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Marketing and Consumer Behavior © 2014 Pearson Education, Inc. 12-1 chapter 12 Better Business 3rd Edition Solomon (Contributing Editor) · Poatsy · Martin.

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Presentation on theme: "Marketing and Consumer Behavior © 2014 Pearson Education, Inc. 12-1 chapter 12 Better Business 3rd Edition Solomon (Contributing Editor) · Poatsy · Martin."— Presentation transcript:

1 Marketing and Consumer Behavior © 2014 Pearson Education, Inc chapter 12 Better Business 3rd Edition Solomon (Contributing Editor) · Poatsy · Martin

2 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

3 Marketing: A better definition Process 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 © 2014 Pearson Education, Inc.3 Facilitate Exchanges (Encourage Purchase) Satisfy Customer Needs Product PricingPromotionPlace IdeasServicesGoods 2 Important Functions

4 Marketing Fundamentals © 2014 Pearson Education, Inc. 12-4

5 The Evolution of Marketing © 2014 Pearson Education, Inc.12-5

6 Production Era & Sales Concept Era Production 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 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 © 2014 Pearson Education, Inc. 12-6

7 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 © 2014 Pearson Education, Inc. 12-7

8 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 © 2014 Pearson Education, Inc. 12-8

9 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 © 2014 Pearson Education, Inc.12-9 Good CRM incorporates technologies and information that allows businesses to develop marketing strategies to sustain long-term customer relationships

10 Nontraditional Marketing © 2014 Pearson Education, Inc

11 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 © 2014 Pearson Education, Inc

12 Marketing Provides Utility: Utility is the ability of a product to satisfy consumer needs © 2014 Pearson Education, Inc.12 Form Utility Utility created by converting production inputs into finished products (ex. BMW car, Apple iPhone) Time Utility Utility created by making a product available when customers wish to purchase it (ex. fast food after midnight, Christmas trees after Thanksgiving) Place Utility 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 Utility Utility 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.

13 Criticisms of Marketing Misuse of personal information Hidden fees Consequences of purchase © 2014 Pearson Education, Inc

14 Markets and Their Classifications © 2014 Pearson Education, Inc. 14  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 Markets 1) 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

15 Differences Between B2B & Consumer Markets © 2014 Pearson Education, Inc.12-15

16 Marketing Strategy: A formal plan that will enable an organization to make the best use of its resources and advantages to meet its objectives © 2014 Pearson Education, Inc 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

17 The 5 Cs of Marketing © 2014 Pearson Education, Inc

18 Finding A Target Market © 2014 Pearson Education, Inc. 18  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

19 A Well Chosen Target Market © 2014 Pearson Education, Inc. 19  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

20 Common Bases for Segmentation © 2014 Pearson Education, Inc

21 The Marketing Mix: The 4 Ps © 2012 Pearson Education, Inc Product differentiation Brand Product Cover costs Competitively priced Price Inform and persuade customers to buy Build positive customer relationships Promotion Distribution channel Distributors and wholesalers Place 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

22 The 4 Cs © 2014 Pearson Education, Inc

23 The Marketing Process © 2014 Pearson Education, Inc.12-23

24 The Marketing Environment © 2014 Pearson Education, Inc 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

25 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 © 2014 Pearson Education, Inc Understanding customers is critical Why do people buy one product but not another? How do they use the products they buy?

26 Understanding Today’s Customers © 2014 Pearson Education, Inc.26  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.

27 Marketing Research & Planning: So What Do They REALLY Think? © 2014 Pearson Education, Inc 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

28 Primary & Secondary Sources of Data © 2014 Pearson Education, Inc.12-28

29 The Consumer Decision-Making Process © 2014 Pearson Education, Inc Need recognition Information search Evaluation of alternatives Purchase or no purchase decision Postpurchase evaluation

30 What Influences Consumer Decision Making? © 2014 Pearson Education, Inc.12-30

31 © 2014 Pearson Education, Inc


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