11

chapter Marketing Processes and

Consumer Behavior

Business Essentials, 7th Edition

Ebert/Griffin

Instructor Lecture
PowerPoints
PowerPoint Presentation prepared by
Carol Vollmer Pope Alverno College
 What’s in It for Me?
• Why does marketing matter to you?
– By grasping this chapter’s presentation of
marketing methods and ideas, you’ll benefit in
two ways:
• You’ll be better prepared to use marketing in
your career as both employee and manager
• You’ll be a more informed consumer with
greater awareness of how businesses use
marketing to gain your purchases

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© 2009 Pearson Education, Inc.
 Discussion

What is marketing?
Can you see marketing
elements around you? Give
example.

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 What Is Marketing?
• Marketing
– “A set of processes for creating,
communicating, and delivering value
to customers and for managing
customer relationships in ways that
benefit the organization and its
stakeholders” (AMA)
• Finding a need and fulfilling it with a
new product or service.
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 What Is Marketing?
• Providing Value and Satisfaction
–Limited financial resources force us
to be selective.
–Consumers buy products that offer
the best value when it comes to
meeting their needs and wants.

© 2009 Pearson Education, Inc. 5

 Discussion
What is the difference between needs and
wants?
A need, if we refer back to Maslow’s Hierarchy
of Needs, is something the consumer needs in
order to live or function in his life or career. This
could mean food, shelter, clothing,
transportation, shoes, etc.
What separates consumer need from want is
money. Here is an example: I need a coat
because it is cold outside. I want a fake fur coat
that will look trendy in the clubs.
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 What Is Marketing? (cont’d)
• Value and Benefits
– Value compares a product’s
benefits with its costs.
– Benefits include not only the
functions of the product but also
the emotional satisfaction
associated with owning,
experiencing, or possessing it.

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 Value and Utility
1.Form utility: Designing products customers
want.
2.Time utility: Creating sales contracts that
specify when the product will be delivered.
3.Place utility: Creating contracts that specify
where the products will be delivered to the
consumer.
4.Ownership utility: Arranging to transfer
product ownership to customers by providing and
setting sales prices, setting payment terms and
providing ownership documents.
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 Goods, Services, and Ideas
– Consumer goods: Tangible goods that
consumers may buy for personal use
• Consumer marketing is used to inform
people about these goods.
– Industrial goods: Physical items used
by companies to produce other
products
• Industrial marketing: used to inform
companies about these goods.

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 Goods, Services, and Ideas
–Services: Products with intangible
(nonphysical) features
• Service marketing
• Relationship Marketing
–Emphasizes building lasting
relationships with customers and
suppliers: results, customer
satisfaction and retention.

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 What Is Marketing? (cont’d)
• It is important to record any
information you can obtain about
your customers’ purchasing
habits.
• Data Warehousing and Data Mining
are used for Building Customer
Relationships
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 What Is Marketing? (cont’d)
– Data warehousing: The compiling and
storage of consumer data
– Data mining: Automating the massive
analysis of data by using computers to
sift, sort, and search for previously
undiscovered clues about what
customers look at, react to, and how
they might be influenced
© 2009 Pearson Education, Inc. 12
 The Marketing Environment
Marketing strategies are not determined unilaterally
by any business- they are influenced by powerful
forces. They include:
– Political-legal environment
– Sociocultural environment
– Technological environment
– Economic environment
– Competitive environment
• Substitute products
• Brand competition
• International competition
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 What Is Marketing? (cont’d)
• Strategy to develop The Marketing
Mix
– Marketing Plan
• A detailed strategy for focusing
marketing efforts on consumer needs
and wants
– In planning business develops the
Marketing Mix: 4 Ps

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 What Is Marketing? (cont’d)
• Strategy to develop The Marketing
Mix
• Product: Differentiating the product,
positioning it in the marketplace,
packaging the product and providing
a product warranty. Developing a
product is a challenge, why.

