STEN 1000 Chapter Notes - Chapter 10: Marketing Mix, Psychographic, Cognitive Dissonance
20 Jun 2018
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CHAPTER 10 – THE MARKETING CHALLENGE
Marketing – the process through which organizations design, develop, and communicate the
value of their products and/or services
- Assessing market dynamics
- Identifying needs and solutions
- Market research
- Determining price
- Development of distribution channels and options
- Creating awareness and preference for the products
- Development and delivery of an advertising or media campaign
- Public relations
Value – ability of an organization to communicate (to existing and potential customers” why its
product/service meets the needs of the customer, and why it should be judged superior to those
of competitive alternatives
2 Fundamental Principles (associated with customer behaviour)
1. Customers don’t but products or services – they buy solutions to problems or needs
2. Customers ill not pay more for a product if they can get a similar product got less
- Higher quality, uniqueness, importance, convenience ! the greater the value to customers
(also intangible traits: peer acceptance, status, emotional benefits, pride of
ownership, brand loyalty)
The role of marketing – to determine who desires a given product/service, what is important to
them in making this decision, how the company should
position its relative to rivals, and how to communicate
and deliver the value the customer desires
Marketing – the process of determining customer
needs and wants and then developing products and
services that meet or exceed these expectations
Understanding the Customer Decisions
Decision Influencers:
- Marketing Mix influences - Product, Price,
Place, Promotion
- Sociocultural influences – reference groups, family, social class, culture, subculture
- Ex. opinions from family members, renting vs. buying, cultural foods/clothing
- Situational influences – type of purchase, social surroundings, physical surroundings,
previous experience
- Ex. impulse buys, popcorn at movies (physical surr.), seasonal buys, product tied
to a memory/nostalgia
- Psychological influences – perception, attitudes, learning, motivation
- Ex. eco-friendly, intuitive product,
healthier food, luxury items (their
perceptions)
The buying (decision-making) process (fig. 10.12)
1. Initial consideration of options (problem
recognition + informative search)
2. Active consideration and evaluation of
options
3. Point of purchase (purchase decision or no
purchase)
4. Post-purchase evaluation
(ex. cognitive dissonance – buyer’s remorse,
customers don’t come back)
Goals for marketers in customer decision-making process (fig. 10.13):
- Be at the top of customer’s purchase list during decision-making process, reinforce and
support the purchase of our product
- If not at the top of customer’s list: disrupt predetermined list of available options to buy,
create awareness and preference for our products over competitors
- Reinforce and support customer to develop loyalty and commitment to our product !
future purchases become almost automatic, little consideration of alternatives
Post-purchase influence
- Customers need immediate and on-going reinforcement that they made the right choice.
Especially important in more expensive products/services ! develops customer loyalty
and commitment
- On-going servicing and training – esp. for business-based purchases. The quality of these
support services is as important as the initial purchase
- Satisfied customers tell others about the quality of products/services they purchased.
Active referrals ! broaden customer base
Marketing Tools (fig. 10.14)
- Company-driven marketing techniques
- Advertising, sales promotion, publicity, point of purchase displays, dedicated
sales force
- Consumer-driven marketing techniques
- Internet searches, product reviews, peer recommendations, analysts’ blogs, social
media
- Channel support and interaction techniques
- Dealer incentives, point-of-purchase
discounts, channel member training,
exclusivity arrangements, salesperson
recommendations
Maximizing customer loyalty (fig. 10.15) – customers
skip the initial stages of decision-making, company’s
product is simply impeded into buying habits, don’t consider alternatives
- Continual reinforcement and rewarding loyalty ! minimize customer desertion
Growing the customer base (fig. 10.16)
Existing customer base + new customers – deserting customers = new customer base
Marketing Challenges
The Six ‘R’s of marketing ! 6 Core Challengers of Marketing (fig. 10.2)
1. The Right Need to pursue – need identification
2. The Right Solution to offer - assessment of our ability to respond
3. The Right Value Proposition - value proposition creation and positioning
4. The Right Methodology for delivery – distribution capabilities
5. The Right Price to charge – price point validation
6. The Right Communication Message to use – message development and delivery
1. Do we understand our targeted customers’ needs and desires
2. Do we believe that our current or anticipated product and/or service represents a viable
solution to the targeted customers’ needs and/or desires?
3. Can we create a value proposition that positions our product and/or service as the best
solution to our targeted customers?
4. Is there an existing or potential viable distribution model for delivery of our product
and/or service to the marketplace in a manner that effectively reaches our targeted
customers?
5. Can we support the product and/or service and its delivery to the marketplace at a price
point that is attractive to the targeted customer and that allows us to be profitable?
6. Can we develop and deliver to the targeted customers a communication message that
will attract these buyers to our product/service?
7. Do we understand our targeted customers’ needs and desires
8. Do we believe that our current or anticipated product and/or service represents a viable
solution to the targeted customers’ needs and/or desires?
9. Can we create a value proposition that positions our product and/or service as the best
solution to our targeted customers?
10. Is there an existing or potential viable distribution model for delivery of our product
and/or service to the marketplace in a manner that effectively reaches our targeted
customers?
11. Can we support the product and/or service
and its delivery to the marketplace at a
price point that is attractive to the targeted
customer and that allows us to be
profitable?
12. Can we develop and deliver to the targeted
customers a communication message that
will attract these buyers to our
product/service?
Document Summary
Marketing the process through which organizations design, develop, and communicate the value of their products and/or services. Creating awareness and preference for the products. Development and delivery of an advertising or media campaign. Value ability of an organization to communicate (to existing and potential customers why its product/service meets the needs of the customer, and why it should be judged superior to those of competitive alternatives. 2 fundamental principles (associated with customer behaviour: customers don"t but products or services they buy solutions to problems or needs, customers ill not pay more for a product if they can get a similar product got less. Higher quality, uniqueness, importance, convenience the greater the value to customers (also intangible traits: peer acceptance, status, emotional benefits, pride of ownership, brand loyalty) Marketing the process of determining customer needs and wants and then developing products and services that meet or exceed these expectations. Sociocultural influences reference groups, family, social class, culture, subculture.
