Chapter 11
Marketing Processes
and Consumer
Behavior
Day 3
PowerPoint Presentation by Charlie Cook
Copyright © 2005 Prentice Hall, Inc.
All rights reserved.
MPC’s deeper offerings: Dr. Judee Timm
• Busi 50 introduction to Marketing
 Flow of goods from producer to consumer
 Consumer behavior
 Marketing research
 Sales management techniques
• Busi 36 Introduction to International Marketing
 Market entry strategies
 Foreign market analysis
 The “Four P’s”
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–2
Key Topics
• Marketing: Definition, History, Role
• The marketing plan
• External marketing research
 The external marketing environment
 Segmentation and target marketing
 Competition analysis
 The buying process - Consumers and
Organizations
• Product, our first “P”
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–3
What Is Marketing?
American Marketing Association definition:
“Marketing is an organizational function and 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. “
OR
Finding a need and filling it!
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–4
Marketing History
– early to mid
1900’s
•This is our product.
How do we make
people buy it?
Got a headache yet?
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10–6
Marketing History – Later 1900’s
•How can we tailor
our message to
appeal to certain
groups?
• Branding and
demographic
affiliation
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10–7
Marketing History –Now
• How do groups define
themselves?
• How can we get inside their
cultural definition as an active
member?
 Relationship marketing
• How can we be at the center of
their community?
• Standing out in a sea of media
clutter without being clutter ala
Honda, Geico, etc.
• Do all that without looking like
we are doing any of it……
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10–8
Modern marketing :
Emotional
Branding
• Setting the course
 Link to news story
Song’s failure
• Why did Song fail?
 Review
 Link to news story
 Where is Song now?
 www.flysong.com
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–9
Marketing’s role in the firm
• Strategic direction
 The marketing plan
• Products offered
• Pricing
• Placement
 Distribution decisions
• Promotion
 Communications
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10–10
The Marketing Plan
• External analysis
 Competition analysis
 Market segmentation
• Internal analysis
 S.W.O.T., and finding our
purpose
• Marketing Strategy
 Mission, objectives,
 Target markets, our positioning
 Product, Price, Place, Promotion
• Financials and controls
 Measurements and control plans
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–12
The point: Marketing Mix,
or The “Four P’s”
roduct
rice
lace
romotion
(Distribution)
What is our “Value proposition”?
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10–13
The External Marketing
Environment
An environmental scan
considers these factors’
relative importance to
the decision at hand.
Changes here are
great resources for
spotting opportunity.
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Figure 10–1
10–14
External Analysis:
Basic Competitor Analysis
• Who are our competitors?
 Brand, Substitute, international
• What drives customers’
decisions between us?
 What do they do better than us?
 Where are we about the same?
 What do they do worse than us?
• What opportunities and
threats does this knowledge
reveal?
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–16
Pick a company!
• Mine: an exercise facility in the new Marina
development
• Yours:
 From your earlier mission exercise?
 Taco Bell’s Alvarado street location?
 You in your quest for the perfect career?
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–17
A Competition Analysis Matrix
Customer
valued
attributes
Us
---------------Competitors--------------
Performance codes: S=Strong, M=Medium, W=Weak
10–18
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
A Competition Analysis Matrix
Customer
Us
---------------Competitors-------------valued
Slim Gym
Sports
24 hour
Your
attributes
Center
garage
Quality &
Features
S
M
W
Price
W
M
S
Convenience
M
M
S
Performance codes: S=Strong, M=Medium, W=Weak
10–19
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Positioning – Looking for our position in
the competitive marketplace
Build the Matrix
3)
Plot competitors
on the matrix
4)
Find opportunity
5)
Try again with
another pair of
attributes
Attribute 2
Strong
Strong
2)
Weak
Attribute 1
Select Two key
attributes to
check
Weak
1)
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10–20
Positioning – Quality vs. price
Expensive and
crummy aren’t so
good either.
3)
Where should we
fit in?
Strong
2)
Expensive
Quality/Features
Cheap and good
aren’t feasible.
Weak
1)
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Price
Cheap
SC
24
G
10–21
Positioning – Quality vs. Convenience
Strong
Is there room for
a convenience
advantage?
