Marketing Principles. February 27th, 2009. End of year Exam: 2 of 35.
-
Upload
shannon-maxwell -
Category
Documents
-
view
216 -
download
0
Transcript of Marketing Principles. February 27th, 2009. End of year Exam: 2 of 35.
Marketing Principles.
February 27th, 2009
End of year Exam:2 of 35
Sample Paper (August 2007)3 of 35
Consumer Decision making
4 of 35
Step 1: Problem Recognition Step 2: Information Search Step 3: Alternative Evaluation Step 4: Purchase Step 5: Post purchase Experience
Chap 5 of Book
Consumer Decision making
4 of 35
Step 1: Problem Recognition
Book Page 150 (Chap 5 Consumer behaviour)Problem Recognition occurs when consumers realize that they need to do something to get back to a normal state of comfort.
Internal stimuli are perceived states of discomfort – hunger or boredom (physical or psychological)
External stimuli are informational cues from the marketplace that lead the consumer to realize the problem
Consumer Decision making
4 of 35
Step 2: Information Search
This stage can be as simple as just scanning one’s memory.
But usually we actively search through brands, or at least a subset of brands which feature:
*The awareness set consists of brands of which a consumer is aware
*An evoked set consists of the brands in a product category that the consumer remembers at the time of decision making
* Some brands in the evoked set will be eliminated straight away and just the consideration set will remain
Consumer Decision making
4 of 35
Step 3: Alternative Evaluation
Consumers use 1 of 2 different choice models when evaluating alternatives:
- Compensatory- Non Compensatory
Compensatory; - considers all the attributes of a product, gives each a score and adds up the results
Non Compensatory Evaluation Methods; - conjunctive, disjunctive, lexicographic & elimination by aspects model.
Consumer Decision making
4 of 35
Step 4: Purchase
In most cases, this is a straight forward process. The buyer arranges for the terms of the transaction and seeks transfer of ownership.
Pg. 153 book
Consumer Decision making
4 of 35
Step 5: Post Purchase Evaluation
This is a very important time for the marketer. Consumer can be either satisfied or dissatisfied.
They may get “Cognitive Dissonance”….a feeling of post purchase doubt
Q2 (August 2007)
4 of 35
Customer Research & the Research ProcessCustomer Research & the Research Process
Presentation of results
Data analysis and interpretation
Datacollection
Researchdesign
Problemdefinition
The market research process:
Feedback
Feedback
Copyright ©2005 by South-Western, a division of Thomson Learning. All rights reserved.
More details of this process on pg. 102 of book, Fig 4.1
MIS
4 of 35
It is made up of intelligence gathered about the market environment….ie. The PEST forces, from internal and external sources
An MIS is different to basic internal records in that an MIS seeks to priorities the information that is critical to decision making.
Internal records actually become intelligence?
Quantative vs Qualitative Research
Q3 (August 2007)
Consumer Segmentation Bases
1. Geographic
3.Geo-demographic
6. Multi-variable
5. Behaviour 4. Psychographic
2. Demographic
8 of 35
Example: Positioning - Computers
Which consumer segment buys which type of computer? Look Pg 427 of the book (Imprint brand message in mind of consumer)
24 of 35
Positioning Strategies
On the basis of: • Specific features• Specific usage occasions• Specific user groups• Head to head with key competition• Service superiority
• Note: that you might have to engage in repositioning your product regularly.
25 of 35
Q4 (August 2007)
Managing Products through their Life Cycles
Introductory strategies Rapid Skimming. Slow Skimming. Rapid Penetration. Slow Penetration.
Introductory Stage
Competitive and market conditions in the introductory stage
Sales – low. Costs- substantial Profits – negligible – even negative. Cash flow – negative. Customers – innovative – early adopters. Competitors – few or non-existent.
Introductory Stage
Growth
Characterised by rapidly increasing product demand, new market entrants rapidly increasing profits Early adopters & additional customers are
purchasing Price stabilises or falls Promotional expenditure remains
constant with eventual decline due to offset against increased sales
Growth Strategies: Improve product quality and features Adds new models, sizes, flavours.. Enters new market segments Increases distribution &/ new distribution Advertising shift from awareness to
features Lowers prices to attract new customers
Growth
Maturity Sales initially increase but at a slower rate
as market becomes saturated and as competitive pressures reach their peak.
Sales and profits typically decline in the latter half of the maturity stage.
Even if new users are found and usage rates are increased, product sales may eventually start a long-term decline, as when a substitute product that offers a superior set of benefits displaces the “old” product.
Competitive and Market Conditions in Maturity Stage:
Sales slows. There are 3 phases of maturity: growth,
stable and decline. Sales possible only by population growth The longest stage of the life cycle. Majority of products are in this stage. Greatest numbers of competitors. Intense rivalry and overcapacity. Marketing effort - focused on early
majority and late majority customers.
Maturity
Decline
Sales decline happens due to: Technological advances (word processor,
Polaroid) Shifts in consumer tastes (Ovaltine,
Yardley Cosmetics) Increased competition These factors = increased price cuts and
profit erosion Decline can be slow (sewing machines) or
fast (floppy disks)
Decline can be reversed – VW Beetle, Lucozade (Medicinal to Sport)
Kodak are currently trying to boost sales – filming processing business is losing sales due to digital cameras – will Kodak survive!
Decline
Limitations of PLC
Usually difficult to attribute an accurate timescale to the PLC
How can you tell with 100% certainty that a product is in decline
Cannot predict the future
For Exam
Stick to 1 hour limit for each question
Only attempt 2 questions!
Use real examples to back up your answers.