1 CHAPTER 11 Understanding Marketing Processes and consumer behavior Reference: Ebert & Griffin...

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CHAPTER 11Understanding

Marketing Processes and consumer

behaviorReference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

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WHAT IS MARKETING?

Marketing (التسويق) is defined as the process of:

Planning and executing the conception (idea) ( مفهوم وتنفيذ having an idea for a product) (تخطيطor service and making it a reality)

Pricing (setting a price consumers will pay)Promotion (الترقيه) (advertising the product to tell

people about it)Distribution (توزيع) (placing the product in stores

where people will see it – and want to buy it) Of ideas, goods, and services to create exchanges

that satisfy individual (buying and selling) (تبادالت)(people) and organizational (company) objectives.

Reference: Ebert & Griffin (2007). "Business Essentials" Pearson,

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PROVIDING VALUEAND SATISFACTION (1)

What attracts buyers to one product and not another?

Value (القيمه) compares a product’s benefits with its costs

A satisfied buyer believes the benefits gained from purchasing the product (الفاءدات)are greater than the cost of purchasing the product (satisfied buyer = Benefits>Cost)


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PROVIDING VALUEAND SATISFACTION (2)

Satisfaction (or utility) is the ability of a product to satisfy a human want or need

Marketing tries to provide four forms of satisfaction or utility:

1. Time – when is the product purchased2. Place – where is the product purchased3. Ownership – the terms of sale of the product4. Form – the features of the product


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MARKETING: GOODS, SERVICES, AND IDEAS

The marketing of products can be divided into four main categories:

1. Consumer goods2. Industrial (الصناعية) goods3. Services4. Ideas


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GOODS1. Consumer goods are products that we buy for personal use

( الشخصي :(استعمالExample: Cars, Telephones, Clothes, Medicines Companies that sell products to consumers for personal use are

engaged in consumer marketing2. Industrial goods are products used by companies to produce

other products: Example: Aluminum, Plastic, Steel Construction equipment ( معدات(البناء

Companies that sell products to other manufacturers are engaged in industrial marketing

3. Services are intangible ( المعنوية goods (things you (الحاجةcannot see and touch) such as:Example: Time with a lawyer, Expertise of a financial planner,

Insurance for your car, hairdresser, gym Companies that sell services are engaged in service marketing

4. Marketers also promoted ideas such as:Example: Driving safely, health problems caused by smoking, keep

Bahrain tidy.Reference: Ebert & Griffin (2007). "Business Essentials" Pearson,

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RELATIONSHIP (العالقة) MARKETING

Marketing sometimes focuses on one purchase – we need or want the product, and we go and buy it. This is a single transaction ( معاملة.one purchase from one company – (واحدة

Relationship marketing tries to build long-lasting relationships with customers - to keep the customer coming back again and again so that there are many transactions – many purchases from the same company…..(Example: centerpoint card, Jawad loyalty card, sky wards card, gifts)


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THE MARKETING ENVIRONMENT

Marketing programs of companies can be influenced (تأثر) by the company’s external environment ( الخارجية things –(البيئةoutside the company that can influence the marketing program

Sometimes these outside factors can be opportunities(الفرص) (good things) and sometimes they can be threats (التهديدات) (bad things)

These external factors are: – Political-legal, – Social-cultural, – technological, – economic, – competitive environments.


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EXTERNAL FACTORS INFLUENCING MARKETING (1)

1. Political and Legal Environment ( والقانونية السياسية :(البيئةGovernment regulations can influence a company’s business:

A law banning smoking cigarettes in malls and restaurants would influence tobacco companies.

A law banning using mobile phones in cars would influence mobile phone providers.

