The Basics of Marketing

Chapter 4

What do you think is meant by the ad’s headline?

This is a photograph of Hong Kong.

VISA is attempting to attract customers who do business globally.

This says VISA is an accepted payment worldwide.

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Marketing Has Changed Marketing has changed a great deal from the way it

was used by businesses many years ago. The earliest use of marketing was to move products

from the producer to the consumer. Marketing has become more effective because it is

integrated into other business activities. When marketing is integrated, it is considered an

essential part of the business, and it is involved in all important business decisions.

Most marketing strategies today are developed as a result of business opportunities, not problems.

Market opportunities include new markets and ways to improve a company’s offerings in current markets.

In the past, many businesses reduced marketing efforts when faced with financial problems.

What Does Marketing Mean to a Business?The primary focus of the business should be

on the customer’s needs and wants, this is called the marketing concept.

Businesses that have adopted the marketing concept use a totally new approach to thinking and planning – they study the market.

A business takes a big risk when it is unwilling to study the needs of its customers.

Today’s marketers are continuously looking for market opportunities.

Without the marketing concept, a business will develop a product or service and then decide how to market the product.

Putting Marketing Up FrontStrategy is planning that identifies how a

company expects to achieve its goals. It is important to remember that various

groups of customers may have different needs.

Marketing and product planning should occur at the same time.

Most of today’s consumers are very well informed, they know what they want.

Businesses that are not prepared for competition have a difficult time staying in the market.

A business that believes in the marketing concept focuses its business planning on satisfying the needs and wants of customers.

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How Does the Marketing Concept Affect Planning?

Businesses need to place the correct emphasis, not necessarily the same amount, on each of the four marketing mix elements.

Producers and manufacturers do not sell directly to final consumers, but they must also understand and respond to consumer needs.

Producers and manufacturers need to be concerned about the needs of other businesses in the channel of distribution – all businesses that move products from producer to consumer.

Channel members are the businesses used to provide many marketing functions during the distribution process.

Examples of channel members include producers, retailers, and wholesalers. The retailer usually makes the final pricing decisions.

Customers will blame all channel members if a product does not meet their needs.

Most service businesses do not use a channel of distribution. Distribution planning is important to service businesses

because the service must be available where and when the customer wants it.

Combining Parts of the Marketing MixProduct that

offers choicesDistribution /Place

that provides convenience

Price that gives value

Promotion that aids decision-making

Satisfied customers

Customers do not always want the lowest price. Many are looking for the best value!

Consumer Decision MakingConsumers make decisions every day.A decision is a choice among

alternatives.Customers are quite different from one

another and they select products and services to meet their unique needs.

A market segment is a group of similar consumers within a larger market.

A market opportunity analysis studies and prioritizes market segments to located the best potential market based on demand and competition.

Consumer Decision-Making Stages Consumers make a series of decisions when deciding on a purchase.◦Recognize a need◦Identify alternatives◦Evaluate choices◦Make a decision◦Assess satisfaction

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Non-Business OrganizationsPrimary focus is on something other

than providing products and service for a profit.

Examples ◦ Government agencies◦ Churches◦ Schools◦ Museums◦ Professional organizations

Non-Business OrganizationsNonprofit organizations should also be

concerned about marketing, it will help them better satisfy their target market.

A target market is a clearly defined segment of the market which a business or non-profit organization wants to appeal to.Target marketing is

focusing all marketing mix decisions on the specific group of people you want to reach.

Professional GolfingDescribe the target market

for a professional golfing event.

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Professional RodeoDescribe the target

market for a professional rodeo event.

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Video: NASCARDescribe the target market for a NASCAR

event.

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Chapter 6Marketing Starts With Customers

Why Study Consumer Behavior?Marketing begins with customers.To effectively implement the

marketing concept, marketers must understand consumer behavior.

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Understanding consumer behavior will help marketers make sure their products and services match customer needs.

Understanding Consumer BehaviorConsumer behavior is the study

of consumers and how they make decisions.

Final consumers buy products or services for personal use. Sometimes called the final customer.

Business consumers buy goods and services to produce and market other goods and services or for resale. 17

Frameworks 5.2

Consumers’ Wants & NeedsA want is an unfulfilled desire.

◦Products purchased to satisfy a want are not essential for living, but needed to maintain a certain lifestyle.

◦A non-economic want is a desire that cannot be satisfied with a purchase. An example of a non-economic want is friendship.

A need is anything you require to live. Food, clothing, shelter, and water are considered needs.

18Frameworks 5.2.1

Consumers’ Wants & Needs

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Four out of five teens (17 million) carry a wireless device. This is a 40% increase since 2004.

Is the desire to have the newest cell phone a need or a want?

Frameworks 5.2

Abraham Maslow

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1908-1970

This American physiologist studied needs and determined that people satisfy their needs in a rank order (known as a hierarchy) with lower level needs being satisfied first.

