Chapter 5 Decision Making
1. Identify the need
- Something “missing” or desire for something better
- Functional or psychological
2. Search for Options
- Internal or external
- Extensive or limited
3. Evaluate Options
- Criteria for evaluation will differ for everyone
- Can differ cased on the situation
4. Make Decision
5. Post-Decision Analysis
- Was this the right decision
Identifying the Need
- A sense of dissatisfaction or something mission
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Needs can be Functional or Psychological
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Maslow’s Hierarchy of Needs
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Search for options:
o Internal: seeking possible options to fulfill needs based on existing information and
knowledge
o External: utilizing additional sources – Human, text, online – to gain information about
different options
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Search Factors:
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Evaluating options:
o Familiarity: we search most when we are somewhat familiar and least when we are familiar
or completely unfamiliar
o Heuristics: simplifying the decision by making process/shortcuts employed by consumers.
These shortcuts allow marketers to impact the decision
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Choosing an Option: the goal of the decision-making process
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Evaluate the decision
o Evaluating whether or not it was the right one
o Not only impacts the satisfaction of the need, but can call into doubt or reaffirm our
decision-making ability in general
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Categorize decisions by frequency
o Habitual or routine
o Infrequent
o Rare
Heuristics:
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Categorize decisions by level of involvement
o How important a particular decision is to a consumer
Situational Factors that Drive Decision Making:
1. Temporal State
- “temporal” refers to “time”
- Based on the time of day/mindset when shopping
2. Purchase State
- Not all shopping experiences are the same
- Comfortable vs confused
3. Shopping Situation
- The nature of the retail space can have an impact on decision making
4. Antecedent State
- The condition we are in before we begin the decision-making process
5. Social Factors
- Social factors play a role in our decisions if we are with a group
Types of Consumers
Internal Factors:
1. Personality
2. Motivation
3. Values
4. Beliefs
5. Lifestyle
6. Perception
7. Attitude
- Cognitive
- Affective
- Behavioural
External Factors:
1. Culture
2. Reference groups and opinion leaders
3. Family life stage
Chapter 6 Business-to-Business Marketing
Components of Business Buying Market
1. Business-to-Consumer (B2C)
- Marketing that involves organizations targeting individuals with their marketing efforts
2. Consumer-to-Consumer (C2C)
- Marketing that involves individual consumers interacting with one another as vendors and
buyers
3. Business-to-Business (B2B)
- Marketing product and services to large institutions and organizations rather than individual
consumers and households
4 types of Business Buyers:
Characteristics of business products:
1. Size of buy
2. Frequency of buy
3. After-sales service
4. Timelines
5. Vender restrictions
a. Exclusivity
b. Confidentiality
c. Ethical Restrictions
d. Reciprocity
Characteristics of Business Products:
Key Players in the Business Decision-Making Process:
1. User/consumer
2. Initiator
3. Buyers
4. Influencers
5. Gatekeepers
6. Decider/approver
7. Other divisions/location
8. Additional interested parties
a. Shareholders
b. Activist groups
c. Industry bodies
Business Purchase Decision-Making Process
Characteristics of Need
- Derived Demand: the demand for most business or organizational buying is driven not by what
the organization itself consumers, but what the end consumers or clients of the organization
consume
Characteristics of Search
1. Internal Search
- Tapping into the global knowledge and existing supply vendors of other divisions or geographic
offices
2. External Search
- Many of the same characteristics of a consumer search, but certain criteria may guide the
external search, including recommendations from existing suppliers, guidance from consultants,
and available industry sources
Criteria for Evaluation
Similar to Consumer buying decisions
Unique to Business buying decisions
Components of Decision Making
Unique dynamics to the business buying process:
1. Responsibility
2. Authority
3. Accountability
4. Alignment/Verification
Business Buy Post-Decision Analysis
Components of B2B and Consumer Marketing Communications that are similar:
1. Business brands may also be consumer brands
2. Television, radio, out of home
3. Online search engine
4. Business social media
5. Direct-response marketing
Components of B2B and Consumer Marketing Communications that are different:
1. Trade Shows
2. Trade Journals
3. Sales Calls
4. Cold Calls/Emails
5. Industry Events
Chapter 7 Segmentation, Targeting, and Position
Geographic Segmentation:
1. Segmentation: the proves and criteria whereby marketers divide up the world’s consumers into
discrete, definable, identifiable groups