2. Social and Cultural Environment ( والثقافيه االجتماعية :(البيئةValues, beliefs and ideas ( واألفكار والمعتقدات of (القيمconsumers influence what they buy:

Today, more people want to join fitness clubs to keep good health – so more fitness clubs have opened

More women drive cars – so car manufacturers have made the interiors of cars more pleasing to women


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3. Technological Environment ( تكنولوجيه :(بيئةNew technologies affect how products are marketed New products are available such as the satellite dish, internet

shopping. A new product – the CD – can make an old product – the audiotape

– obsolete (الباليه)

4. Economic Environment ( االقتصادية :(البيئةThe economic conditions in a country influence the way consumers buy goods

If the economic conditions in the country are good (high employment, low inflation) – consumers spend money

If the economic conditions in the country are not good (high unemployment, high inflation) – consumers do not spend money.


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5. Competitive Environment ( بيئة:(تنافسيةA marketing program tries to make one product seem more attractive (جذاب) than another product. The goal of the marketer is to make the consumer spend his or her money on their company’s product – not on a similar product produced by another company – a competitor.

The consumer has money to purchase one item – so BHS is going to try to make their products seem more attractive so that the consumer spends money in BHS – not in Debenhams


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THE MARKETING MIX

When marketing managers plan their marketing campaigns, they rely on the “Four P’s” of marketing:

Product, Pricing, Promotion, Place ( والمكان والترويج والتسعير (المنتجات

(P 255 / 4th & P 294 / 5th)


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Marketing Mix Product

Marketing begins with a product – a good, service, or idea designed to fill a consumer need (or want!)

Product differentiation ( المنتجات بين describes the way (المفاضلهmanufacturers try to make the image or features (ميزات) of their product appear different – and better – than other similar products Example: Manufacturers of cars may advertise their products in a way that

makes them seem safer, faster, or better designed than other makes of cars.

Pricing

Pricing a product is selecting the most appropriate (مناسب) price at which to sell it. The product must be priced high enough that the company making the

product will make a profit. The product cannot be priced too high – if it is too high, consumers will not buy it. A “middle” price has to be found – one that makes a profit for the manufacturer and is also acceptable to the consumer.


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MARKETING MIX

PlacePlace refers to the distribution(توزيع) of the product – placing the product for sale in the proper outlet – perhaps a retail store. Products must be transported from the manufacturer to the

retail store – by plane, by road, by rail. Products may also have to be stored in a warehouse before

being sold and the correct inventory has to be decided. Promotion (الترقيه)

is the way in which manufacturers communicate information about their products to consumers. Examples: Advertising, Personal Selling, Sales Promotions, and

Public Relations


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CHOOSINGTHE MARKETING MIX

Product – The basic design of the product+Price – How much the consumer will pay+Place – Where and when the product is

available+Promotion – Product image and visibility=Customer satisfaction and business profitability


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Promotion: ADVERTISING

Advertising (االعالن) is any paid non-personal communication used to identify a product. To advertise products, companies use:

NewspapersMagazinesTVRadioBillboardsInternet Web Sites


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Promotion: PERSONAL SELLING

This is person-to-person selling – the sales representative of one company visits the purchasing agent or another company to inform the purchasing agent about the product

Personal selling to consumers is done through sales clerks in stores, insurance salesmen for car and home insurance, and real estate agents when buying land or houses

These are used to encourage consumers to buy products – they are used to “promote” sales


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Promotion: PUBLIC RELATIONS ( العامة (العالقات

Public relations are used to build goodwill and a favorable attitude ( إيجابي موقف وبناء النية towards (وحسنthe company or product.

Companies hope that by building goodwill towards their company, consumers will buy more of their products

Companies such as Batelco sponsor sports teams ( رعايه فيالرياضية to help young people become involved in sporting (الفرق

activities.

McDonald’s funds “Ronald McDonald Houses” – houses where the parents of sick children can stay at no cost while their children are in the hospital in a different city from where their own home is located.


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TARGET MARKETING AND MARKET SEGMENTATION

All people do not want or need the same products and services, therefore we target market ( التسويق .(هدف

Target marketing – groups of people with similar wants and needs.

