Presentation on theme: "UNDERSTANDING PRINCIPLES OF MARKETING"— Presentation transcript:
1 UNDERSTANDING PRINCIPLES OF MARKETING PART 3UNDERSTANDING PRINCIPLES OF MARKETINGCopyright 2004 Prentice Hall, Inc.
2 Understanding Marketing Processes and Consumer Behavior CHAPTER 10UnderstandingMarketing Processesand ConsumerBehaviorCopyright 2004 Prentice Hall, Inc.
3 Copyright 2004 Prentice Hall, Inc. Chapter OutlineWhat Is Marketing?Target Marketing and Market SegmentationMarketing ResearchUnderstanding Consumer BehaviorOrganizational Marketing and Buying BehaviorInternational Marketing MixSmall Business and the Marketing MixCopyright 2004 Prentice Hall, Inc.
4 What Is Marketing?Process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectivesCopyright 2004 Prentice Hall, Inc.
5 Marketing: Providing Value and Satisfaction Value and BenefitsValue is the relative comparison of a products benefits versus its costsBenefits include the functions of the product and the emotional satisfactions associated with owning, experiencing or possessing itCopyright 2004 Prentice Hall, Inc.
6 Marketing: Providing Value and Satisfaction Value and UtilityUtility is the ability of a product to satisfy a human want or need. Four kinds:Time UtilityPlace UtilityOwnership UtilityForm UtilityCopyright 2004 Prentice Hall, Inc.
7 Marketing: Goods, Services and Ideas Consumer goods are products purchased by consumers for personal useIndustrial goods are products used by companies to produce other productsServices are intangible products that can be purchasedCopyright 2004 Prentice Hall, Inc.
8 What Is Relationship Marketing? Marketing strategy that emphasizes lasting relationships with customers and suppliersCopyright 2004 Prentice Hall, Inc.
9 The Marketing Environment External environment is the outside factors that influence marketing programs by posing opportunities and threats. Five environmental factors:Political–Legal EnvironmentSocial–Cultural EnvironmentTechnological EnvironmentEconomic EnvironmentCompetitive EnvironmentsCopyright 2004 Prentice Hall, Inc.
10 The External Marketing Environment Copyright 2004 Prentice Hall, Inc.
11 Competitive Environment Substitute products differ from those of competitors but can fill the same needCopyright 2004 Prentice Hall, Inc.
12 Competitive Environment Brand competition occurs between similar productsCopyright 2004 Prentice Hall, Inc.
13 Competitive Environment International competition matches domestic products against foreign productsCopyright 2004 Prentice Hall, Inc.
14 Who Are Marketing Managers? Manager who plans and implements the marketing activities that result in the transfer of products or services from producer to consumerCopyright 2004 Prentice Hall, Inc.
15 What Is a Marketing Plan? Detailed strategy for focusing marketing efforts on consumer needs and wantsCopyright 2004 Prentice Hall, Inc.
16 What Is the Marketing Mix (or the “Four P’s”)? Combination of product, pricing, promotion and distribution (place) strategies used to market productsCopyright 2004 Prentice Hall, Inc.
17 Copyright 2004 Prentice Hall, Inc. What Is a Product?A product is a good, service or idea designed to fill a consumer need or want.Copyright 2004 Prentice Hall, Inc.
18 Copyright 2004 Prentice Hall, Inc. What Is a Product?Product differentiation is the creation of a product feature or product image that differs enough from competing products to attract consumersHow do they differentiate themselves?Copyright 2004 Prentice Hall, Inc.
19 Copyright 2004 Prentice Hall, Inc. What Is Pricing?Pricing is selecting the best price at which to sell a product.Prices must support a variety of costsPrices must be competitiveLow- and high-price strategies can be effective in different situationsCopyright 2004 Prentice Hall, Inc.
20 What Is Distribution (Place)? Distribution is part of the marketing mix concerned with getting products from producers to consumers.Decisions about warehousing, inventory control and transportation optionsDecisions about channelsCopyright 2004 Prentice Hall, Inc.
21 Copyright 2004 Prentice Hall, Inc. What Is Promotion?Promotion is the techniques for communicating information about products. Four promotional tools:AdvertisingPersonal SellingSales PromotionsPublic RelationsCopyright 2004 Prentice Hall, Inc.
22 What Is Target Marketing and Market Segmentation? Target markets are groups of people with similar wants and needsMarket segmentation is the process of dividing a market into categories of customer typesCopyright 2004 Prentice Hall, Inc.