2. Geographic Segmentation: grouping consumers based on where they live
Examples of Segmentation by Geographic Distinction:
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Geographic is the least utilized method because of limited number of situations where
geographic location is the defining characteristic of the consumer need
Generally defines categories (e.g., winter clothing) more frequently than specific products or
brands
Demographic Segmentation:
- Grouping consumers based on the facts and statistical measures of their lives
- Most commonly used segmentation
o Data is available
o Measures are empirical (hard facts and numbers)
Key Demographic Measures and Applications
Characteristics of Psychographic Segmentation
- Grouping consumers based on similar attitudes, beliefs, lifestyle, and values
Comparing Demographics and Psychographics
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Psychographics are useful in a variety of product areas
Behavioural Segmentation
- Grouping consumers by how they act, how they engage with the product, and how they utilize
the product
Targeting Segments
Good Target Segments:
1. Distinct and Divisible
2. Reachable (media and distribution)
3. Considerable (size, profit, potential)
4. Approachable
a. Brands, products, or services to which consumers have low levels of loyalty of
commitment
b. New consumers who are entering the segment
c. Consumers who might be concerned or unhappy with their current choices
Uses and Value of Targeting
- Targeting tells us who to go after right now, but also who to avoid, who has future potential,
and who is a threat because of competitive appeal
1. Identifying the least desirable segments
2. Identifying potential or future target segments
3. Identifying segments where your competition might have more appeal or an advantage
Marketing Strategies for Large Targets
1. Mass Marketing:
- Treating the consumer target segment or segments as relatively uniform, using one marketing
message, one product or product format, and no customization
2. Differentiated Marketing:
- Multiple segments that provide enough suitable and significant target opportunities to justify
developing several very distinct marketing activity plans
Differentiated Marketing for the Hospitality Category:
Marketing Strategies for Smaller Targets
1. Niche or Specialty Marketing:
- Focuses on best serving the needs of one very specifically defined segment
2. Micro Marketing:
- Attempts to focus on as small and cohesive a segment as it can, right down to an individual
consumer or a very small geographic cluster
Positioning
Positioning Map:
- Used to chart, identify, and locate where different products, brands, or concepts exist relative to
one another, in the minds of consumers, based on certain criteria defined by the marketer
Example:
-
The criteria are considered the most critical by the marketers based on their knowledge of the
consumer
Position on the map is based on research indicating consumer perceptions of these criteria
How Positioning Maps are Used:
1. They identify how consumers are impacted by our marketing efforts
2. They tell us how our consumers see our competition
3. They can identify areas of opportunity
4. They can identify areas to avoid
5. We could also learn which quadrants are the most popular with consumers
6. Multiple maps may be developed to get a fuller understanding of the consumers’ perspectives
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-
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There are no predefined positioning strategies – they are specific to what is suitable for the
marketer’s objectives
Marketers define “suitable” as a critical factor for why a consumer would choose one product in
a category over another
Examples of potential mapping criteria by category:
Special warning about the use of “price” and “quality” as positioning axes
o These are often the most widely used and considered (and seemingly obvious and
important) criteria however:
1. Price is not the same as value
2. Price is sometimes not the issue
3. Quality is a subjective and vague term
Repositioning: a conscious effort to modify the perception or position of a product, brand, or
service in order to take advantage of a different market opportunity
Chapter 8 Product and Branding
Types of things that qualify as marketing “products”
1. Physical
2. Service
3. People
4. Place
5. Organization
6. Experience
7. Event
8. Idea
9. Cause
How Physical Products and Services Differ:
Properties of a Product:
1. Core Benefit: aspect of the product that motivates us to explore the category; the problem the
product solves
2. Actual Product: The complete set of features and components that a consumer is likely to
directly interact with, and that define the product offering
3. Extended Product: Something that must be purchased or utilized with the product, but that is
not part of the core benefit
Different Categories of Products
- Products in marketing can be identified by how they are categorized by consumer experience:
1. Convenience products
- E.g. toothpaste, toilet paper, etc.
2. Shopping products
- Items we might do a little research before buying, as we may have budgets related
- E.g., computer mouse, China, etc.
