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Fourth Edition
Copyright 2003 Prentice Hall, Inc.
PART 4 . . . . . . . . . . . . . . . . . . . . . . . .
Understanding Principles of Marketing
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Chapter 10
Understanding Marketing
Processes and ConsumerBehavior
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In our factory, we make
lipstick. In our advertising,
we sell hope.
~Charles RevsonRevlon Cosmetics
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Key Topics
Definition of marketing
The external marketing environment
Segmentation and target marketing
The consumer buying process
Organizational markets and buying behaviorConsumer and industrial products
Branding and packaging
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What Is Marketing?
Planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, and
services to create exchanges that satisfy individualand organizational objectives
Finding a need and filling it!
OR
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The Influence of Marketing
Permeates Everyday Life
Goods
Consumer
Industrial
Services
Ideas Relationship marketingemphasizes lasting
relationships with
customers and suppliers
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Competitive
Environment
Political& Legal
Environment
Social &Cultural
Environment
Economic
Environment
TechnologicalEnvironment
The External Environment
Shapes Marketing Programs
The Firm & It's Marketing Plan
Plans Strategies
Decisions
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Substitute product competition
Brand competition
International competition
The Competitive Environment
Drives Marketing Decisions
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Marketing MixThe Four Ps
(Distribution)
roduct
ricing
romotion
lace
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The Promotional Mix
Advertising
PersonalSelling
SalesPromotions
Public
Relations
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Market Segmentation & Target Marketing
Market Segmentation
Dividing a market into
customer categories
Target Marketing
Selecting a category ofcustomers with similar wantsand needs who are likely torespond to the same products
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Identifying Market Segments
Psychographic
Variables
Geographic
Variables
Demographic
Variables
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Consumer Behavior
Psychological Influences
Personal InfluencesSocial Influences
Cultural Influences
Why do
consumers
purchase and
consume
products?
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PostpurchaseEvaluation
PurchaseDecision
Evaluation ofAlternatives
The Consumer Buying Process
InformationSeeking
ProblemRecognition
Psychological Personal Social Cultural
Personal & Environmental Factors
Product Pricing Promotion Place
Marketing Factors
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Organizational Markets
Industrial
Market
Government &
Institutional Market
Reseller
Market
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Organizational Buying Behavior
Differences in buyers
Professionals
Specialists
Experts
Differences in buyer/seller relationships
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Product Features and Benefits
Features
Tangible and intangible
qualities that a companybuilds into its products
Benefits
The results of using
those products
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Classifying Products
Consumer
Convenience GoodsShopping Goods
Specialty Goods
Industrial
Expense ItemsCapital Items
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Product Offerings
Product Line
A group of similar products, intended for similar
buyers, who will use them in similar ways.
Product Mix
The total group of products that a company offers
for sale.
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Developing New Products
The New Product Development Process
Product Mortality Rates
Strategy of introducing new products to respond
quickly to customer or market changes
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Creating Product Brands
Branding
Using symbols to communicate the qualities
of a given product to create loyal consumers
Types of Brands:
National Brands
Licensed Brands
Private Brands
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The Worlds 10 Most Valuable Brands
1. Coca Cola
2. Microsoft
3. IBM
4. GE
5. Nokia
6. Intel
7. Disney
8. Ford
9. McDonalds
10.AT&T
Source: The Best Global Brands,BusinessWeek, August 6, 2001
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The Future of Top Brands
Gaining Value
Starbucks +32%
Samsung +22%
Financial Times +14%
GE +11%
Guinness +11%
Losing Value
Xerox -38%
Amazon.com -31%
Yahoo! -31%
Duracell -30%
Ford -17%
Source: The Best Global Brands, BusinessWeek, August 6, 2001
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Product Packaging
Attracts consumers
Displays brand name
Protects contentsSupplies information
Communicates features
and benefitsProvides features and
benefits (e.g. easy pourspout)
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The International Marketing Mix
PRODUCTS
PRICING
PROMOTIONDISTRIBUTION
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Small Business and the Marketing Mix
Products
Pricing
Promotion
Distribution
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Chapter Review
Define marketing
Describe the forces of the external marketing
environment
Explain market segmentation and target
marketing
Describe the consumer buying process
Discuss the organizational market categories
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