Weak
Weak
2)
Inconvenient and
high quality
would get beat by
SC
Quality/Features
1)
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Convenience
Strong
SC
24
G
10–22
Positioning – Quality vs. Convenience
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Convenience
Strong
G
Cheap
Is there room for
a convenience
advantage?
Weak
Expensive
2)
Inconvenient and
high quality
would get beat by
SC
Price
1)
24
SC
10–23
External Analysis: Market Segmentation
• Market Segmentation
 Dividing a market into customer
categories
 Current
and potential
• Target Marketing
 Selecting a category of
customers with similar wants
and needs who are likely to
respond to the same approach
• Which segment should we
target with our new…….?
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
• Spend our time
doing what
triggers their
purchase
 P, P, P, P
10–24
There are plenty of ways to slice the market.
Use what is relevant in each case.
Geographic Demographic
Variables
Variables
Psychographic
Variables
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10–25
Geographic marketing segmentation eg:
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–26
Demographic Segmentation
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Table 10–1
10–27
Psychographic Segmentation Examples
• Shopping profile
 Big money spender, internet
shopper, pays bills on time,
pays late, loyal one-card
customer
 Sell them your credit card.
• Political Opinion Holders
 Party membership, Magazines
subscribed to, Donations
history
 Solicit donations and votes
from them.
 Tailor the message
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10–28
Current Segmentation & Targeting Techno
• Extensive data
banks are used to
focus on very
narrow segments.
 Link to
“Narrowcasting”
• Minimizes clutter
• Saves money
• What else…..
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–29
Slim Gym’s Customer Segmentation
Analysis
• Geographic
 Where do your customers live?
• Demographic
 Age, ethnicity, earnings, sex, single, etc.
• Psychographic
 Lifestyles & interests
 Attitudes
• Who can we serve profitably?
 Now and into the future
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–30
Market Segmentation Matrix
---------------------Customer Segments to target-------------------Our positioning or strategy
used to approach each
segment:
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10–32
Consumer behavior
• Psychological Influences
• Personal Influences
• Social Influences
• Cultural Influences
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10–33
The Consumer Buying Process
I am sure
gaining weight
now that I
commute daily.
Hey Frank,
How do you
stay in shape?
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
I could:
Keep growing
Buy equipment
Get a closer job
Join a gym
Join Slim Gym,
Today!
Boy, I feel
great!
Figure 10–2
10–34
The buying process with product class
• Convenience goods
 Grab & go
• Shopping goods
 Compare similar brands
• Specialty goods
 Only one specific item will do
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10–35
Organizational Buying Behavior
Industrial, Resale, Government
• Differences in buyers
 Professionals
 Specialists
 Experts in various ways
• Differences in buyer/seller
relationships
 Trust & Long term partner
 Solve problems
 Ease of doing business
 I won’t get fired……
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–36
Organizational Markets & “buy” triggers
Industrial
Market
Reseller
Market
Government and
Institutional Market
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10–37
What shall we do after the research?
• External analysis
 Competition analysis
 Market segmentation
• Internal analysis
 S.W.O.T., and finding our
purpose
• Marketing Strategy
 Mission, objectives,
 Target markets, our positioning
 Product, Price, Place, Promotion
• Align strategies with our
mission
• Identify profitable target
markets
• Position ourselves
Using the marketing mix
 Working out the 4 P’s.
• Financials and controls
 Measurements and control plans
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–38
A Competition Analysis Matrix
Customer
Us
---------------Competitors-------------valued
Slim Gym
Sports
24 hour
Your
attributes
Center
garage
Quality &
Features
S
M
W
Price
W
M
S
Convenience
M
M
S
Performance codes: S=Strong, M=Medium, W=Weak
10–39
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Positioning – Quality vs. price
Expensive and
crummy isn’t
good for
customers.
3)
Where should we
fit in?
Weak
2)
Expensive
Strong
Cheap and good
aren’t feasible
isn’t good for us.
Quality/Features
1)
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Price
Cheap
SC
24
G
10–40
Positioning – Quality vs. Convenience
Strong
Is there room for
a convenience
advantage?
