business 7 e copyright 2004 prentice hall, inc.1 part 3 understanding principles of marketing

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Copyright 2004 Prentice Hal l, Inc. 1 BUSINESS 7e PART 3 UNDERSTANDING PRINCIPLES OF MARKETING

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Copyright 2004 Prentice Hall, Inc.1 BU

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7ePART 3

UNDERSTANDING PRINCIPLES OF

MARKETING

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7eCHAPTER 10

Understanding Marketing Processesand ConsumerBehavior

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Chapter Outline

What Is Marketing? Target Marketing and Market Segmentation Marketing Research Understanding Consumer Behavior Organizational Marketing and Buying

Behavior International Marketing Mix Small Business and the Marketing Mix

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7eWhat 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 objectives

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Marketing: Providing Value and Satisfaction

Value and Benefits Value is the relative comparison of

a products benefits versus its costs Benefits include the functions of

the product and the emotional satisfactions associated with owning, experiencing or possessing it

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Marketing: Providing Value and Satisfaction

Value and Utility Utility is the ability of a product to satisfy

a human want or need. Four kinds: Time Utility Place Utility Ownership Utility Form Utility

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Marketing: Goods, Services and Ideas

Consumer goods are products purchased by consumers for personal use

Industrial goods are products used by companies to produce other products

Services are intangible products that can be purchased

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What Is Relationship Marketing?Marketing strategy that emphasizes lasting relationships with customers and suppliers

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The Marketing Environment

External environment is the outside factors that influence marketing programs by posing opportunities and threats. Five environmental factors:

Political–Legal Environment Social–Cultural Environment Technological Environment Economic Environment Competitive Environments

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The External Marketing Environment

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Competitive Environment

Substitute products differ from those of competitors but can fill the same need

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Competitive Environment

Brand competition occurs between similar products

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Competitive Environment

International competition matches domestic products against foreign products

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Who Are Marketing Managers?Manager who plans and

implements the marketing activities that result in the

transfer of products or services from producer to

consumer

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What Is a Marketing Plan?

Detailed strategy for focusing marketing efforts on consumer needs and wants

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What Is the Marketing Mix (or the “Four P’s”)?

Combination of product, pricing, promotion and distribution (place) strategies used to market products

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What Is a Product?

A product is a good, service or idea designed to fill a consumer need or want.

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What Is a Product?

Product differentiation is the creation of a product feature or product image that differs enough from competing products to attract consumers

How do they differentiate themselves?

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What Is Pricing?

Pricing is selecting the best price at which to sell a product. Prices must support a variety of costs Prices must be competitive

Low- and high-price strategies can be effective in different situations

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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 options Decisions about channels

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What Is Promotion?

Promotion is the techniques for communicating information about products. Four promotional tools: Advertising Personal Selling Sales Promotions Public Relations

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What Is Target Marketing and Market Segmentation?

Target markets are groups of people with similar wants and needs

Market segmentation is the process of dividing a market into categories of customer types

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Identifying Market Segments

Geographic variables are geographical units

Demographic variables are characteristics of populations

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Demographic Variables

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Identifying Market Segments

Psychographic variables are consumer characteristics such as lifestyles, opinions, interests and attitudes

Behavioral variables are consumer characteristics based on the use of a product, benefits sought from it, reasons for its purchase and brand loyalty Toothpaste w/

-Whiteners-Fluoride-etc.

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What Is Marketing Research?

Study of consumer needs and wants and the ways in which sellers can best meet them

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Market Research and the Marketing Process

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The Research Process

. Study the current situation . Select a research method . Collect data

• Secondary data are already available from previous research

• Primary data are developed through new research

. Analyze the data . Prepare a report

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Research Methods

Observation involves watching and recording consumer behavior

Survey uses a questionnaire either mailed to individuals or used as the basis of interviews

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Research Methods

Focus group involves a small gathering of people that are presented with an issue and asked to discuss it in depth

Experimentation compares the responses of the same or similar people under different circumstances

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What Is Data Warehousing and Data Mining?

Data warehousing is the process of collecting, storing and retrieving data in electronic files

Data mining is the application of electronic technologies for searching, sifting and reorganizing data to uncover useful marketing information and target products in the marketplace

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What Is Consumer Behavior?

Study of the decision process by which people buy and consumer products

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Influences on Consumer Behavior

Psychological influences: individual’s motivations, perceptions and attitudes

Personal influences: lifestyle, personality and economic status

Social influences: family, opinion leaders and reference groups

Cultural influences: culture, subculture and social class

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7eWhat Is Brand Loyalty?

Pattern of regular consumer purchasing based on satisfaction with a product

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Consumer Buying Behavior

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The Consumer Buying Process

Problem/Need Recognition Consumer recognizes a problem or need

Information Seeking Consumer often seeks information

Evaluation of Alternatives Consumer compares products by analyzing product attributes

Purchase Decision Consumer makes “buy” decision based on rational and/or emotional motives

Postpurchase Evaluations Consumer repurchases products based on levels of satisfaction

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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 markets

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Organizational Markets

Industrial market includes businesses that buy goods to be converted into other products or used during production

Reseller market consists of intermediaries that buy and resell finished goods

Government and institutional market consists of nongovernmental buyers of goods and services

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Organizational vs. Consumer Buying Behaviors

Differences in Buyers:Organizational buyers are professional, specialized and expert

Differences in the Buyer-Seller Relationship:Organizational buying involves frequent and enduring buyer-seller relationships

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The International Marketing Mix

International Products Some products can be soldabroad with few changes

International PricingMarketers must consider the higher costs of transporting and selling products abroad

International DistributionDelays in starting new distribution networks can be costly

International PromotionA good ad campaign is a good campaign just about everywhere

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Small Business and the Marketing Mix

Small-Business Products Small firms should understand consumer wants before creating new products or services

Small-Business Pricing Small firms should set prices by assessing costs

Small-Business Distribution Small firms should select a facility location aimed at attracting and retaining customers

Small-Business Promotion Small firms should plan promotional expenses as part of start-up costs