1. Marketing Strategy & Consumer Behavior
Unit 4

2. Planning a Marketing Strategy
A plan that identifies how a company expects to achieve its goals is known as a strategy.
Provides the clearest indication of whether it understand the marketing concept
The company will begin its planning by identifying potential customers and studying their needs.
When the business understands the marketing concept, they recognize that the needs of customers may differ amoung various consumer groups. It also realizes that customer needs can change over time.

3. The Marketing Concept…
The company will attempt to develop products and services that respond to customer needs rather than what the company thinks should be offered.
Marketing and product planning will occur at the same time, involving many people in all parts of the company
Marketing will be directed at meeting the identified needs of the customers rather than developing ways to persuade people to buy something they may not need

4. Identifying Customer Needs
Meeting customer needs are not easy:
Customers are not sure of their needs or have conflicting needs
Customers typically have limited amounts of money available
The needs of individuals and groups can be quite different
Compare your feelings about specific products or services with those of your friends or family. You will find that there are often differences of opinion

5. Satisfying Customer Needs
Through marketing research, the business gathers and analyzes consumer information.
It categorizes customers according to characteristics, needs, and purchasing behavior
A group of similar consumers within a larger market is known as a market segment
After identifying distinct market segments, the business analyzes each one.
It tries to determine which market segments can be served most effectively and which have the strongest needs, the most resources, and the least competition.
It tries to identify other characteristics that can provide the business with opportunities for success.

6. Market Segmentation
Once segments have been identified & prioritized, the business selects which ones it will focus its efforts.
Those segments become the target market
A Target Market is a clearly segment of the market to which a business want to appeal.
The business can then use the information it has collected from the research to make production and marketing decisions specifically focused on that target market

8. 4 Factors that Define Target Markets
Geographic: describes a population in terms of where people live
Demographics: describes a population in terms of personal characteristics
Psychographics: describes a population based on social and psychological characteristics
Behavioral: based on the way customers use, need, or want a product
Geographic: local, regions, state, country, or area
Psychographics: involves peoples’ attitudes, what they value, and their lifestyles. Consumer lifestyles involve how people spend their time and money.
Personality and Values: One may have a very outgoing personality, traditional family values, patriotic values.
Behavioral: examples: a shampoo manufacturer may segment the market according to people with different types of hair (oily, dry, or normal), people who have dandruff or people who wash their hair frequently.
Some desire luxury and premium merchandise to a point where they define themselves through the products and brands they buy
Demographics: age, ethnic background, family structure and gender, income, occupation, marital status, education

9. Developing Psychographics
Values, Attitude, and Lifestyle (VALS)
Gives you an idea of the inert nature of the consumer
Different for different people
If you know what your consumer is thinking, you would know what kind of promotions or communications will attract him/her
How does VALS affect a marketer? If you were a banker, what would you sell someone who had a high income lifestyle? Probably investment options. If your lifestyle was that of a low income customer, you will most likely be targeted for savings.

10. The VALS Framework Resources Primary Motivation
Income, education, intelligence, emotional support
Primary Motivation
What actually drives the in.
Is it knowledge, the desire to achieve something, or to be social
After researching ~1500 consumers, Arnold Mitchell divided consumers into different types based on the amount of resources they had as well as their capacity for primary motivation:
Innovators –  The class of consumer at the top of the vals framework.  They are characterized by High income and high resource individuals for whom independence is very important. They have their own individual taste in things and are motivated in achieving the finer things in life.
Thinkers –  A well educated professional is an excellent example of Thinkers in the vals framework. These are the people who have high resources and are motivated by their knowledge. These are the rational decision making consumers and are well informed about their surroundings. These consumers are likely to accept any social change because of their knowledge level.
Believers –  The subtle difference between thinkers and believers is that thinkers make their own decisions whereas believers are more social in nature and hence also believe other consumers. They are characterized by lower resources and are less likely to accept innovation on their own. They are the best class of word of mouth consumers.
Achievers –  The achievers are mainly motivated by –  guess what –  Achievements. These individuals want to excel at their job as well in their family. Thus they are more likely to purchase a brand which has shown its success over time. The achievers are said to be high resource consumers but at the same time, if any brand is rising, they are more likely to adopt that brand faster.
Strivers –  Low resource consumer group which wants to reach some achievement are known as strivers. These customers do not have the resources to be an achiever. But as they have values similar to an achiever, they fall under the striver category. If a striver can gain the necessary resources such as a high income or social status then he can move on to becoming an achiever.
Experiencers –  The group of consumers who have high resources but also need a mode of self expression are known as Experiencers. Mostly characterized by young adults, it consists of people who want to experience being different. This class of consumers is filled up with early adopters who spend heavily on food, clothing and other youthful products and services.
Makers –  These are consumers who also want self expression but they are limited by the number of resources they have. Thus they would be more focused towards building a better family rather than going out and actually spending higher amount of money. Making themselves into better individuals and families becomes a form of self expression for the Makers.
Survivors –  The class of consumers in the Vals framework with the least resources and therefore the least likely to adopt any innovation. As they are not likely to change their course of action regularly, they form into brand loyal customers. An example can include old age pension earners living alone for whom the basic necessities are important and they are least likely to concentrate on anything else.

