to crack

Common Bases for Segmentation


The Marketing Mix: The 4 Ps


• Product differentiation• BrandProduct

• Cover costs • Competitively pricedPrice

• Inform and persuade customers to buy• Build positive customer relationshipsPromotion

• Distribution channel• Distributors and wholesalersPlace

Product

Decisions about product’s design, purpose, brand name,

packaging, and warranties

Promotion

Decisions that sellers use to persuade and communicate to people to buy their products /

services

Place (Distribution)

Decisions based on moving products from producers to

consumers (marketing channels)

Price

Decisions based on price setting (what to charge for

product) including rebates, and discounts

The 4 Cs


The Marketing Process


The Marketing Environment


• Markets must conduct environmental scanning to analyze the external environment

• External environment includes competition and market share analysis

• Key external factors must be considered:– Economic– Social/Cultural– Technological– Political/Legal– Competitive– Global

Consumer Behavior: Decisions! Decisions! Decisions!

The ways individuals or organizations search for, evaluate, purchase, use, and dispose of goods and services

Knowledge of consumer behavior helps marketers:– select the most profitable target markets – implement the marketing mix


Understanding customers is critical

• Why do people buy one product but not another?

• How do they use the products they buy?

Understanding Today’s Customers


Today’s Customers are:• Sophisticated

• Demanding

• Price Sensitive

Why is Customer Satisfaction Important?• Getting new customers costs more than

keeping them.

• Long-term customers boost profits.

• Satisfied customers tell their friends.

• Customers pay more for good service.

• Unhappy customers spread the word.

Marketing Research & Planning: So What Do They REALLY Think?


Identify external opportunities

Monitor and predict customer behavior

Evaluate and improve marketing mix

Marketing research involves gathering, interpreting, and applying information to

uncover opportunities and challenges

Why to find information?

1) Secondary Data – Information that already exists, has already been collected

2) Primary Data – Information collected specific to the problem

Primary & Secondary Sources of Data


The Consumer Decision-Making Process


• Need recognition• Information search• Evaluation of

alternatives• Purchase or no

purchase decision• Postpurchase

evaluation

What Influences Consumer Decision Making?


Marketing and Consumer Behavior © 2014 Pearson Education, Inc. 12-1 chapter 12 Better Business 3rd...

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Transcript of Marketing and Consumer Behavior © 2014 Pearson Education, Inc. 12-1 chapter 12 Better Business 3rd...