11 chapter

Marketing Processes and Consumer Behavior

Business Essentials, 7th Edition Ebert/Griffin

Instructor Lecture PowerPoints

2009 Pearson Education, Inc.
PowerPoint Presentation prepared by Carol Vollmer Pope Alverno College

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LEARNING OBJECTIVES
After reading this chapter, you should be able to:
1. Explain the concept of marketing and identify the five forces that constitute the external marketing environment. 2. Explain the purpose of a marketing plan and identify the four components of the marketing mix. 3. Explain market segmentation and how it is used in target marketing. 4. Describe the key factors that influence the consumer buying process. 5. Discuss the three categories of organizational markets.
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L E A R N I N G O B J E C T I V E S (contd)
After reading this chapter, you should be able to:
6. Explain the definition of a product as a value package and classify goods and services.
7. Describe the key considerations in the new product development process. 8. Explain the importance of branding and packaging. 9. Discuss the challenges that arise in adopting an international marketing mix.

10. Identify the ways that small businesses can benefit from an understanding of the marketing mix.

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Whats in It for Me? Why does marketing matter to you?

By grasping this chapters presentation of marketing methods and ideas, youll benefit in two ways:
Youll be better prepared to use marketing in your career as both employee and manager Youll be a more informed consumer with greater awareness of how businesses use marketing to gain your purchases

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What Is Marketing? Marketing

A set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders (AMA)
Finding a need and fulfilling it

Providing Value and Satisfaction

Consumers buy products that offer the best value when it comes to meeting their needs and wants
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What Is Marketing? (contd)

Value and Benefits
Value compares a products benefits with its costs. Benefits include not only the functions of the product but also the emotional satisfaction associated with owning, experiencing, or possessing it.

Value and Utility

Form utility Time utility Place utility Ownership utility

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http://www.tappedthemovie.com/

What Is Marketing? (contd)

Goods, Services, and Ideas
Consumer goods: Tangible goods that consumers may buy for personal use
Consumer marketing

Industrial goods: Physical items used by companies to produce other products

Industrial marketing

Services: Products with intangible (nonphysical) features

Service marketing

Relationship Marketing
Emphasizes building lasting relationships with customers and suppliers

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What Is Marketing? (contd)

Data Warehousing and Data Mining for Building Customer Relationships
Data warehousing: The compiling and storage of consumer data Data mining: Automating the massive analysis of data by using computers to sift, sort, and search for previously undiscovered clues about what customers look at, react to, and how they might be influenced
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What Is Marketing? (contd)

The Marketing Environment
Political-legal environment Sociocultural environment Technological environment

Economic environment
Competitive environment
Substitute products

Brand competition
International competition
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What Is Marketing? (contd) Strategy: The Marketing Mix

Marketing Plan
A detailed strategy for focusing marketing efforts on consumer needs and wants

Marketing Mix
Product
Differentiating a product

Pricing
Selecting the best price at which to sell a product

Place
Distributing a product through the proper channels

Promotion
Communicating information about a product
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Target Marketing and Market Segmentation Target Markets

Groups of people with similar wants and needs who can be expected to show interest in the same products

Market Segmentation
Dividing a market into categories of customer types or segments
Geographic Demographic Psychographic
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TABLE 11.1 Demographic Variables

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Understanding Consumer Behavior

Influences on Consumer Behavior
Psychological influences Personal influences Social influences Cultural influences

Brand Loyalty
Consumers who regularly purchase products because they are satisfied with their performance

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FIGURE 11.1 The Consumer Buying Process

Problem\Need Recognition Information Seeking Evaluation of Alternatives

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Organizational Marketing and Buying Behavior Organizational Markets

Industrial Markets
Businesses that buy goods to be converted into other products or that are used up during production

Reseller Markets
Intermediaries, including wholesalers and retailers, that buy and resell finished goods

Government and Institutional Markets

Federal and state governments Nongovernmental organizations

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Organizational Marketing and Buying Behavior (contd) Organizational Buying Behavior

Differences in Buyers
Organizational buyers are professionals who negotiate the buyer-seller agreement (purchase terms)
Specialists in purchasing a line of items Experts about the products purchased

Differences in the Buyer-Seller Relationship

Frequent purchases Enduring long-term relationships Buyers and sellers may work closely Emphasis is on personal selling
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What Is a Product?
Product Defined
A value package that provides a bundle of benefits and features to satisfy the needs and wants of customers

Product Features
Tangible and intangible qualities built into a product

Benefits
The tangible and intangible outcomes associated with acquisition or use of a product
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TABLE 11.2 Categories of Consumer Products

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TABLE 11.3 Industrial Products

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The Product Mix Product Mix

The group of products (consumer, industrial, or both) that a company makes available for sale

Product Line
A group of products that are closely related because they function in a similar manner or are sold to the same customer group who will use them in similar ways

Multiple (or Diversified) Product Lines

Allow a company to grow rapidly and can help to offset the consequences of slow sales in any one product line
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Developing New Products The New Product Development Process

Research and development (R&D)
Departments for exploring new product possibilities

Product mortality rates

Few product ideas (1 in 50) actually reach the market

Speed to market
Responding to customer demand or market changes by introducing new products to the market ahead of competitors

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FIGURE 11.2 Products in the Life Cycle: Stages, Sales, Cost and Profit

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Identifying Products
Branding Products
Branding
A process of using symbols to communicate the qualities of a particular product made by a particular producer
Signals uniform quality and stimulates consumer recall

Brand loyalty
Consumer preference for a particular product

Brand awareness
The brand name that comes first to mind when consumers consider a particular product category
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Identifying Products (contd) Gaining Brand Awareness

Product placement
A promotional tactic for brand exposure in which characters in television, film, music, magazines, or video games use a real product that is visible to viewers

Buzz marketing
A form of word-of-mouth marketing

Viral marketing
Relying on word-of-mouth and the Internet to spread information like a virus from person-to-person about products and ideas

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Identifying Products (contd) Types of Brand Names

National brands
Products that are produced by, widely distributed by, and carry the name of the manufacturer

Licensed brands
Companies (and even personalities) license (sell the rights to) other companies to put their names on products

Private (or private label) brands

Carry the brand name that a wholesaler or retailer develops and has a manufacturer put it on a product
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Identifying Products (contd)

Packaging Products
Purposes of packaging
Reduce the risk of damage, breakage, or spoilage Increase the difficulty of stealing small products

Serves as an in-store advertisement that makes the product attractive

Displays the brand name Identifies features and benefits Enhances the utility of the product features and benefits
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The International Marketing Mix International Products

Need to adapt product to foreign markets

International Pricing
Higher transportation and selling costs abroad

International Distribution
Distribution network access in foreign markets

International Promotion
Cultural sensitivity requires adjustments to the marketing mix
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Small Business and the Marketing Mix Small-Business Products

Product failures due to lack of market potential for products or marketing to the wrong target market segments

Small-Business Pricing
Losses due to pricing errors resulting from underestimating operating expenses

Small-Business Distribution
Poor location choice fails to attract customers

Small-Business Promotion
Careful promotion can reduce expenses
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Key Terms
brand awareness brand competition brand loyalty branding capital item consumer behavior consumer goods convenience good/convenience service demographic variables distribution emotional motives expense item geographic variables industrial goods industrial market institutional market international competition licensed brand market segmentation marketing marketing manager marketing mix marketing plan national brand packaging private brand (or private label) product

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Key Terms (contd)

product differentiation product feature product life cycle (PLC) product line product mix product placement psychographic variables rational motives relationship marketing reseller market services shopping good/shopping service specialty good/specialty service speed to market substitute product target market utility value value package viral marketing

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