11. Personality Tests VALS: Myers-Briggs Type Indicator
Myers-Briggs Type Indicator
Introversion (I) or Extraversion (E)
Intuition (N) or Sensing (S)
Thinking (T) or Feeling (F)
Judging (J) or Perceiving (P)

12. Assignment Take the Myers-Briggs Assessment In a GoogleDocs:
Figure out your profile
In a GoogleDocs:
List your percentages
Explain the following sections in at least 100 words each.
Basic explanation of the personality
Strengths and weaknesses
Friendships
Career paths
Workplace habits
Conclusion (Does this apply to you? Why or why not?)

13. Follow a Product—Target Market Profile

15. Incorporating the Marketing Mix
By combining the planning of product, place, pricing, and promotion, the company has the best opportunity to develop a satisfying, competitive, and profitable mix
The results of one decision affect others. For example, if an improvement is made to a product, then the company might need to increase the price.

16. Planning and the Marketing Mix
Develop Products
Distribution Decisions
Special features or accessories
Offering services before or after the sale
The use of the product
Additional benefits
Manufacturers must rely on wholesalers and retailers
Order processing, product handling, transportation, and inventory control
Parts of the product decision that can improve customer satisfaction include:
Special features such as a unique design, construction, size, color, or operation
Services can be related to the purchase, delivery, installation, or maintenance of the product. Guarantees and warranties should be considered as a part of some products because they make customers more confident in their purchase
Often products have more than one use. Packaging is needed not only to protect the product but also to provide customers with information about how to use the product
Additional benefits associated with the product will go beyond the straightforward use of the product. For example, a push mower not only keeps a consumer’s lawn manicured but it also provides the consumer with exercise. A lip gloss may provide the consumer with colorful lips but it can also protect the lips from becoming chapped.
Distribution deals with making the product available where and when the customer wants it.
Examples of distribution problems: products that are damaged during shipment, poorly packaged, or assembled incorrectly.
All of these activities much be completed efficiently in order for companies to get the product to the customer. If one company fails, the entire marketing effort may fail.

17. Planning and the Marketing Mix
Price Products & Services
Plan Promotion
Most difficult
Supply and demand
Set objectives
How is price presented to customers?
Advertising
Personal selling
Sales promotion
Visual display
Publicity
Choices based on objectives and audience
It is almost impossible to set the price of a specific product in a specific business using ONLY supply and demand. Businesses must debelop specific procedures to set prices that are competitive yet allow the business to make a profit
Set objectives: is the goal to increase the sales volume of a particular product or to make the most profit possible on each sale?
the price must be acceptable to customer, but it must cover all costs and allow for a reasonable profit.
How is price presented: normally, retailers use a price tag or sticker. Manufacturers may communicate price through catalogs or price lists or by sales representatives
Businesses commonly offer discounts from their list prices to some or all of their customers. Prices can also be changed by markdowns, allowances, trade-ins, and coupons.
Promotion communicates the value and benefits of a product or service to help consumers make decisions
Advertising and other promotional methods are powerful tools if used right; however, they can easily be misused and can have no impact or even a negative effect on consumers.
Promotion cannot do a great deal to help a company that has a poor product, excessively high prices, or ineffective distribution

19. The Stages of a Decision1
Need Recognition 2
Search for Information 3
Evaluation of Alternatives 4
Purchase Decision 5
Assess Satisfaction
A decision is a choice among alternatives. Decisions are made to satisfy a need or solve a problem. Without choices, there would be no need for a decision.
Researchers agree that people follow a series of decision-making steps when making a commitment to purchase

20. The Stages of a Decision
Stage 1—Recognize
Consumer recognizes that a need exists
Stage 2—Search
The consumer becomes interested in finding a solution
Leads to identifying products/services that relate to the need and sources of information that can help the consumer make an effective decision
If the need is urgent, the process may occur quickly; if not, the consumer may take time before making a decision

21. The Stages of a Decision
Stage 3—Evaluate
Consumer gathers information and determines if any one choice seems to be better, more available, or more affordable than other choices
Stage 4—Decide
Consumer is comfortable with the evaluation, a decision is made
The decision will be to select one of the available choices, gather more information, or do nothing
Some consumers sped very little time and use a small amount of information to evaluate choices. Some consumers are careful and objective in making decision while others are less rational.

