MOS 1021 Consumer Behaviour Chapter 1-10

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Consumer Behaviour
Chapter 1: Marketing Fundamentals
"The essence of marketing is discovering consumer insights."
The Essence of Marketing [p.5]
- Marketing success is rooting in focusing on consumers and providing them with value
through products and services that meet their needs
- Challenge: crafting marketing programs that create a distinct image for the product,
setting it apart from the competition, while also appearing to consumers' needs
- Marketer's ultimate objectives are to
- realize a profit (for-profit sector)
- generate revenue to fund their programs and run their operations (non-profit
sector)
Focusing on Consumer Needs
- Programs focus on consumer needs, try to delight consumer and encourage customer
loyalty
- Challenge: clearly determine these needs and understanding how they can best be met
with meaningful marketing approaches
- Consumers do not always know what they want
- Consumers do not always want to articulate their feelings
- Consumers are unable to communicate and rationalize their preferred
choices --> marketers may become misguided in their observations and
conclusions
- Reasearch: difficult area to navigate; requires
- Insight into where brand should be heading
- Flexibility and clarity of thought to discern good ideas from bad
- Take calculated risks on results that are not crystal clear
Creating Customer Value
- Create customer loyalty by providing customers with products and services that have
added value; through
(1) pricing strategies
(2) product design
(3) service elements
- Customer value: unique combination of benefits received by targeted buyers that
includes quality, price, convenience, on-time delivery, and both before-sale and after-
sale services
- Deliver value by managing each element of marketing mix (product, price,
place, promotion) so that thsi value is evident to consumers
Appealing to Target Markets
- Cannot satisfy everyone's need
- Must use limited funds; better to channel resources toward groups of consumers that
are most interested
- Target market: the specific group of existing and potential consumers to which a
marketer targets its marketing efforts
- Geared to appeal to product's specific target market; each element of
marketing mix appeals to characteristics of target group
Coordinating the Marketing Mix
- Marketing mix: the 4 Ps--product, price, place, promotion
1- Product: all the attributes that make up a good, a service, or an idea,
including product design, features, colour, packaging, warrantee, and service
levels
2- Price: expected retail shelf price and sale price of the product
3- Place: Distribution channels and retailers required to sell the product
4- Promotion: Communication tools needed to inform consumers about the
product, including advertising, sales, promotion, public relations, direct marketing, and
personal selling
- Determined by market research and constant evaluation of marketing programs to
understand how marketing efforts can best meet consumer needs
- Pick up on consumer preferences, design marketing programs that coordinate each
element of the marketing mix to meet specific target market needs
The Marketing Process [p.8]
- Marketing process: involves
(1) Identifying consumer needs
(2) Managing the marketing mix to meet these needs
(3) Realizing profits
- Throughout cycle, constatntly evaluate success of programs, implement and
recommend future changes to make programs more competitive and alluring to
consumers
- Marketers are ultimately responsible for generating company profits/revenues
- Manage all elements of marketing mix and using research to help generate
profits or revenues for organization
- Marketing: process of planning goods, services, or ideas to meet consumer needs and
organizational objectives. It includes the conception of these products and the pricing,
promotion, and distribution programs designed to make a profit.
- Objectives of both buyers and sellers must be met for exchange to occur
- Exchange: the trade of things between buyers and sellers so that each benefits
What Can Be Marketed?
- Good: a product you can touch and own (i.e. Adidas running shoes, Red Bull)
- Service: a good that is intangible, that you cannot touch (i.e. therapy session, watching
a movie)
- Idea: a concept that typically looks for your support (i.e. WWF Earth Hour)
What Is a Market?
- Market: potential consumers with both the willingness and ability to buy
- Market: buyer of product
- Target market: buyer and user of product
- Consumers: user of product
The Evolution of Business Philosophies [p.10]
- Production orientation: focusing organizational efforts of the manufacture of goods
- In the 1930s, goods were in short supply, and would sell regardless of quality;
consumer needs were not a priority
- Sales orientation: focusing organizational efforts on selling as many products as
possible
- 1930-60s, industrial revolution; production became more efficient, products
were in abundance
- Goals was to hard-sell for profit; consumer needs were not major
considerations
- Marketing orientation: focusing organizational efforts to collect and use information
about cusomers' needs to create customer value
- After 1960s marketplace got more competitive, businesses became more
sophisticated
- Marketing concept: the idea that an organization should strive to satisfy the needs of
consumers while also trying to achieve organizational goals
- Share information collectedc about customers' needs across departments and
use it to create customer value
- Relationship marketing: while organizations create long-term links with customers,
employees, suppliers, and other partners to increase loyalty and customer retention
- In 1990s, carefully uses information on customers to develop relationships and
retain loyalty --> greater profit
- Involves a personal, on-going relationship between an organizationand its
customers that ofter starts before sale occurs, lasts well beyong point when sale has
concluded
- less expensive to service and maintain current customer than obtain new ones
The Progression of Marketing and Evolving Areas
- Progression in marketing thinking due to consumer expectations, societal pressures,
technological changes, and philosophy of doing business
- Latest evolving areas:
1- Customer relationship management
2- Experiential marketing
3- Corporate social responsibility
Customer Relationship Management