Consumer Behaviour Notes

26 Pages
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Department
Management and Organizational Studies
Course Code
Management and Organizational Studies 1021A/B
Professor
James O' Brien

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Description
CHAPTERONE MARKETING FUNDAMENTALS The Essence of Marketing - Successful marketing programs focus on consumer needs and try to develop programs that delight the consumer and encourage customer loyalty. - Challenge: clearly determine needs and understand how to meet them with marketing approaches o Consumers do not always know what they want o Unable to articulate feelings o Unable to communicate and rationalize their preferred choices - Research can be difficult: o Requires insight o Results are not clear o Risks o Certain target groups that are difficult to find or unable to express their thoughts - Creating customer value (the unique combination of benefits received by targeted buyers that includes quality, price, convenience, on-time delivery, and both before-sale and after-sale service.): o Pricing strategies o Product design o Service elements - Target market: the specific group of existing and potential consumers to which a marketer targets its marketing efforts. - Marketing mix: o Product: all the attributes that make up a good a service, or an idea. (design, features, colour, packaging, warrantee, service levels) o Price: the expected retail shelf price and sale price. o Place: the distribution channels and retailers required to sell the product. o Promotion: the communication tools needed to inform consumers about the product. (advertising, sales promotion, public relations, direct marketing, personal selling) The Marketing Process Manage the Identify consumer marketing mix to Realizeprofits for the needs meet consumerneeds company - Marketing process: a continuous one that requires marketers to pay attention to detail and apply their strategic, analytical, and creative-thinking skills. o Identifying consumer needs o Managing marketing mix o Realizing profits - Marketing: the process of planning goods, services, or ideas to meet consumer needs and organizational objectives. - Exchange: the trade of things of value between buyers and sellers so that each benefits - Good: a product you can touch and own - Service; a good that is intangible - Idea: a concept that typically looks for your support - Market: used in marketing to describe the potential consumers who have both the willingness and ability to buy a product. The Evolution of Business Philosophies - Production orientation: focused on manufacturing. o Up until the 1930s. o Manufactured goods tended to sell, regardless of their quality, because they were in short supply - Sales orientation: focused on selling as many products as possible o 1930s to 1960s. o Market became more competitive, production became more efficient, products were in abundance. - Marketing orientation: focused on organizational efforts to collect and use information about customers needs to create customer value. o 1960s to 1990s. o Marketing concept: the idea that an organization should strive to satisfy the needs of consumers while also trying to achieve the organizations goals. o Relationship marketing: when organizations create long-term links with customers, employees, suppliers, and other partners to increase loyalty and customer retention. - Customer relationship marketing orientation (CRM): focused in the fact that it is less expensive to service and maintain current customers rather than obtain new ones. o 1990s. o Involves a systematic and active company approach to managing and retaining satisfied customers by efficiently and accurately identifying the elements that lead to satisfied customers and increased company profits. The Progression of Marketing and Evolving Areas - Due to changes in consumer expectations, societal pressures, technological changes, and the philosophy of doing business. - Customer relationship management (CRM): o The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. o Focuses on identifying a firms most-valued customers and building programs to appeal to their needs while fostering long-term customer relationship and loyalty. - Experiential marketing: o Marketers create opportunities for their consumers to interact directly with a brand. o Generates word-of-mouth awareness and free publicity. - Corporate Social Responsibility (CSR): o Organizations voluntarily consider the well-being of society by taking responsibility for how their businesses impact consumers, customers, suppliers, employees, shareholders, communities, the environment, and society in general. o CSR can involve the sponsorship and/or spearheading of community programs. The sponsorship and/or involvement in major fundraising initiatives for charitable organizations. o Society marketing concept: marketers are developing programs that address the well-being of society. o A focus on ethics. CHAPTERTWO MARKETING ENVIRONMENT The Marketing Environment - Marketers scan the marketing environment in six key areas: o Demographic forces o Socio-cultural forces o Economic forces o Technological forces o Competitive forces o Regulatory forces A Marketing Environmental Scan - The process of continually acquiring information on events occurring outside the organization to identify trends, opportunities, and threats to a business. - Demographics: the statistical study of populations. o Looks at characteristics such as age, gender, ethnicity, income, and occupation. o Diverse generations: Baby boomers: 1946-1964 Generation X: 1965-1976 Generation Y (echo boom): 1975-1995 o Big city dwelling o Ethnic diversity o Non-traditional families o World markets - Socio-cultural forces o Cultural values, ideas, and attributes that are learned and shared among a group of people. o Includes societys morals and beliefs. o Ethnic foods o Health and fitness o Environmental awareness o Changing gender roles - Economic forces o Economy: the collective income, expenditures, and resources that affect the cost of running a business or a household. o Macroeconomic forces: the state of a countrys economy as a whole o Inflation: a period when the cost to produce and buy products and services gets higher as prices rise. o Recession a time of slow economic activity with two consecutive periods of negative growth. o Microeconomic forces: the supply and demand of goods and services and how this is impacted by individual, household, and company decisions to purchase. Gross income: the total amount of money made in one year by a person, household, or family unit including taxes. Disposable income: the after-tax income that consumers have left for spending and savings. Discretionary income: the after-tax income a consumer has left after paying for necessities. Income Disposabl e Income Discretion al Income - Technological forces o Inventions or innovations that stem from scientific or engineering research. - Competitive forces o Alternative products that can satisfy a specific markets needs. o Direct competitors: similar products sold in the same category. o Indirect competitors: products competing for the same buying dollar in a slightly different, but related category. o Perfect competition: type of competition where there are many sellers with nearly identical products and little differentiation. o Monopolistic competition: type of competition where a large number of sellers compete with each other, offering customers similar or substitute products. o Oligopoly: type of competition that occurs when a few companies control a market. o Monopoly: when only one company sells in a particular market. Perfect Competition Manyfirms, identicalproducts Ex) apple farmers Monopolistic Manyfirms, similarproducts Competition Ex) blue-jeanmanufacturers Oligopoly Few frims Ex) airlines Monopoly One firm Ex) localcableserviceproviders - Regulatory forces o Regulations: restrictions placed on marketing practices by government and industry associations. The competition Bureau: responsible for administration and enforcement; promote and
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