22. The Stages of a Decision
Stage 5—Assess
Was the choice correct?
Is the need satisfied?
If the specific product satisfied the need, then the decision will likely be repeated

24. Consumer Behavior
The study of consumers and how they make decisions is called consumer behavior
Includes factors that influence how people purchase and use products and services
Two types of consumers:
Final
Business

25. Types of Consumers Buy products or services for personal use
Final Consumers
Business Consumers
Buy products or services for personal use
Traditional view of a consumer
Buy goods and services to resell or for use in producing and marketing other goods or services
Goods for daily operations
Traditional view of a consumer….someone who enters a retail store, purchases a product, takes it home, and uses it.
Examples: buying a notebook for class from a local store; family members taking a trip to a regional shopping center; a homeowner contracting with a landscaping service to provide monthly lawn maintenance; a photography buff searching the internet for a new camera lens
Example of Business Consumers: the manufacturer of the notebook you purchased.
The manufacturer buys paper, glue, ink, wire, and other materials to produce the notebook
Company purchases paper, pencils, security services, cleaning services, computers, furniture, and all items needed for business operations.

26. Products Sold to Both Types of Consumers
Name at least one business consumer use and one final consumer use for each of the following items:
Pencils
Balloons
Rubber bands
Radio
Sofa
All-terrain vehicle
Bagels
Pesticide
Suitcase
Blankets

27. Consumer’s Wants and Needs
A need is anything that you require to live
The root of all human behavior
Rise from a lack of something in the consumer
A want is a culturally defined way to fulfill that need
Hungry? You need food, but you want a pizza
Thirsty? You need to drink, but you want a soda
Need: when you are hungry, you need food; thirsty, you need something to drink; lonely, you need companionship
If you live in a different country (China, Brazil, India) your wants will be different from those you would have in the United States.
Often, the product and services people purchase to satisfy wants are not essential for living, but are important for maintaining a lifestyle

28. Hierarchy of Needs
Maslow’s hierarchy of needs illustrates the progression people follow in satisfying needs
Maslow, a psychologist, identified five areas of needs that people have.
Maslow believed that these groups of needs are satisfied in a hierarchy and that other needs become important as a person satisfies the needs at each level.
Everyone must satisfy physiological needs. You must eat, sleep, and breathe to exist. After these needs are generally satisfied, you can start to satisfy security/safety needs. While it is important to be safe, it is only important to be safe after you have satisfied your physiological needs.
To go one step further, social needs are certainly important, but only after you meet physiological and safety needs.
Gaining respect and recognition from others satisfies esteem needs. (Running for student council may be an attempt to satisfy esteem needs)
The need for self-actualization usually involves intellectual growth, creativity, and accomplishment (attending college, taking music lessons)

29. Everyone is Different
Marketers must realize that people are at different levels on the needs hierarchy
Some focus on safety needs while others, on esteem needs
Housing is a good example:
The physiological need for housing is served by a home that provides protection from the weather.
The safety need is served by a home that is in a fairly safe neighborhood and has a security system
The social need is may be served for a family with young children if it is in a neighborhood with young families
The esteem need may be served if the house is well maintained and the yard is landscaped
Self-actualization needs may be served when the owner designs or builds the home themselves

31. What Motivates Buyers?
Motivation is the set of positive or negative factors that direct individual behavior
Short-term and long-term motivation
Motivation is a major factor in your behavior as a consumer.
Buying motives: the reasons that you buy.
Three categories:
Hedonic motives, rational motives, and patronage motives
When you wake up in the morning, you may be motivated to stay in bed for another hour of sleep, but you also recognize that you should get out of bed and prepare for school. Motivation for that choice may be to socialize with friends, not miss the bus, etc. Long-term: you have the motivation to complete the courses needed for your high school diploma.

32. Hedonic Motives Reasons to purchase based on feelings and emotions
Consumers wish to seek pleasure and avoid pain
Forces of love, affection, passion, and happiness bring consumers pleasure
Consumers want to avoid emotions such as guilt, fear, or anxiety
Such emotions often compel consumers to acquire products that will help attain or avoid these emotions
Marketers will use these emotions to help with the 4Ps of their product

33. Rational Motives Reasons to buy based on facts or logic
Saving time or money
obtaining the highest quality or greatest value
These motives are especially important for many expensive purchases
How do you decide to buy a new computer?
An automobile?
Although your current computer may still work, you may want a more powerful and faster operating system, upgraded sound or graphics cards, a larger monitor with touchscreen capability, or the latest software and Internet security.

34. Patronage Motives Based on loyalty
Encourage customers to purchase from a particular business or to buy a particular brand
Loyalty is influenced by positive previous experiences or a close identification with the product or business
Businesses encourage and cultivate patronage motives so that customers are less likely to consider their competitors
Customers develop that loyalty for various reasons. They might like the low prices, high quality, friendly staff, great customer service, or convenient location
They may be loyal because it is a business or brand name their family has used for years and years.
People are often loyal to a local or neighborhood business