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Smm spring 2010

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  • Marketing is Managing profitable customer relationships.Fulfilling customers wants and desires in order to make a profitThe process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return

  • New Definition of Marketing (est. in 2007) Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

    (American Marketing Association)

  • Product/ServiceProducer/DelivererRetailerDistributorWholesalerCustomerRESEARCHAttitudeBehaviorCharacteristicsNecessity/DesireExistingConceptMARKETING OUTLINEMARKETINGAS A FIELD OF STUDYOPERATIONSCONSUMER BEHAVIOUR4Ps

  • Anticipating customer need Developing and Selling Product Concept

    Creating/anticipating demand

    Fulfilling demand

    Making and delivering a product to the customer

  • MARKETING PROCESSUnderstand the marketplace, customer needs and wantsDesign a Marketing StrategyConstruct a marketing program Build Profitable relationships with CustomersCapture value from customers in return

  • Marketing ManagementOrientations Production Concept

    Product Concept

    The idea that consumers will favour products that are available and highly affordableThe idea that consumers will favour products that offer the most in quality, performance and features and that organizations should therefore devote all its efforts to make continuous product improvements

  • Selling Concept

    Marketing Concept

    The idea that consumers will not buy enough of the firms products unless it undertakes a large scale selling and promotion effortThe marketing management concept holds that achei8ving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.Marketing ManagementOrientations

  • Marketing ManagementOrientations A principle of enlightened marketing that holds that a company should make good marketing decisions by considering consumers wants, the companys requirements, consumers long term interests and societys long run interestsSocietal Marketing Concept

  • Psychological FactorsPerceptionLearningBeliefs &AttitudesMotivation

  • Model of Consumer BehaviorConsumerPsychology

    MotivationPerceptionLearningMemoryPurchase Decision

    Product choiceBrand choiceDealer choicePurchase timingPurchase amountConsumercharacteristics

    CulturalSocialPersonalPsychological

  • NEED RECOGNITIONINFORMATION SEARCHPURCHASE DECISIONPOSTPURCHASE BEHVIOREVALUATION OF ALTERNATIVESBUYER DECISION PROCESS

  • Steps Between Evaluation of Alternatives and a Purchase DecisionEvaluationofalternatives

  • MARKETINTELLIGENCECONSUMER BEHAVIOUR

    Decision Heuristics and Biases

    Rules of thumb or mental shortcuts in the decision process Availability Heuristic: Consumers base their predictions on the quickness and ease with which a particular example of an outcome comes to minds

  • MARKETINTELLIGENCECONSUMER BEHAVIOUR

    Decision Heuristics and Biases

    Representativeness Heuristic: Consumers base their predictions on how representative or similar the outcome is to other examples

    Anchoring and Adjustment Heuristic: Consumers arrive at an initial judgment and them make adjustments of that first impression based on additional information.

  • MARKETINTELLIGENCECONSUMER BEHAVIOUR

    Mental Accounting

    The manner by which consumers code, categorize and evaluate financial outcomes of choices

    Prospect TheoryConsumers frame decision alternatives in terms of gains and losses according to a value function. Consumers are generally loss averse. They tend to overweight very low probabilities and underweight very high probabilities

  • MARKETINTELLIGENCECONSUMER BEHAVIOUR

    Mental Accounting

    The manner by which consumers code, categorize and evaluate financial outcomes of choices

    Prospect TheoryConsumers frame decision alternatives in terms of gains and losses according to a value function. Consumers are generally loss averse. They tend to overweight very low probabilities and underweight very high probabilities

  • MARKETINTELLIGENCECONSUMER BEHAVIOUR

    Mental Accounting

    Consumers tend to segregate gains Consumers tend to integrate losses Consumers tend to integrate smaller losses with larger gains. Cancellation Principle Consumers tend to segregate small gains from large losses. Silver-lining Principle

  • MARKETINTELLIGENCECONSUMER BEHAVIOUR

    Mapping the Customers Consumption System/Customer Activity Cycle/Customer Scenario

    How are consumers thinking? Introspective method Retrospective method Prospective method Prescriptive method

  • MARKETINTELLIGENCECONSUMER BEHAVIOUR

    Biases in Decision Making

    Plugging-in Frame Blindness Lack of frame control Overconfidence in judgment Shortsighted shortcuts Shooting form the hip Group failure

    Pg 202 Marketing Management Jay Russo and Kevin Schoemaker

  • MARKETINTELLIGENCECONSUMER BEHAVIOUR

    Biases in Decision Making by Marketing Managers

    Fooling yourself about feedback Not keeping track Failure to audit your decision process

  • Problem RecognitionPostPurchasePurchaseInfoSearch/EvalNeedRecognition

  • Participants in the Business Buying ProcessGatekeepersInitiatorsBuyersInfluencersDecidersUsersApprovers