3. Select products
- Bigger, more risk involved, may include long-term financial investment
- E.g., house, car, computer, etc.
4. Unsought products
- E.g., life insurance, burial services, etc.
Product Mix
- The choice of which varieties of products to offer and market
- Product line: the collection of different products in the same category offered by an
organization
Product Line Depth:
- Products offered by one company in similar and related categories; the multiple offerings in any
one category:
1. Changing consumer dynamics
2. Category and brand opportunities
3. Increased segmentation
4. Competitive response
5. Success in other markets
6. Acquisition or merger
Product Line Breadth:
- Distinguishing between depth and breadth:
1. Line delivers different category benefit
2. Lines are non-complementary
3. Number of items in the line
4. Number of product lines marketed
5. Industry definitions
6. Nature of competition
7. Distinctness of brands
8. Channel distinction
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Product Line Management:
Product lines are not static and require constant oversight, management, and attention
1. Product Line Substitution:
- Rotation or replacing an underperforming or unfavourable product with another that is
more suitable and potentially more popular
2. Product Line Expansion:
- Adding new selections to a product line
- Growing its total number of offerings
3. Product Line Contraction:
- Reducing the total number of offerings by eliminating some products
4. Product Line Cannibalization
- The extent to which sales and consumers of newly added products come from sales and
consumers of previous products
Brand Management
1. Brand
- A form of identity for a product, service, organization, or even an individual
- The reputation, notoriety, or point of distinction
2. Brand Management
- Providing responsibility for development, promotion, growth, modification, or
refurbishment of a brand to an individual or group
3. Brand Director
- A mid- to senior-level manager called upon to oversee an entire category and possibly
manage individual brand managers within the category
4. Brand Strategy
- A formal plan that determines what the brand stands for, how it will be used, and how to
manage the brand effectively to help accomplish the organization’s marketing goals
Origins and Growth of Branding
1. Brands originated as a means of identification
2. With expansion and distribution, brand came to also encompass reputation and points of
distinction
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Marketers not only have many distinct brands, but they may also have brands that are related in
some way:
1. Brand Hierarchy
- The determination of how to use the corporate brand and various product brands
together to develop a clear, standard message to consumers
2. Corporate Brand
- The organization’s name as the primary brand
3. Product Brand
- Selected Exclusively for a particular product line the organization markets
4. Sub-brands
- A subordinate variant of a larger brand
Brand Plan
Aspects of a brand plan:
• Product
• Which brands apply to which products?
• What new products or product improvements should be introduced?
• Place
• Which points of distribution “fit” the brand?
• How can we use the retail environment (including online) to support the brand?
• Positioning
• What does the brand “stand for”?
• How can we leverage the brand’s positioning to achieve marketing objectives?
• Promotion
• Which brands should we promote? How can we build the brand through
promotion?
• What brand associations are optimal?
• Price
• How does the price point support the brand?
• How can we leverage the brand to charge the maximum price?
Brands play a strong role in Promotional Activities:
Value that Brands Provide:
1. Identify
2. Promote Loyalty
3. Lower Marketing Costs
4. Help global or other geographic expansion
5. Connect with Consumers
6. Offer Competitive Advantage
7. Raise the cost of entry
8. Support new products
9. Create profitability
10. Provide another layer of legal protection
11. Create a source of revenue (licensing)
12. Can become an actual financial asset
Financial Value of a Brand
1. Brands as financial asset
2. Brands as equity
3. Associations
4. Identity
5. Image
6. Increased consumer loyalty
7. Intellectual property
8. Reduce marketing costs
9. Ease of new product introduction
10. Profit margins
11. Customer and distribution benefits
12. Manufacturing efficiencies
Brands can be categorized in two areas:
1. Protecting usefulness
- Brands are valuable tools for organizations if they are manager effectively
- Things that can impact a brand’s usefulness are:
o Confusion about what the brand stands for
o Confusion with other brands
o Problems with associations
o Misuse or misrepresentation of the brand
o Failure to support the brand
o Changing tastes and catastrophic events
2. Legal protection and ownership
- Brands must be protected from theft and ownership established:
o Registering the brand name
 Not all brands can be legally protected this way
 Brands must identify where they seek protection
 Legal protection is not necessarily worldwide
o Piracy
o Imitation
o Categorization