23 Identifying Market Segments Geographic variables are geographical unitsDemographic variables are characteristics of populationsCopyright 2004 Prentice Hall, Inc.
24 Demographic Variables Copyright 2004 Prentice Hall, Inc.
25 Identifying Market Segments Psychographic variables are consumer characteristics such as lifestyles, opinions, interests and attitudesBehavioral variables are consumer characteristics based on the use of a product, benefits sought from it, reasons for its purchase and brand loyaltyToothpaste w/ -Whiteners -Fluoride -etc.Copyright 2004 Prentice Hall, Inc.
26 What Is Marketing Research? Study of consumer needs and wants and the ways in which sellers can best meet themCopyright 2004 Prentice Hall, Inc.
27 Market Research and the Marketing Process Copyright 2004 Prentice Hall, Inc.
28 Copyright 2004 Prentice Hall, Inc. The Research Process. Study the current situation. Select a research method. Collect dataSecondary data are already available from previous researchPrimary data are developed through new research. Analyze the data. Prepare a reportCopyright 2004 Prentice Hall, Inc.
29 Copyright 2004 Prentice Hall, Inc. Research MethodsObservation involves watching and recording consumer behaviorSurvey uses a questionnaire either mailed to individuals or used as the basis of interviewsCopyright 2004 Prentice Hall, Inc.
30 Copyright 2004 Prentice Hall, Inc. Research MethodsFocus group involves a small gathering of people that are presented with an issue and asked to discuss it in depthExperimentation compares the responses of the same or similar people under different circumstancesCopyright 2004 Prentice Hall, Inc.
31 What Is Data Warehousing and Data Mining? Data warehousing is the process of collecting, storing and retrieving data in electronic filesData mining is the application of electronic technologies for searching, sifting and reorganizing data to uncover useful marketing information and target products in the marketplaceCopyright 2004 Prentice Hall, Inc.
32 What Is Consumer Behavior? Study of the decision process by which people buy and consumer productsCopyright 2004 Prentice Hall, Inc.
33 Influences on Consumer Behavior Psychological influences: individual’s motivations, perceptions and attitudesPersonal influences: lifestyle, personality and economic statusSocial influences: family, opinion leaders and reference groupsCultural influences: culture, subculture and social classCopyright 2004 Prentice Hall, Inc.
34 What Is Brand Loyalty?Pattern of regular consumer purchasing based on satisfaction with a productCopyright 2004 Prentice Hall, Inc.
35 Consumer Buying Behavior Copyright 2004 Prentice Hall, Inc.
36 The Consumer Buying Process Problem/Need Recognition Consumer recognizes a problem or needInformation Seeking Consumer often seeks informationEvaluation of Alternatives Consumer compares products by analyzing product attributesPurchase Decision Consumer makes “buy” decision based on rational and/or emotional motivesPostpurchase Evaluations Consumer repurchases products based on levels of satisfactionCopyright 2004 Prentice Hall, Inc.
37 What Is Organizational Marketing and Buying Behavior? Organizational marketing deals with buyers from organizational (or commercial) markets and with buying behaviors distinct from those found in consumer marketsCopyright 2004 Prentice Hall, Inc.
38 Organizational Markets Industrial market includes businesses that buy goods to be converted into other products or used during productionReseller market consists of intermediaries that buy and resell finished goodsGovernment and institutional market consists of nongovernmental buyers of goods and servicesCopyright 2004 Prentice Hall, Inc.
39 Organizational vs. Consumer Buying Behaviors Differences in Buyers: Organizational buyers are professional, specialized and expertDifferences in the Buyer-Seller Relationship: Organizational buying involves frequent and enduring buyer-seller relationshipsCopyright 2004 Prentice Hall, Inc.
40 The International Marketing Mix International Products Some products can be sold abroad with few changesInternational Pricing Marketers must consider the higher costs of transporting and selling products abroadInternational Distribution Delays in starting new distribution networks can be costlyInternational Promotion A good ad campaign is a good campaign just about everywhereCopyright 2004 Prentice Hall, Inc.
41 Small Business and the Marketing Mix Small-Business Products Small firms should understand consumer wants before creating new products or servicesSmall-Business Pricing Small firms should set prices by assessing costsSmall-Business Distribution Small firms should select a facility location aimed at attracting and retaining customersSmall-Business Promotion Small firms should plan promotional expenses as part of start-up costsCopyright 2004 Prentice Hall, Inc.