Mkt 100 021- week 7 - understanding buyer behaviour

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  • At times the terms ‘markup’ and ‘margin’ are used interchangeably – this is not correctMarkup is based on the COST one purchases a product forMargin is based on the SALES PRICE one sells the product for
  • To get a better idea of the relationship between markup and margin, let’s calculate a few For example, a 50% markup on a cost of $10 would be $5, yielding a retail price of $15. By contrast, the margin on an item that sells at a retail price of $15 and that carries a variable cost of $10 would be $5/$15, or 33%. The table shows some common margin/markup relationships One of the pecularities that can occur in retail is that prices are ‘marked up’ as a percentage of a store’s purchase price (its variable cost for an item) but ‘marked down’ during sales events as a percentage of retail price. Most customers understand that a 50% ‘sale’ means that retail prices have been marked down by 50%.
  • Mkt 100 021- week 7 - understanding buyer behaviour

    1. 1. Welcome to<br />MKT 100-021Week 7– Understanding Buyer behaviour<br />Anthony<br />Francescucci<br />Assistant Professor, Marketing<br />Please ensure all electronic devices are in “silent mode”, “vibrate mode” or “turned off”<br />1<br />
    2. 2. Agenda<br />
    3. 3. Module 4<br />Understanding Buyer Behaviour & Market Research<br />3<br />
    4. 4. Consider this Scenario<br />4<br />
    5. 5. Consumer Buying Decision (CBD) Process<br />5<br />
    6. 6. CBD Process – Habitual Shopping<br />6<br />
    7. 7. Why does CBD change with Habitual purchases?<br />7<br />
    8. 8. CBD Process – Recreational Shopping<br />8<br />
    9. 9. CBD Process – Complex Shopping<br />9<br />
    10. 10. Field of Buyer Behavior<br />Knowledge is Power<br />10<br />
    11. 11. A Model of Consumer Behavior<br />11<br />
    12. 12. What Influences Consumer Behaviour?<br />Cultural Factors<br />Social Factors<br />Personal Factors<br />12<br />
    13. 13. Culture<br />The fundamental determinant of <br />a person’s wants and behaviours<br />acquired through socialization<br />processes with family<br />and other key institutions<br />13<br />
    14. 14. Subcultures<br />Nationalities <br />Religions<br />Racial groups<br />Geographic regions<br />14<br />
    15. 15. Example of cultural differences<br />Differences Between Cultures<br />“A house should be dusted and polished three times a week.”<br />Numbers shown are percentages agreeing with statement<br />15<br />
    16. 16. Numbers shown are percentages agreeing with statement<br />Example of cultural differences<br />Differences Between Cultures<br />“Everyone should use deodorant.”<br />16<br />
    17. 17. MKT100<br />Numbers shown are percentages agreeing with statement<br />Example of cultural differences<br />Differences Between Cultures<br />“My children are the most important thing in my life.”<br />17<br />
    18. 18. Social Factors<br />Reference<br />groups<br />Family<br />Social <br />roles<br />Statuses<br />18<br />
    19. 19. Personal Factors<br />Age<br />Life cycle<br />stage<br />Self-<br />concept<br />Occupation<br />Lifestyle<br />Wealth<br />Values<br />Personality<br />19<br />
    20. 20. Professional or business buying behaviour<br />20<br />
    21. 21. the Business Buying process<br />21<br />
    22. 22. Buying Situation<br />Straight rebuy<br />Modified rebuy<br />New task<br />22<br />
    23. 23. Depends on buying Situation<br />23<br />
    24. 24. Market Research<br />24<br />
    25. 25. The marketing research process<br />Define the problem<br />Collect<br />data<br />Present findings<br />Develop & design research plan<br />Analyze information<br />Make decision<br />25<br />
    26. 26. 1. Define the problem<br />Not too broadly<br />Not too narrowly<br />26<br />
    27. 27. Research Objectives to address problem<br />27<br />
    28. 28. 2. Developing the research Plan<br />28<br />
    29. 29. 2. Develop the research plan<br />Data sources<br />29<br />
    30. 30. 2. Develop the research plan<br />Type of Research<br />30<br />
    31. 31. 2. Develop the research plan<br />Type of Research<br />31<br />Descriptive Research<br />
    32. 32. 2. Develop the research plan<br />Research approaches<br />32<br />
    33. 33. Research instruments<br />2. Develop the research plan<br />33<br />
    34. 34. Qualitative research<br />
    35. 35. Quantitative Research<br />
    36. 36. 2. Develop the research plan<br />Sampling Plan<br />36<br />
    37. 37. 2. Develop the research plan<br />Contact Methods<br />37<br />
    38. 38. On-line research<br />38<br />
    39. 39. 3. Information collection is;<br />39<br />
    40. 40. 4. Analyze the information<br />5. Present the findings<br />6. Make the decision<br />40<br />
    41. 41. Any Questions<br />41<br />
    42. 42. Metric 5:Markup & Margin<br />42<br />
    43. 43. Mark-up versus Margin<br />43<br />
    44. 44. Margins and mark-ups<br />44<br />Price<br />$15<br />Cost<br />$10<br />Margin $<br />Mark-up $<br />$5<br />Margin %<br />33.3%<br />100<br />
    45. 45. Margins and mark-ups<br />45<br />Price<br />$15<br />Cost<br />$10<br />Margin $<br />Mark-up $<br />$5<br />Mark-up %<br />50.0%<br />100<br />
    46. 46. Markup or Margin?<br />46<br />
    47. 47. Relationship between Margins & Markups<br />47<br />
    48. 48. Example – Part 1<br />48<br /> You are a manufacturer of widgets. Your cost to manufacture and package your widget is $10/unit. You decide to sell the product to your wholesaler for $19/unit. You have marked-up the product $9, which will cover your operating expenses and provide for a nice profit.<br />Cost = $10<br />Markup $ / Margin $= $9<br />Price = Wholesale Cost = Cost + Markup = $10 + $9 = $19<br />Markup (%) =<br />Markup $ / Cost * 100% =<br />$9 / $10 = 90%<br />Margin (%) =<br />Margin $ / Price * 100% =<br />$9 / $19 = 47.4%<br />
    49. 49. Example – Part 2<br />49<br />Let’s continue: you find a distributor willing to carry and move your product for a 25% margin. <br />Wholesale Cost = $19<br />Wholesale Margin (%) = 25%<br />Cost = Price x (1- Margin %)<br />Wholesale Price =<br />= Wholesale Cost / (100% - Wholesale Margin)<br />= $19 / (100% - 25%) = $25.33<br />Wholesale Markup =<br />Wholesale Price - Wholesale Cost<br />= $25.33 - $19 = $6.33<br />Wholesale Markup (%)=<br />Wholesale Markup / Wholesale Cost*100%<br />= $6.33 / $19 * 100% = 33.3% <br />
    50. 50. Example – Part 3<br /> Finally, the wholesaler is able to sell the product to the retailer. In this industry, it is standard for products of this type to be marked-up by the retailer 50%.<br />Retailer Cost = $25.33<br />Retail Markup (%) = 50%<br />Retail Markup =<br />Retailer Cost * Retail Markup (%) <br />= $25.33 * 50% = $12.67<br />Retail Price =<br />Retailer Cost + Retail Markup <br />= $25.33 + 12.67 = $38<br />Retail Margin (%) =<br />Retail Markup / Retail Price<br />= $12.67 / $38 = 33.3%<br />50<br />
    51. 51. Let’s complete the worksheet<br />51<br />
    52. 52. Before you leave today<br />Hand In:<br />52<br />
    53. 53. See you next Week<br />53<br />

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