Identifying the target market is usually the first step in developing a marketing strategy ( تسويق استراتيجية .(وضع

Example: Clothes – we all need clothes – but we want different types of clothes – teenagers want different clothes from their parents. Teenagers are one target market; parents are another.


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MARKET SEGMENTATION ( السوق (تجزئة

This refers to taking a target market – teenagers – and dividing (تقسيم) the total market into customer types or “segments”.

Clothing manufacturers make different types of clothes to appeal to the tastes of different types of teenagers.

Cars are another good example – there are many different types of cars from a small Honda Civic to a large Range Rover. They are all cars – but very different types of cars – and they attract different types of customers.


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UNDERSTANDINGCONSUMER BEHAVIOR

What makes us buy one product and not buy another?

Why do we buy a Nokia phone and not an Eriksson phone?

Consumer behavior ( المستهلك is (سلوكthe study of the decision process by which customers come to purchase and consume products

(P 261 / 4th & P 299 / 5th)


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INFLUENCES ONCONSUMER BEHAVIOR (1)

What influences (تأثيرات) our behavior when we buy a product?

Is it our own motivations, abilities, and attitudes – the need to impress others by

driving a large, expensive car? (Psychological influences ( التأثيرات((النفسية

Is it our lifestyle – a mother with three young children will find it easier to drive the

children in a jeep instead of a small car. (Personal influences ( التأثيرات((الشخصيه

Is it the opinion of our family and friends who recommend a certain car because they have had good experience with that car? (Social influences ( التأثيرات((االجتماعية

Is it because all of our family and friends own similar cars – and we want to “fit” into the group? (Cultural influences ( الثقافيه ((التأثيرات


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Brand Loyalty and THE CONSUMERBUYING PROCESS

Brand Loyalty (( والء التجارية means that consumers regularly ((العالمهpurchase the same products because they are satisfied with the performance of the product.

Marketers study the consumer buying process ( المستهلك شراء to (عمليةfind out what influences a consumer:

From the time the consumer decides he or she needs a product

To the time the consumer buys the product

Until the time the consumer uses (or consumes) the product

Imagine you decide to buy a new mobile phone. What would interest marketers in how you made your decision as to which mobile phone to buy?


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The Consumer Buying Process[1]

1. Problem/need recognition ( / الحاجة المشكلةاالعتراف the first step where the consumer :(الى

recognizes a problem or need. Example: after exercise, you may realize that you are thirsty (need to buy water).

2. Information seeking ( المعلومات عن :(البحثthe second step is to search for information, not always extensive search, but in major purchases (like buying a car) most people seek information from personal sources, public sources, and experiences.


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The Consumer Buying Process[2]3. Evaluation of alternatives ( البدائل by :(تقييم

analyzing product attributes (color, price, quality) you can will compare products before deciding which one best meets your record.

4. Purchase decision ( الشراء ”buy“ :(قرارdecisions are based on rational motives, and emotional motives. Rational motives ( الرشيد reasons for :(دوافع

purchasing a product that are based on a logical evaluation of product attributes. (cost, quality, usefulness)

Emotional motives ( عاطفيه Reasons for :(دوافعpurchasing a product that are based on nonobjective factors.

(sociability, imitation of others).Reference: Ebert & Griffin (2007). "Business Essentials" Pearson,

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5. Post purchase evaluation ( التقييم شراء :(بعد

what the consumer feel after the sale is important. Marketers want the customers to be happy after buying the product so they can buy them again.

consumers do not want to go through complex decisions process for every purchase, they often repurchase products they have used and like.

unsatisfied consumer are not likely to buy the product again, and they will more broadcast their bad experience rather than satisfied consumers.

The Consumer Buying Process[3]


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WHAT IS A PRODUCT?

When consumers purchase a product – ideas, goods, or services – they actually purchase much more than the product itself.