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 What Is Marketing? (cont’d)
• Strategy to develop The Marketing
Mix
• Price: Selecting the best pricing
strategy at which to sell a product.
Price include: cost + profit margin.
Price has to be convenient to
customer.

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 What Is Marketing? (cont’d)
• Strategy to develop The Marketing
Mix
–Marketing Mix: 4 Ps
• Place: Distributing a product
through the proper channels.
• Inventory and warehousing
control and use of transportation
are part of distribution.
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 What Is Marketing? (cont’d)
• Strategy to develop The Marketing
Mix
– Marketing Mix: 4 Ps
1.Promotion: Communicating
information about a product to its
potential consumers. This includes
advertising, sales promotion, public
relations, etc.
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 Discussion

Give examples about Advertising, sales

promotion

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 Group work
I need to buy Toyota car , I prefer silver
color. The problem I don’t have enough
money to pay. I may borrow from bank,
it will cost me 20000$. In addition, I am
unsure where to buy from, though I
heard about the product from radio.
Question: identify the marketing mix .

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 Target Marketing and Market
Segmentation
• Target Markets: Groups of people with similar
wants and needs who can be expected to
show interest in the same products.
• Selecting the target group is first step in
marketing strategies. Why?
• The target marketing requires market
segmentation.
e.g., Hyundai offers automobiles with
various features at various prices.
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 Target Marketing and Market
Segmentation
• Market Segmentation
–Dividing a market into categories
of customer types or “segments”.
–Market segment must share
common traits that affect their
purchasing decisions.

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 Segmentation variables:
1.Geographic: Areas of a country or region
where buyers are located. E.g., Urban areas
do not need agricultural equipments.
2.Demographic: Statistical information
about age, income, sex, race, education, etc.
3.Psychographic: Values, attitudes and
lifestyles of a consumer or group of
consumers, e.g., family size affect size and
type of purchasing.

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TABLE 11.1 Demographic Variables

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 Case study
I decided to buy a suit for my self. I wondered
where to go. At the end I went to men’s wear
shop. The shop specialized in selling suits for
men only, specially matured of age over 20
years.
Question: identify the segmentation categories
in this case.

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Understanding Consumer Behavior
•It is important that we understand
how and why consumers behave the way
they do when making purchases.
•There are four influences on consumer
behavior. These include:
1.Psychological influences: These influences
can include a person’s values, attitudes ability
to learn.

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Understanding Consumer Behavior
1.Personal influences: These influences can
include personal preferences based on
personality, life style, economic status.
2.Social influences: These influences can
include social status, having the latest or
greatest version of an item.
3.Cultural influences: These influences can
include behaviors or beliefs specific to one’s
cultural heritage.

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 Understanding Consumer Behavior

• Brand Loyalty
–Consumers who regularly purchase
products because they are satisfied
with their performance

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FIGURE 11.1 The Consumer Buying Process

• Problem\Need Recognition
• Information Seeking
• Evaluation of Alternatives

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 Organizational Marketing and Buying
Behavior
• Organizational Markets 3 types:
–Industrial Markets
• Businesses that buy goods to be
converted into other products or
that are used up during
production

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 Organizational Marketing and Buying
Behavior
• Organizational Markets 3 types:
– Reseller Markets
• Intermediaries, including
wholesalers and retailers, that buy
and resell finished goods
– Government and Institutional
Markets
• Federal and state governments
• Nongovernmental organizations
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Organizational Marketing and Buying Behavior (cont’d)
• Organizational Buying Behavior
– Differences in Buyers
• Organizational buyers are professionals
who negotiate the buyer-seller
agreement (purchase terms)
– Specialists in purchasing a line of items
– Experts about the products purchased

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 Group work

Draw example on Government and

Institutional Markets in Gaza

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 Organizational Buying Behavior
•The differences in buyer-seller relationships in
organizational markets versus consumer markets
include the following:
1.Organizational buyers usually make frequent
purchases.
2.Organizational buyers form enduring long-term
relationships.
3.Buyers and sellers in organizational markets may
work closely.
4.Organizational marketing also puts a heavy
emphasis on personal selling.
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 Discussion

Who can describe the buying behavior of

supermarket in relation with a
wholesale.

