Chapter 11 Marketing Processes and Consumer Behavior

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chapter

Business Essentials, 7th EditionEbert/Griffin

© 2009 Pearson Education, Inc.

Marketing Processes and Consumer Behavior

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PowerPoint Presentation prepared by Carol Vollmer Pope Alverno College

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© 2009 Pearson Education, Inc. 2

After reading this chapter, you should be able to:1. Explain the concept of marketing and identify the five forces

that constitute the external marketing environment.2. Explain the purpose of a marketing plan and identify the

four components of the marketing mix.3. Explain market segmentation and how it is used in target

marketing.4. Describe the key factors that influence the consumer buying

process.5. Discuss the three categories of organizational markets.

L E A R N I N G O B J E C T I V E SL E A R N I N G O B J E C T I V E S


After reading this chapter, you should be able to:6. Explain the definition of a product as a value package

and classify goods and services.

7. Describe the key considerations in the new product development process.

8. Explain the importance of branding and packaging.

9. Discuss the challenges that arise in adopting an international marketing mix.

10. Identify the ways that small businesses can benefit from an understanding of the marketing mix.

L E A R N I N G O B J E C T I V E S (cont’d)L E A R N I N G O B J E C T I V E S (cont’d)


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


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

• Providing Value and Satisfaction– Consumers buy products that offer the best value

when it comes to meeting their needs and wants


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.

• Value and Utility– Form utility– Time utility– Place utility– Ownership utility


http://www.tappedthemovie.com/


• Goods, Services, and Ideas– Consumer goods: Tangible goods that consumers may buy

for personal use• Consumer marketing

– Industrial goods: Physical items used by companies to produce other products

• Industrial marketing– Services: Products with intangible (nonphysical) features

• Service marketing

• Relationship Marketing– Emphasizes building lasting relationships with customers

and suppliers



• Data Warehousing and Data Mining for Building Customer Relationships– 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



• The Marketing Environment– Political-legal environment

– Sociocultural environment

– Technological environment

– Economic environment

– Competitive environment• Substitute products

• Brand competition

• International competition


What Is Marketing? (cont’d)• Strategy: The Marketing Mix

– Marketing Plan• A detailed strategy for focusing marketing efforts on

consumer needs and wants– Marketing Mix

• Product– Differentiating a product

• Pricing – Selecting the best price at which to sell a product

• Place– Distributing a product through the proper channels

• Promotion– Communicating information about a product


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

• Market Segmentation– Dividing a market into categories of customer

types or “segments”• Geographic• Demographic• Psychographic


TABLE 11.1 Demographic Variables


Understanding Consumer Behavior

• Influences on Consumer Behavior– Psychological influences– Personal influences– Social influences– Cultural influences

• Brand Loyalty– Consumers who regularly purchase products

because they are satisfied with their performance


FIGURE 11.1 The Consumer Buying Process

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


Organizational Marketing and Buying Behavior

• Organizational Markets– Industrial Markets

• Businesses that buy goods to be converted into other products or that are used up during production

– Reseller Markets• Intermediaries, including wholesalers and retailers,

that buy and resell finished goods– Government and Institutional Markets

• Federal and state governments• Nongovernmental organizations


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

– Differences in the Buyer-Seller Relationship• Frequent purchases• Enduring long-term relationships• Buyers and sellers may work closely• Emphasis is on personal selling


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


TABLE 11.2 Categories of Consumer Products


TABLE 11.3 Industrial Products


The Product Mix• Product Mix

– The group of products (consumer, industrial, or both) that a company makes available for sale

• 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

• 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


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


FIGURE 11.2 Products in the Life Cycle: Stages, Sales, Cost and Profit


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

– Brand loyalty• Consumer preference for a particular product

– Brand awareness• The brand name that comes first to mind when

consumers consider a particular product category


Identifying Products (cont’d)

• Gaining Brand Awareness– 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

– Buzz marketing• A form of word-of-mouth marketing

– Viral marketing• Relying on word-of-mouth and the Internet to spread

information like a “virus” from person-to-person about products and ideas



• Types of Brand Names– National brands

• Products that are produced by, widely distributed by, and carry the name of the manufacturer

– Licensed brands• Companies (and even personalities) license (sell the rights

to) other companies to put their names on products

– Private (or private label) brands• Carry the brand name that a wholesaler or retailer

develops and has a manufacturer put it on a product



• Packaging Products– Purposes of packaging

• Reduce the risk of damage, breakage, or spoilage

• Increase the difficulty of stealing small products

• Serves as an in-store advertisement that makes the product attractive

• Displays the brand name

• Identifies features and benefits

• Enhances the utility of the product features and benefits


The International Marketing Mix• International Products

– Need to adapt product to foreign markets

• International Pricing– Higher transportation and selling costs abroad

• International Distribution– Distribution network access in foreign markets

• International Promotion– Cultural sensitivity requires adjustments to the

marketing mix


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

• Small-Business Distribution– Poor location choice fails to attract customers

• Small-Business Promotion– Careful promotion can reduce expenses


Key Terms

brand awarenessbrand competitionbrand loyaltybrandingcapital itemconsumer behaviorconsumer goodsconvenience good/convenience

servicedemographic variablesdistributionemotional motivesexpense itemgeographic variables

industrial goodsindustrial marketinstitutional marketinternational competitionlicensed brandmarket segmentationmarketingmarketing managermarketing mixmarketing plannational brandpackagingprivate brand (or private label)product


Key Terms (cont’d)

product differentiationproduct featureproduct life cycle (PLC)product lineproduct mixproduct placementpsychographic variablesrational motivesrelationship marketingreseller marketservicesshopping good/shopping servicespecialty good/specialty service

speed to marketsubstitute producttarget marketutilityvaluevalue packageviral marketing


Chapter 11 Marketing Processes and Consumer Behavior

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