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PRODUCT FEATURES and Benefits

Product features (ميزات) are the qualities that a company builds in to its products.

Product benefits (الفاءدات) are what use of the product gives you


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VALUE PACKAGE ( قيمة(الصفقة

Today’s consumer sees a product as a “bundle” or “group” of attributes (الصفات) (features and benefits) that together form the “value package”

Buyers expect to receive products with greater value – products with more features and benefits at a reasonable cost

Some of these possible attributes for the purchase of a personal computer are listed on the next side


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PERSONAL COMPUTERVALUE PACKAGE

Choices in monitors, keyboards, and processing capabilities

Choices in colourAttractive software packagesAttractive pricesFast deliveryWarranties (guarantees)Technical supportPrestige of owning a “state-of-the-art” computer

system


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CLASSIFYING (تصنيف)GOODS & SERVICES

One way to classify products (to put them into groups) is according to expected buyers.

There are two groups of buyers:

Buyers of consumer products ( المنتجات(االستهالكيه

Buyers of industrial products ( المنتجات(الصناعية


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CLASSIFYINGCONSUMER PRODUCTS

Consumer products are usually divided into three groups:

Convenience (راحة) Goods & Convenience Services

Shopping Goods and Shopping Services

Specialty (التخصص) Goods and Specialty Services


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CONVENIENCE GOODSAND CONVENIENCE SERVICES

These convenience (easy) products and services are purchased and consumed often

They are inexpensive, purchased often (sometimes daily) and with little thought: groceries and newspapers and take-away foods

Consumers will buy these goods at the first available store which sells them


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SHOPPING GOODSAND SHOPPING SERVICES

These are products and services which cost more money and are purchased less often

These are goods such as TVs, CD players, washing machines, home furniture and services such as car insurance.

Consumers “comparison shop ( مقارنة for these products – they look at ”(متجرdifferent brand names and go to different stores to get the best value for their money.


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SPECIALTY GOODSAND SPECIALTY SERVICES

These are goods and services which consumers view as extremely important purchases.

They are products which are purchased rarely and are usually very special to the consumer. They are expensive products and services such as: wedding dresses, gold jewelry, and services like wedding receptions at hotels.

Before shopping for these goods or services, consumers usually know exactly the type of product they want – and will accept no other product. Consumers will spend a great deal of time and a lot of money to get the exact product they want.


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CLASSIFYINGINDUSTRIAL PRODUCTS

Industrial products are divided into two types:

Expense items and capital items

These two items are divided by cost and how they will be used


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EXPENSE ITEMS Expense items are materials and services that are

consumed quickly and regularly (within one year) by firms which produce other products or services.

Soft drink manufacturers such as Pepsi buy aluminum cans – the company makes Pepsi but needs to buy cans to hold the drink. The company’s product is not cans – it is Pepsi. The cans are an expense incurred to make and sell the Pepsi.

The expense item is used up in producing the product the company sells – the cans are used up when selling the soft drink Pepsi.


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CAPITAL ITEMS Capital items are permanent (دائم) (long-lasting) and

expensive items which will be used by the company for many years.

These capital goods include buildings (offices and factories), fixed equipment (shelving and freezers in a grocery store, baking ovens in a bakery, the equipment which makes the Pepsi drink in the factory) and accessory equipment (busses in the National Transportation Company, computers in NBOB’s office building, aircraft at Gulf Air).

Capital services may include food services for employees and building and equipment maintenance.


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THE PRODUCT MIX

The product mix is the group of products a company makes available for sale – consumer products, industrial products, or both.

The textbook uses the example of the Black & Decker company.

This company makes toasters, kettles, vacuum cleaners, and electric drills – a variety of different products made by the same company.

(P 267 / 4th & P 306 / 5th)


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PRODUCT LINES

Many companies begin business selling one product only

Over time, they find that the one product does not fill the needs of every consumer – and so they introduce other similar products to meet the needs of different consumers…..


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