Weak
Weak
2)
Inconvenient and
high quality
would get beat by
SC
Quality/Features
1)
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Convenience
Strong
SC
24
G
10–41
Positioning – Price vs. Convenience
3)
Where should we
be?
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Convenience
Strong
G
Cheap
Expensive and
less than
convenient also
have direct
competitors
Weak
Price
2)
Cheap and
convenient would
go directly
against G
Expensive
1)
24
SC
10–42
Positioning – Quality vs. Convenience
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Convenience
Strong
SC
Strong
Is there room for
a convenience
advantage?
Weak
Weak
2)
Inconvenient and
high quality
would get beat by
SC
Quality
1)
24
G
10–43
Market Segmentation Matrix
---------------------Customer Segments to target-------------------Our positioning or strategy
used to approach each
segment:
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–44
Where the real work is done: The
Marketing Mix, aka: The “Four P’s”
roduct
rice
lace
romotion
(Distribution)
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–45
The Value Package
(think: the whole product that is purchased)
• All the attributes of the relationship that come
with purchase
 Features, benefits, & price sure but also:
 Ease of doing business
 Timely delivery
 Support service
 How important is this stuff in a world of product
parity?
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10–46
Developing New Products
• Idea generation
• Idea screening
• Concept development and
testing
• Business analysis
• Market testing
• Technical implementation
(organizing)
• Commercialization

http://en.wikipedia.org/wiki/Product_development
• REPEAT: When do we start?
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10–48
Products in
the Life Cycle
Stages, Sales,
Cost and Profit
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Figure 10–4
10–50
The Brand as part of the value package
• Branding
 Using symbols to communicate the qualities of a
given product to create loyal consumers
• What does the brand do to the consumer’s
purchasing decision?
• Brand loyalty vs. Price loyalty
 distribution vs. manufacturer branding
 How the internet has changed all this
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–51
Product Offerings: Leveraging the Brand
• Product Line
 A group of similar products, intended for similar buyers,
who will use them in similar ways.
 Hair care products, Floor care products, Car care
products, sandwich spreads, etc.
• Product Mix
 The group of product lines that a company offers for sale.
 All of the above are a firm’s product mix
• Increase product lines to:
 Increase sales, leverage branding
 Decrease focus, dilute branding
 Hey, wait is that good or bad?
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–52
Product Packaging:
Product AND Promotion
• Attracts consumers
• Displays brand name
• Protects contents
• Supplies information
• Communicates features and
benefits
• Provides features and
benefits (e.g. easy pour
spout)
• Environmental implications
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–53
Jump into chapter 12: The other 3 P’s
roduct
rice
lace
romotion
(Distribution)
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–59
A Competition Analysis Matrix
Customer
Us
---------------Competitors-------------valued
Slim Gym
Sports
24 hour
Your
attributes
Center
garage
Quality &
Features
S
M
W
Price
W
M
S
Convenience
M
M
S
Performance codes: S=Strong, M=Medium, W=Weak
10–60
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Positioning – Quality vs. price
Expensive and
crummy isn’t
good for
customers.
3)
Where should we
fit in?
Weak
2)
Expensive
Strong
Cheap and good
aren’t feasible
isn’t good for us.
Quality/Features
1)
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Price
Cheap
SC
24
G
10–61
Positioning – Quality vs. Convenience
Strong
Is there room for
a convenience
advantage?
Weak
Weak
2)
Inconvenient and
high quality
would get beat by
SC
Quality/Features
1)
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Convenience
Strong
SC
24
G
10–62
Positioning – Price vs. Convenience
3)
Where should we
be?
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Convenience
Strong
G
Cheap
Expensive and
less than
convenient also
have direct
competitors
Weak
Price
2)
Cheap and
convenient would
go directly
against G
Expensive
1)
24
SC
10–63
Positioning – Quality vs. Convenience
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
Convenience
Strong
SC
Strong
Is there room for
a convenience
advantage?
Weak
Weak
2)
Inconvenient and
high quality
would get beat by
SC
Quality
1)
24
G
10–64
Market Segmentation Matrix
---------------------Customer Segments to target-------------------Our positioning or strategy
used to approach each
segment:
Copyright © 2005 Prentice Hall, Inc. All rights reserved.
10–65