copyright © 2006 pearson education canada inc. 12-1 chapter 12 understanding marketing processes...

12-1

Copyright © 2006 Pearson Education Canada Inc.

Chapter 12

Understanding Marketing Processes and Consumer Behaviour

12-2 Copyright © 2006 Pearson Education Canada Inc.

Learning Objectives

Explain the concept of marketingExplain the purpose of a marketing plan and identify the four components of the marketing mixExplain market segmentation and show how it is used in target marketingExplain the purpose and value of market research


Learning Objectives

Describe the key factors that influence the consumer buying process.Describe the international and small business marketing mixes.


Marketing

Marketing Planning and executing the development,

pricing, promotion, and distribution of ideas, goods, and services

Value Relative comparison of a product’s benefits

versus its costs

Utility Ability of a product to satisfy a human want

or need


Goods, Services, and Ideas

Consumer goods Products purchased by individuals for their

personal use

Industrial goods Products purchased by companies to use

directly or indirectly to produce other products

Services Intangible products, such as time, expertise,

or an activity that can be purchased


Relationship Marketing

A type of marketing that emphasizes lasting relationships with customers and suppliers Stronger relationships can result in

greater long-term customer satisfaction and client retention


The Marketing Mix

Marketing mix The combination of product, pricing,

promotion, and place (distribution) strategies used in marketing a product Also known as the four P’s of marketing

Marketing plan A detailed strategy for gearing the marketing

mix to meet consumer needs and wants


Choosing the Marketing Mix

++ ==

ProductProduct

PromotionPromotion

PricePrice

PlacePlace

The basicThe basicdesign of design of

the productthe product

How much How much consumer consumer

payspays

Where andWhere andwhen the when the product isproduct is

ProductProductimage andimage andvisibilityvisibility

CustomerCustomerSatisfactionSatisfaction

Business Business

ProfitabilityProfitability


Product Product A good, service, or idea that satisfies the

buyers’ needs and demands

Product differentiation The creation of a product or product image

that differs enough from existing products on the market to attract consumers

Mass customization Providing thousands of customers with

exactly the products they want Dell Computers


Price

Price Choosing the right price to meet the firm’s

profit objectives and buyers’ purchasing objectives

May be low price strategy (salt) or high price strategy (mink coat)

Price must consider all costs operation and administration marketing research advertising


Promotion

Choosing the right method of selling the product to the consumer Promotional tools

Advertising

Personal selling

Sales promotions

Publicity

Public relations


Place (Distribution)

The part of the marketing mix concerned with getting products from producer to buyer Physical transportation Choice of sales outlets


Target Market and Segmentation

Target market A group of potential customers who have

similar wants and needs

Segmentation Dividing a consumer market into

categories Selecting specific market segment(s) to

pursue


Identifying Market Segments• Search for common traits Search for common traits or behaviours that or behaviours that will affect the purchasing decisionwill affect the purchasing decision•Geographic variablesGeographic variables•Country, region, neighbourhoodCountry, region, neighbourhood

•Demographic variablesDemographic variables•Age, income, gender, ethnic background, marital Age, income, gender, ethnic background, marital

•Psychographic variablesPsychographic variables•Psychological traits that a group has in common Psychological traits that a group has in common (motives, attitudes, activities, opinions)(motives, attitudes, activities, opinions)

•Product-use variablesProduct-use variables•How a group member uses a good (athletic, casual)How a group member uses a good (athletic, casual)


Geographic Variables

Area of residence affects product consumption Rainfall and umbrellas Snowfall and snowmobiles or snow

blowers Hot summers and backyard pools


Demographic Variables

AgeAge

IncomeIncome

OccupationsOccupations

EducationEducation

GenderGender

Family SizeFamily Size

Marital StatusMarital Status

EthnicityEthnicity

ReligionReligion LanguageLanguage


Psychographic Variables

Psychological traitsPsychological traits::AttitudesAttitudesInterests and hobbiesInterests and hobbiesOpinionsOpinionsMotivationsMotivationsActivitiesActivities


Behavioural Variables

Occasion for useBenefits soughtReasons for purchasing Loyalty level


Market Research

The systematic study of what buyers need and how best to meet those needs Focuses on the marketing mix

elements Leads to more effective marketing Increases the accuracy and

effectiveness of market segmentation


The Research ProcessStudy theCurrent

Situation

Experim entation

Observation

Survey

Focus Group

Select aResearch

M ethod

UsePrim ary

Data

UseSecondary

Data

Collect Data

M akeRecom mendations

PrepareReport

Analyze Data


Observation

Viewing or monitoring human behaviourUseful for cases where actions occur automatically without thinking Grocery shopping

May be human observation or technological Supermarket scanners


Survey

Administration of a questionnaire, a list of questions, to prospective buyers Relies on a reliable random sample Administered in person, via phone, mail,

or the internet Key issues include choosing appropriate

questions and ensuring honest answers


Focus GroupA small discussion group of prospective customers or product usersAllows in-depth discussion of complex or subjective issues regarding products or servicesUsually a blind research study where participants do not know who the sponsor of the group isResearchers analyze the results by searching for common themes in participants’ feedback


Experimentation

A controlled research design allows the determination of how consumers react to specific situations or appealsThe situations can be manipulated to compare responses to such things as shelf placement of products, package colours and design, advertising strategyVery costly


Consumer Behaviour

The study of the processes by which customers come to purchase and consume a product or serviceInfluenced by Psychological factors Personal factors Social factors Cultural factors


The Consumer Purchase Process

Post-PurchaseEvaluation

PurchaseDecision

Evaluationof

Alternatives

Inform ationSeeking

ProblemRecognition

Marketing FactorsMarketing Factors

ProductProduct

PricePrice

PlacePlace

PromotionPromotion

Purchase ProcessPurchase ProcessPersonal & Personal &

EnvironmentalEnvironmentalFactorsFactors

PsychologicalPsychological

CulturalCultural

SocialSocial

PersonalPersonal


The Consumer Buying Process

Problem/need recognition Consumer becomes aware of a problem or

need May be automatic (the need for food or sleep) Due to a lifestyle change (new parents,

retirement)

Information seeking The information search may be long and

detailed, or short and limited Buying a car versus buying a candy bar


The Consumer Buying Process

Evaluation of Alternatives Products are compared to identify the best

choice

Purchase Decision choice may be made based upon rational or

emotional motivations Rational motives include cost, quality,

usefulness Emotional motives include fear, sociability,

aesthetics, imitation of others


Post-Purchase Evaluation

Marketers must market after the sale to ensure satisfaction & reduce purchase anxietyPurchase anxiety (buyer’s remorse) is fear on the part of purchasers that they have purchased the wrong product (especially crucial for expensive purchases)


International Marketing Mix

Products may require substantial change before they can be marketed to different countriesPricing requires consideration of product manufacturing costs, transportation and deliveryPromotion must accommodate cultural differences and social traditionsDistribution may involve cooperation with other international firms and adherence to foreign packaging and labelling legislation


Small Business Marketing Mix

Care must be taken to: Offer products to markets substantial

enough to support the organization Do a complete analysis of costs prior to

setting prices Develop a comprehensive promotional

program using more than personal selling

Choose a location that will attract and retain customers

copyright © 2006 pearson education canada inc. 12-1 chapter 12 understanding marketing processes...

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