Daily Motivational Video Your tattoo was $ How much should you tip? How much should you tip the artist?

Vocabulary Words Economic market Benefits derived Comparative advantage Emotional purchases Rational purchases Patronage purchases

Understand Buyer Behavior The ECONOMIC MARKET includes all of the consumers who will purchase a product or service. Two major goals of marketing are to determine: – What consumers want – How much are they willing to pay To achieve these goals marketers must understand the actions of consumers, including their spending habits and buying motives.

Consumer Spending Habits The price fans are willing to pay for a ticket depends upon their degree of interest, which may be influenced by the national importance of the event, the popularity of athletes or celebrities, and the rivarly.

Consumer Spending Habits The price fans are willing to pay is also related to their perception of the benefits derived. BENEFITS DERIVED  the value people believe they receive from a product or service. – Enjoyment of watching a good game Regular season NFL tickets  $150 - $300 Super Bowl tickets  $900 - $2,600 – Feeling of pride from wearing a sweatshirt with a team logo

Consumer Spending Habits Organizations must determine where they have a comparative advantage. COMPARATIVE ADVANTAGE  the capability to produce products or services more efficiently and economically than the competition.

Comparative Advantage Example

Consumer Wants and Needs A psychologist by the name of Abraham Maslow had a theory related to human needs. Hierarchy of Needs – Identifies the 5 human areas of needs. Signifies that our basic needs must be satisfied first and then the focus will progress to higher-level needs.

Maslow’s Hierarchy of Needs

Buying Motives Marketing research is conducted to determine why customers spend money on goods and services. EMOTIONAL PURCHASES  when consumers spend money with little thought during emotional highs or lows. – Attending a concert for your favorite musician and paying $$$. – Winning streaks and national championships

Buying Motives RATIONAL PURCHASES  take place when individuals recognized needs and wants, assess their priorities and budget, conduct research, compare alternatives, and make purchases based upon careful thought and sound reasoning.

Buying Motives PATRONAGE PURCHASES  based on loyalty to a particular brand or product. – Golfers may purchase Nike products due to the endorsements by Tiger Woods. – Mr. Nall only wears Nike, because of his loyalty to the brand.

Marketing Myth Nike, Inc. is the world’s largest marketer of footwear, apparel, and accessories for sports and fitness activities. Nike traditionally has sold only in sporting goods stores or high-end department stores. Nike believed that its brand would become devalued if sold in discount stores. As an international corporation, Nike has come to realize that its customers have diverse needs, including lower-cost athletic shoes. Nike created its Exeter Brands Group LLC subsidiary to address this need. Exeter Brands includes the Starter brand name. Customers can now buy Starter gym shoes at Wal-Mart. The working class image of the Starter brand fits well with Wal- Mart and has become one of its top-selling sneaker brands. Nike’s new venture served the need to diversify in an extremely competitive industry.

Marketing Myth Who are Nike’s major competitors? How has Nike achieved its high level of success?

Nike’s Success marketing marketing current-biggest-athlete-endorsement-deals/ current-biggest-athlete-endorsement-deals/

Gathering Information Most consumers use the decision-making process to decide how to spend their money. – Recognize a need or want and an opportunity to satisfy it. – Conduct research for more information on a product or service. – Collect information on alternatives. – Evaluate choices and purchase. – Post-purchase evaluation and assessment.

Information Needed for Marketing Decisions Marketing decisions are based upon consumers and the business environment. Important factors to consider about consumers included demographics and shopping behaviors. Market research looks at how consumers spend money, including product and brand preferences and the frequency with which products are purchased.

Decisions, Decisions, Decisions Products must be offered…. – with features that meet consumers’ needs and wants. – at an available price customers are willing to pay. – that entice customers to make a purchase that includes solid product guarantees, special discounts, and a variety of credit choices. – at a location that salespeople influence consumer purchases. – that include promotional methods that reach the intended consumer.

Sources of Information for Business Internal Sources – Customer records – Sales records – Production records – Operative records External Sources – Government reports – Trade and professional organizations – Business publications – Commercial data – Informational services

Sources of Information for Businesses Organizations often conduct research to learn more about consumer behavior. The data collected may be categorized as either primary or secondary data.

Primary Data Primary data is obtained for the first time and specifically for the particular problem or issue being studied. – Consumer surveys – Observing consumer behavior – Samples and simulations

Secondary Data Secondary data has already been collected for some other purpose but is now useful in the current study. – Government statistics about population – Competitors – Media – Trade Publications

Activity Draw the five levels for Maslow’s hierarchy of needs. Briefly define each level in your own terms. Describe how the levels of needs could be met at a sports and entertainment event.