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 What Is a Product?
• Product Defined
– A value package that provides a bundle of
benefits and features to satisfy the needs and
wants of customers
• Product Features
– Tangible and intangible qualities built into a
product
• Benefits
– The tangible and intangible outcomes associated
with acquisition or use of a product

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TABLE 11.2 Categories of Consumer Products

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TABLE 11.3 Industrial Products

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 The Product Mix
• Product Mix
– The group of products (consumer, industrial,
or both) that a company makes available for
sale. E.g., IUG products.
• Product Line
– A group of products that are closely related
because they function in a similar manner or
are sold to the same customer group who
will use them in similar ways.

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 The Product Mix
• Multiple (or Diversified) Product
Lines
– Allow a company to grow rapidly and
can help to offset the consequences of
slow sales in any one product line.
–Please give an example of a
product line for a consumer
products company

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 Developing New Products
• The New Product Development Process
– Research and development (R&D)
• Departments for exploring new product
possibilities
– Product mortality rates
• Few product ideas (1 in 50) actually reach the
market
– Speed to market
• Responding to customer demand or market
changes by introducing new products to the
market ahead of competitors
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FIGURE 11.2 Products in the Life Cycle: Stages,
Sales, Cost and Profit

© 2009 Pearson Education,

42 Inc.
 Identifying Products
–Branding Products
• Branding
–A process of using symbols to
communicate the qualities of a
particular product made by a
particular producer
»Signals uniform quality and
stimulates consumer recall. E.g.,
K cheeze, coca cola.
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 Identifying Products
• Branding Products
• Consumer preference for a
particular product
– Brand awareness
• The brand name that comes first to
mind when consumers consider a
particular product category

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 Identifying Products (cont’d)
• Gaining Brand Awareness: Requires
several methods of promotion including:
– 1 Product placement
• A promotional tactic for brand
exposure in which characters in
television, film, music, magazines, or
video games use a real product that
is visible to viewers. E.g., when
people drinking coca cola during
football game TV watching.
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 Gaining Brand Awareness
• Requires several methods of promotion
including:
–2 Buzz marketing
• A form of word-of-mouth marketing. They
give sample to people and ask them to tell
friends about it.
–3 Viral marketing
• Form of Buzz marketing that relies on
Internet to spread information like a “virus”
from person-to-person about products and
ideas
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 Packaging Products
–Purposes of packaging
1.Reduce the risk of damage, breakage,
or spoilage
2.Increase the difficulty of stealing small
products
3.Serves as an in-store advertisement
that makes the product attractive
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 Packaging Products
–Purposes of packaging
1.Displays the brand name
2.Identifies features and benefits
3.Enhances the utility of the product
features and benefits

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The International Marketing Mix
1.International products: Products sold
internationally need to adapt to the needs of
consumers in the foreign market.
2.International pricing: There will probably
be higher transportation and selling costs
abroad, but pricing cannot be raised just for
this reason. A marketer needs to take into
account the income of the consumers,
currency exchange rates and competitive
pricing.
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© 2009 Pearson Education, Inc.
 The International Marketing Mix
1.International distribution: access to a
distribution network in foreign markets. For
example, in many parts of the world the super
or hyper market concept is new and only exists
within major cities. How will the company
distribute and sell its products in the
outlying/remote areas of a country?
2.International promotion: Promotion
requires cultural sensitivity and hence
adjustments to the marketing mix.
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 Small Business and the Marketing Mix
• Small-Business Products
– Product failures due to lack of market
potential for products or marketing to the
wrong target market segments
• Small-Business Pricing
– Losses due to pricing errors resulting from
underestimating operating expenses

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 Small Business and the Marketing Mix
• Small-Business Distribution
–Poor location choice fails to attract
customers
• Small-Business Promotion
–Careful promotion can reduce
expenses. It requires budget.

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