COM 343 REVIEW MARKETING is… THE FACILITATION OF AN EXCHANGE PROCESS WHERE EACH PARTY BENEFITS. The MARKETING MIX is… THE ELEMENTS OF MARKETING OVER WHICH THE MARKETER HAS CONTROL – PRODUCT PRICE PROMOTION PLACE CHAPTER ONE CONSUMER BEHAVIOUR KEY CONCEPTS The MARKETING CONCEPT Is: A BUSINESS PHILOSOPHY which states that TO BE MORE PROFITABLE (EFFECTIVE) AN ORGANIZATION MUST SATISFY CONSUMER NEEDS AND WANTS. Or CUSTOMER SATISFACTION IS THE BASIS FOR ORGANIZATIONAL SUCCESS 2 IMPLEMENTING THE MARKETING CONCEPT IS A WAY OF DOING BUSINESS TO DO THIS SUCCESSFULLY A BUSINESS MUST… 1. KNOW AND UNDERSTAND CONSUMERS :COMPLETELY 2. SATISFY THEIR NEEDS BY OFFERING HIGH VALUE GOODS / SERVICES 3. DESIGN AND RUN THE ORGANIZATION TO SERVICE CUSTOMER NEEDS 4. EVERY EMPLOYEE, NOT JUST THE MARKETING DEPARTMENT IS RESPONSIBLE FOR CUSTOMER SATISFACTION 3 DEFINING CONSUMER BEHAVIOUR: “THE DYNAMIC INTERACTION OF AFFECT AND COGNITION, BEHAVIOUR AND ENVIRONMENTAL EVENTS BY WHICH HUMAN BEINGS CONDUCT THE EXCHANGE ASPECTS OF THEIR LIVES” AMERICAN MARKETING ASSOCIATION Huh? CONSUMER BEHAVIOUR IS: THE PROCESS OF SELECTION, PURCHASE & DISPOSITION OF GOODS, SERVICES &/OR IDEAS BY PEOPLE IN AN ATTEMPT TO ACHIEVE SATISFACTION. 4 MARKETING STRATEGY… IS A PLAN DESIGNED TO INFLUENCE EXCHANGES (CONSUMER BEHAVIOUR) TO ACHIEVE ORGANIZATIONAL OBJECTIVES. Thru 1. Segmentation based on Demographics Age, Gender, Family Structure, Social Class, Income & Ethnicity Psychographics - Lifestyle Geography 2. Relationship Marketing The process of creating, maintaining & enhancing strong, value-laden relationships with consumers 3. Database Marketing The acquisition and manipulation of consumption related data to enable the customizing of marketing plans to optimize the exchange process. 5 Marketing Strategy & It’s Impact on Consumers MARKETING STRATEGIES & SOCIETAL EFFECTS THE COMBINED CONSUMPTION BEHAVIOUR OF MILLIONS OF CONSUMERS CAN AND DOES CHANGE OUR SOCIETY AND CULTURE. MAKING LIFE A LOT BETTER 6 THE PIZZA BUSINESS REACHED OVER $ 10 BILLION U.S. LAST YEAR! ONE SHARE POINT IN THE SIX BILLION DOLLAR BREAKFAST CEREAL BIZ IS WORTH $60,000,000.00 U.S.! LESS THAN TEN YEARS AGO WHEN ASKED – OVER 75% OF RESPONDENTS IN NORTH AMERICA SAID THAT THE MICROWAVE OVEN WAS THE PRODUCT THAT HAD THE MOST PROFOUND IMPACT ON THEIR LIVES. (FOUND IN OVER 85% OF HOUSEHOLDS) SECOND PLACE? THE VCR THIRD? TELEPHONE ANSWERING MACHINE 7 AND TODAY? Marketing & Culture ‘Pop’ Culture Reflects the social and cultural values acquired by consumers thru the ‘on-going’ exchange relationships (entertainment, recreation, sports & their celebrities) that become intrinsic to their lives. We are what we buy? The Meanings of Consumption Consumption often addresses both functional & emotional needs. Self-concept attachment helps establish user’s identity. Nostalgic attachment – product serves as a link to past self. Interdependence – product is a part of the daily routine. Passion – product elicits strong emotional feelings. The Global Consumer Pop Culture vs. Traditional (Ethnic) Culture Pop Cultural homogenization is a principle by-product of global economic growth. 8 The Virtual Consumer By next year, ‘On-line’ consumption will exceed $ 184 billion (10% of all Retail sales) – $ 4,000 / household! Marketing & Reality: Blurred Boundaries Reality avoidance ~ Addictive behaviour Marketing Ethics & Public Policy Business Ethics The rules of conduct that guide a firms actions in the marketplace, based on societal norms. Ethical Standards of Conduct 1. 2. 3. 4. 5. Disclosure of all substantial risks associated with a product or service. Identification of added features that will increase the cost. Avoidance of false or misleading advertising. Rejection of ‘high-pressure’ or misleading sales tactics. Prohibition of selling or fund raising under the guise of market research (interviews). 9 Needs or Wants? Manipulation? Do marketers create artificial needs? Are advertising & marketing necessary? Public policy & Consumerism The current societal trend is to protect the consumer (voter) from exploitation by business (campaign contributor) 10 The Dark Side Addictive Consumption: The psychological &/or physiological dependency for products or services. (tobacco) Compulsive Consumption: The process of repetitive (often excessive) shopping to relieve tension, anxiety, depression or boredom. Consumed Consumers: People who are used or exploited (willingly or not) for commercial gain in the marketplace. (organs for money) 11 Illegal Activities Consumers: Who’s perfect? 91 % admit to lying regularly! 33 % about their weight 1 in 5 has snuck into a theatre. Consumer theft “Shrinkage”: the loss of money or inventory from shoplifting or employee theft. Anti-consumption: The deliberate defacement or mutilation of a product. Culture Jamming: Defacing advertising materials as a form of ‘political’ expression 12 The Study of Consumer Behaviour Attracts an ever growing number of disciplines and interest groups. Knowledge is power. See Fig. 1-2, pg. 32. Two Perspectives On Research Paradigms A Paradigm is a popular conceptual construct (model) based on either: Positivism: the scientific method based on observable logic. Or Intrepretivism cultural relativism based on subjective perceptions 13 ISSUES OF ETHICAL RESPONSIBILITY QUESTION: “ARE THERE ANY CONSUMER BEHAVIOURS THAT YOU AS A MARKETER, WOULD PERSONALLY FEEL UNCOMFORTABLE IN TRYING TO INFLUENCE?” WHY? / WHY NOT? WHAT COULD / SHOULD YOU DO IN SUCH A CIRCUMSTANCE? 14