RSM100Y1 Chapter 15: CHAPTER 15-Understanding Marketing Processes and Consumer Behaviour
CHAPTER
15:
UNDERSTANDING MARKETING PROCESSES
AND
CONSUMER BEHAVIOUR
What is Marketing?
-
marketing
is more than
advertising.
It is the process of
planning
and
executing
the conception, pricing,
promotion and
distribution
of
ideas,
goods and
services
to create
exchanges
that
satisfy
EX\HUV¶ and
seller
¶
s
goals => the goals of the
individual
and the organization
-
All consumers
buy goods and
services
so we are
influenced
by the
marketing activities
of
companies
that
want us to buy their products
www.notesolution.com
-
Consumers
are the
essential ingredients
in the
marketing
process
-
Consumers express
needs for the
essentials like
food and
shelter,
and we
express
wants for
nonessentials
like entertainment
and leisure
-
Needs
+ wants = forces that
drive marketing
industry
-
Marketing
concept = the idea that the whole firm is directed toward
serving
present and potential
customers in order to
achieve
a profit => the goal of the firm
- To
achieve
the goal, the firm must get to know the customers, what they want and their
changes
in tastes/
-
All
the departments of a firm -
marketing,
accounting,
finance, operations
and
human resources
- must
operate as a system that is
unified
in the pursuit of the firm¶s goal of customer satisfaction
-
Marketing
focuses of
providing value
and
utility
for consumers
Providing Value
and Satisfaction
- the things that
limits
us
(consumers)
the most in
buying goods/services
are the
financial resources
available
-
Consumers
buy products that offer the best
value
when it comes to
meeting
their needs and wants
VALUE
AND BENEFITS:
-
value
= the comparison of a product¶s
benefits versus
its costs
-
Benefits include
the
functions
of the products and the
emotional satisfactions associated
with owning,
experiencing
or
possessing
it
- Costs
include
the
sale
price, the
expenditure
of the buyer¶s time, the
emotional
costs of making a purchase
decision
-
Value
=
benefits
/ costs
-
Marketing strategies
focus on
increasing
the
value
to consumers
-
Strategies
of adding
value include developing
a new product that
provides greater benefits
than existing
products or
keeping
a store open
longer
during a busy shopping
season (this
adds the
value
of shopping
convenience).
Other
strategies include
adding the
benefit
of lower cost
(ie
a
sale)
or an informational
promotion that
explains
to the customers how a product can be used in many ways
VALUE
AND UTILITY:
- by
creating value
for customers, first
organizations
need to know the kind of
benefits
that
buyers
get from a
firm¶s goods or services.
- Products must provide
consumers
with
utility
- the
ability
of a product to
satisfy
a
human
want or need
-
Marketing seeks
to provide 4 kinds of utility:
-
Time utility
- making a product
available
when
consumers
need/want them
-
Place utility
- making a product
available
where
consumers
can
conveniently
buy them
-
Ownership utility
-
transferring ownership
by from store to customer
- Form utility - turning raw
materials
into
finished
products - making products available
-
Marketing
is importnat in
providing all
4 types of
utility
as well as adding
value therefore marketers
must
NQRZFXVWRPHUV¶ wants and needs
Goods,
Services
and Ideas
-
consumer
goods are products that
consumers
buy for
personal
use
-
Consumer marketing
is the method of
selling
products to
consumers
for
personal
consumption
-
Industrial
goods are products used by
companies
to produce other products - whether the products are
used directly or
indirectly
to make other products
-
Industrial marketing
is the method of
selling
products to firms for
industrial
consumption
-
Marketing
is important for
services
as well.
Services
are
intangible
products
(like
time,
expertise,
or an
activity
that can be
purchased). Service marketing
=
marketing
your
service
whether it is to
individuals
or to
other companies
-
Marketers
promote
ideas
too
(ie
don¶t drink and drive)
RELATIONSHIP
MARKETING:
- this is a type of long term
marketing
that focuses on
lasting relationships
with customers and
suppliers
to
result
in long term
satisfaction
and customer loyalty
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The
Marketing
Environment
-
Marketing
plans,
decisions
and
strategies
are
demeaned
by outside forces
- Any
marketing
program must
evaluate
the outside factors that comprise a company¶s
external
environment,
which are
essentially
the outside factors that
influence marketing
programs by posing threats of
opportunities
-
The following
are 5
environmental
factors to consider:
1)
POLITICAL
AND
LEGAL
ENVIRONMENT:
- the
government
has
legislations
that can work with or
against
an
industry (ie
use of
cellphones while
driving)
- In order for
marketing managers
to succeed within this
environment,
they
have
to try and maintain
favourable
political/legal environments.
To do so, they may try and gain public support for their products by
supporting or
raising awareness
about local or
national
issues
- Ie run
charity campaigns
to get
involved
in the community
2)
SOCIAL
AND
CULTURAL
ENVIRONMENT:
- the current
social
and
cultural environment
is about women
entering
the workforce, more
single
parent
families, healthy lifestyles
etc
- For
example,
today people want a
greener environment
so
companies
need to address this by adjusting
their products and culture to
appeal
to these types of customers
3)
Technological
Environment:
- new
technologies
create new goods and services
- New products
erase
old products
(ie
no more
audiotapes)
and change our
values
and lifestyles
4)
Economic
environment:
- economic conditions
determine spending
by
consumers, businesses,
and governments
-
Influences marketing
plans for product
offerings,
pricing and
promotional
strategies
-
Significant
economic
variables
that affect
marketers: inflation
rates,
interest
rates,
recession
and recovery
-
This means
that
marketers
must monitor the
general business
cycle which
features
a pattern of periods of
prosperity
to
recession
to recovery
-
Consumer spending increases
as economic conditions
reflect prosperity
and
consumer
spending
decreases
during low economic growth periods
like
when
unemployment
is high and
purchasing
power is
low
- Important to
consider
the global economy -
sales
for one company in one area of the world may be high
but in others may be low
because
economic conditions in
every country/region
are different
5)
Competitive
environment:
-
marketers
are faced with the task of
convincing buyers
that they should
purchase
their products
rather
than
the products of
another
seller
- We
have limited resources
- a
dollar
that
I
spend at one firm is no
longer available
for other purchases
-
Marketing
programs seek to make its product the most attractive
-
Successful marketing
programs grab the
attention
of the
consumer
so that the
consumer
spends his/her
dollar
with that firm
-
There
are 3 specific types of competition:
A)
substitute products - a product that is
different
from those of competitors but can
fulfill
the same
need
B)
Brand competition - this is
competitive marketing
that occurs between
similar
products but the
competition is based on buyer¶s perception of the
benefits
of the products offered by particular
companies
=> how
consumers perceive similar
products and what they can offer
C) International
competition -
competitive marketing
that matches domestic
marketers
against
foreign
competitors - ie do you choose to fly with Air
Canada
or Swissair
Strategy:
The Marketing
Mix
-
Marketing
is a
business activity
that
requires
management
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Document Summary
It is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy -:078 and sellers goals => the goals of the individual and the organization. All consumers buy goods and services so we are influenced by the marketing activities of companies that want us to buy their products www. notesolution. com. Consumers are the essential ingredients in the marketing process. Consumers express needs for the essentials like food and shelter, and we express wants for nonessentials like entertainment and leisure. Needs + wants = forces that drive marketing industry. Marketing concept = the idea that the whole firm is directed toward serving present and potential customers in order to achieve a profit => the goal of the firm. To achieve the goal, the firm must get to know the customers, what they want and their changes in tastes/