Maslow said that people are on different levels of his hierarchy. Some people feel safety needs as more important to them, than social or esteem needs.

Maslow’s needs include: Physiological, Security, Social, Esteem, and Self-Actualization

Maslow’s Hierarchy of Needs

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Esteem (respect and recognition)

Social (friends, love, belonging)

Security (physical safety and economic security)

Physiological (food, sleep, water, shelter, air)

Self-Actualization (to realize your potential)

Physiological Needs food, sleep, water, shelter, air

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Queen Bed Sets Starting at: $2,599.98Sale Price: $2,399.98

Security Needsphysical safety and economic security

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Social Needsfriends, love, belonging

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“At the Arizona Country Club, members become friends for a lifetime and families share experiences that are cherished for generations. Our commitment to creating a lasting impression is the reason we have earned the distinction for being one of the friendliest country clubs in the Southwest.”

Esteem Needsrespect and recognition

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Self Actualization Needsto realize your potential

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What Motivates Buyers?All of our actions are influenced

by motivation.Motivation is the set of positive or

negative factors that direct individual behavior.

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Frameworks 5.3.1

What Motivates Buyers?Buying motives are the reasons

that you buy.◦Emotional motives are reasons to

purchase based on feelings, beliefs, or attitudes.

◦Rational motives are reasons to buy based on facts or logic.

◦Patronage motives are based on loyalty to a particular company or brand.

28Frameworks 5.3.1

Emotional Motiveslove, affection, guilt,

status, fear

29Frameworks 5.3.1

Emotional Motiveslove, affection, guilt,

status, fear

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Emotional Motiveslove, affection, guilt,

status, fear

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Emotional Motiveslove, affection, guilt,

status, fear

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Senior citizen above receives a flu shoot. Why?

Advertiser know that fear is a very strong motive.

Rational MotivesReasons for buying are based on

logic or facts.Includes factors such as saving

money or obtaining the highest quality or greatest value.

Virtually all buyers have a combination of rational and emotional motive.

33Frameworks 5.3.1

Patronage MotivesIf you shop in the same store

time after time, your motivation for choosing the business is a patronage motive – loyalty.

Business people are much less likely than final consumers to base purchases on patronage motives.

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The Consumer Decision-Making ProcessBuying Behavior is the decision

processes and actions of consumers as they buy services and products.

The Consumer Decision-Making Process is the process by which consumers collect and analyze information to make choices among alternatives.

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The ConsumerDecision-Making Process

Problem Recognition

Information Search

Alternative Evaluation

Purchase

Postpurchase Evaluation

5 Steps

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The Consumer Decision-Making Process

Problem Recognition

The first step is problem recognition.

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The ConsumerDecision-Making Process

Information Search

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Alternative Evaluation

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The Consumer Decision-Making Process

Purchase

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The ConsumerDecision-Making ProcessPostpurchase

EvaluationDid the product you purchased fulfill your need.

A help line telephone number is often provided by companies to encourage satisfaction after the purchase.

Membership in an owner’s association may be provided.

1-800-BUTTERBALL

Influences on Buying DecisionsPersonal identity is the

characteristics and character that make a person unique. This includes personality, gender, ethnicity, and age.

Personality is an enduring pattern of emotions and behaviors that define an individual.

Attitude is a frame of mind developed from a person’s values, beliefs, and feelings. 42

Influences on Buying DecisionsSelf-concept is an individual’s belief

about his or her identity, image, and capabilities.

Lifestyle is the way a person lives as reflected by material goods, activities, and relationships.

Gender also influences many decisions and actions.

Ethnicity is a set of characteristics based on ancestry, country of origin, language, or traditions.

Age is also has a major influence on consumer behavior.

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Cultural and Social EnvironmentCulture is the history, beliefs, customs,

and traditions of a group.A reference group is a group of people

or an organization that an individual admires, identifies with, and wants to be part of.

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Cultural and Social EnvironmentYour reference group has an important

influence on much of your behavior and image.

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Video: Too Many Men In China

What happens to the culture of a society when the government inadvertently causes an imbalance in the number of men to women?

No one knows … this situation has never happened before.

Types of Decision-MakingRoutine decision making is used

for purchases that are made frequently and do not require much thought.

Limited decision making takes more time and is associated with a more expensive product that is bought les frequently.

Extensive decision making is done for very expensive products and all 5 steps of the decision making process will be used.

47Frameworks 8.6

Types of Decision-MakingRoutine decision making

48Frameworks 8.6

Types of Decision-MakingLimited decision making

49Frameworks 8.6

Types of Decision-MakingExtensive decision making

50Frameworks 8.6

Marketers’ ResponseMarketers will have the greatest

opportunity to explain the benefits of their products and services and how they can satisfy consumer needs when the customer uses extensive decision making.

The appropriate role of marketers in consumer decision making is to match their products and services to the needs and expectations of customers.

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Test

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