  • Four Types of Buying BehaviorComplexBuyingBehaviorDissonance-Reducing BuyingBehaviorVariety-SeekingBehaviorHabitualBuyingBehaviorSignificantdifferencesbetweenbrandsFewdifferencesbetweenbrandsHighInvolvementLowInvolvement

  • Product

    Place

    Promotion

    Price(features, quality, service, support, product line etc.)(channel of distribution, exclusive vs. intensive, etc.)(advertising, sales force, brochures, coupons, etc.)(list price, discount, deals, both end-user and channel)

    The Marketing Mix

  • Packaging (Physical Evidence)

    Positioning (Process)

    People

    The Marketing Mix

  • Product

    Place

    Promotion

    Price(features, quality, service, support, product line etc.)(channel of distribution, exclusive vs. intensive, etc.)(advertising, sales force, brochures, coupons, etc.)(list price, discount, deals, both end-user and channel)

    The Marketing Mix

  • MARKETINTELLIGENCEIDENTIFYING MARKETSEGMENTS AND TARGETS

    Preferences Segments Homogeneous preferences Diffused preferences Clustered preferencesSEGMENT MARKETING

  • MARKETINTELLIGENCEIDENTIFYING MARKETSEGMENTS AND TARGETS

    Customers with distinct set of needs Pay premium to a firm that best satisfies their needs Unlikely to attract other competitors Nicher gains certain economies through specialization Niche has size, profit and growth potential Fairly small and attract few competitors NICHEMARKETING

  • MARKETINTELLIGENCEIDENTIFYING MARKETSEGMENTS AND TARGETS

    LOCAL MARKETINGCUSTOMERIZATION Customized Marketing One-to-one Marketing

  • MARKETINTELLIGENCEIDENTIFYING MARKETSEGMENTS AND TARGETS

    GEOGRAPHICVARIABLES Geographic region City size Density Climate

  • MARKETINTELLIGENCEIDENTIFYING MARKETSEGMENTS AND TARGETS

    DEMOGRAPHICVARIABLES Demographic age Family size Family Life cycle Gender Income Occupation Education Religion

  • MARKETINTELLIGENCEIDENTIFYING MARKETSEGMENTS AND TARGETS

    DEMOGRAPHICVARIABLES Race Generation Nationality Social Class

  • MARKETINTELLIGENCEIDENTIFYING MARKETSEGMENTS AND TARGETS

    DEMOGRAPHICVARIABLES Race Generation Nationality Social Class

  • MARKETINTELLIGENCEIDENTIFYING MARKETSEGMENTS AND TARGETS

    PRIZM (Potential Rating Index by Zip Markets) Combines Geographic and Psychographic segmentation variables togetherExamplesBlue Blood Estates, Winners Circle, Hometown Retired, Latino America, Shotguns and Pickups, Black Country Folk, Young Digerati, Beltway Boomers, The Cosmopolitans, Old Milltowns

  • MARKETINTELLIGENCEIDENTIFYING MARKETSEGMENTS AND TARGETS

    PSYCHOGRAPHICVARIABLES Psychographic Lifestyle(Culture oriented, Sports oriented, Outdoor oriented) Personality(Compulsive, Gregarious, Authoritarian, Ambitious)

  • MARKETINTELLIGENCEIDENTIFYING MARKETSEGMENTS AND TARGETS

    PSYCHOGRAPHICVARIABLES VALS Framework

  • MARKETINTELLIGENCEIDENTIFYING MARKETSEGMENTS AND TARGETS

    PSYCHOGRAPHICVARIABLESInnovatorsSurvivorsThinkersBelieversAchieversStriversExperiencersMakersIdealsAchievementSelf-ExpressionPrimary MotivationHigh ResourceHigh InnovationLow ResourceLow Innovation

  • MARKETINTELLIGENCEIDENTIFYING MARKETSEGMENTS AND TARGETS

    PSYCHOGRAPHICVARIABLESGroups with Higher Resources Innovators Successful, Sophisticated, Active, Take Charge people, with high self esteem. Purchases often reflect cultivated tastes for relatively upscale, niche-oriented products and services

    Thinkers Mature, satisfied and reflective people who are motivated by ideals and value order, knowledge and responsibility. Favour durability, functionality and value in products

  • MARKETINTELLIGENCEIDENTIFYING MARKETSEGMENTS AND TARGETS

    PSYCHOGRAPHICVARIABLESGroups with Higher Resources Achievers successful goal-oriented people who focus on career and family. Favour premium products that demonstrate success to their peers Experiencers Young, enthusiastic, impulsive people who seek variety and excitement. Spend comparatively high proportion of their income on fashion, entertainment and socializing

  • MARKETINT

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