1. Marketing involves planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges that satisfy objectives. This is known as the "marketing mix." 2. Understanding consumer behavior and how external factors influence consumers is important for developing marketing strategies. Research is conducted to study consumer needs, wants, and decision-making processes. 3. Organizational buying differs from consumer buying in that organizational buyers are professionals who follow a process of problem recognition, information search, evaluation, purchase decision, and post-purchase evaluation when buying goods for business use.

1. CHAPTER 11 Understanding Marketing Processes and Consumer Behavior

2. Outline What Is Marketing? Target Marketing and Market Segmentation Understanding Consumer Behavior Organizational Marketing and Buying Behavior The International Marketing Mix Small Business and the Marketing Mix

3. What Is Marketing? The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives The 4 P’s of Marketing Product, Price, Promotion and Place.

4. Marketing Goods, Services, & Ideas Consumer Goods Products purchased by consumers for personal use Industrial Goods Products purchased by companies to produce other products Services Intangible products, such as time, expertise, or an activity, that can be purchased Relationship Marketing Marketing strategy that emphasizes lasting relationships with customers and suppliers

5. The Marketing Environment External Environment Outside factors that influence marketing programs by posing opportunities or threats Five environmental factors: Political-Legal Environment Social-Cultural Environment Technological Environment Economic Environment Competitive Environment

6. The External Marketing Environment 10 - The Firm and Its Marketing Plan Plans Strategies Decisions Competitive Environment Political & Legal Environment Social & Cultural Environment Economic Environment Technological Environment

7. Competitive Environment Substitute Product Product that is dissimilar to those of competitors but that can fulfill the same need Brand Competition Competitive marketing that appeals to consumer perceptions of similar products International Competition Competitive marketing of domestic products against foreign products

8. Planning & Executing Marketing Strategy Marketing Managers Typically responsible for planning and implementing all the marketing activities that result in the transfer of goods or services to its customers Marketing Plan Detailed and focused strategy for gearing the marketing efforts to meet consumer needs and wants Developing the Marketing Plan Setting Goals for Performance

9. The Marketing Mix Product Good, service, or idea that is marketed to fill consumer needs and wants Product Differentiation Creation of a product or product image that differs enough from existing products to attract consumers The combination of product, pricing, promotion, and distribution strategies used to market products

10. The Marketing Mix Pricing Selecting the most appropriate price at which to sell a product Promotion Techniques for communicating information about products (advertising, personal selling, sales promotions, public relations) Place (Distribution) Getting products from producers to consumers The combination of product, pricing, promotion, and distribution strategies used to market products

11. Target Marketing & Market Segmentation Target Market Group of people that has similar wants and needs and that can be expected to show interest in the same products Market Segmentation Process of dividing a market into categories of customer types

12. Identifying Market Segments Geographic Variables Geographical units that may be considered in developing a segmentation strategy Demographic Variables Characteristics of populations that may be considered in developing a segmentation strategy Psychographic Variables Consumer characteristics, such as lifestyles, opinions, interests, and attitudes Product Use Variables Consumer characteristics based on the ways in which a product is used, the brand loyalty it enjoys, and the reasons for which it is purchased

13. Marketing Research The study of consumer needs and wants and the ways in which sellers can best meet them

14. Market Research and the Marketing Process 10 - Controllable Marketing Variables Product Pricing Promotion Place Environmental Factors Economic Technological Competitive Political & Legal Social & Cultural Marketing Managers Stakeholders MARKETING RESEARCH Consumers Employees Investors Suppliers Local Communities Market Segmentation Target Market Segmentation Marketing Plan Goals for Performance Assessing Information Needs Providing Information Making Decisions

15. The Research Process Study the Current Situation Select a Research Method Collect Data Analyze the Data Prepare a Report Secondary Data Data readily available as a result of previous research Primary Data Data developed through new research

16. Research Methods Observation Market research technique that involves simply watching and recording consumer behavior Survey Market research technique using a questionnaire that is either mailed to individuals or used as the basis of interviews Focus Group Market research technique in which a group of people is gathered, presented with an issue, and asked to discuss it in depth Experimentation Market research technique that attempts to compare the responses of the same or similar people under different circumstances

17. Understanding Consumer Behavior Consumer Behavior Various facets of the decision process by which customers come to purchase and consume products

18. Influences on Consumer Behavior Psychological Personal Social Cultural Brand Loyalty Pattern of regular consumer purchasing based on satisfaction with a product

19. The Consumer Buying Process Personal & Environmental Factors Psychological Personal Social Cultural Stages of the Consumer Buying Process Evaluation of Alternatives Which are comfortable? Which are affordable? How will others react to them? Information Seeking Search for stores, styles, prices, opinions of others Problem Recognition Need to replace old shoes Purchase Decision Choose rationally or emotionally Postpurchase Decision Observe reactions of others; test durability, compare with older shoes Marketing Factors Product Pricing Promotion Place 10 -

20. The Consumer Buying Process Problem/Need Recognition Information Seeking Evaluation of Alternatives Emotional Rational Purchase Decision Postpurchase Evaluations

21. Organizational Marketing & Buying Behavior Organizational (or Commercial) Markets have buying behaviors that are different from those found in consumer markets and are much less observable by the public.

22. Organizational Markets Industrial Market Firms that buy goods that are either converted into products or used during production Reseller Market Intermediaries who buy and resell finished goods Government Market Federal, state, local governments (municipalities, counties, townships, and school districts) Institutional Market Nongovernmental buyers of goods and services (hospitals, churches, museums, and charitable organizations)

23. Organizational Buying Behavior Demand The willingness and ability of buyers to purchase a good or service. The two major Differences in Demand Differences in demand between consumer and industrial products are derived demand and inelasticity of demand Derived Demand Demand for industrial products that results from demand for consumer products Inelastic Demand Demand for industrial products that is not largely affected by price changes

24. Differences in Buyers Unlike most consumers, organizational buyers are professional, specialized, and expert (or at least well informed): Professionals Organizational buyers trained in arranging buyer-seller relationships, negotiating purchase terms, arranging for formal contracts Specialists Industrial buyers are company specialists in a line of items Experts Industrial buyers who are experts about the products they are buying

25. The Industrial Buying Process Stages in the Buying Process Postpurchase Evaluation of product and evaluation of supplier Purchase Decision Information Seeking 10 - Problem Recognition Developing Product Recognition Evaluation of Alternatives using product specification

26. Differences in Decision Making Developing Product Specifications Evaluating Alternatives Making Postpurchase Evaluations Differences in the Buyer-Seller Relationship

27. The International Marketing Mix International Products International Pricing International Promotion International Distribution

28. Small Business and the Marketing Mix Small-Business Products Small-Business Pricing Small-Business Promotion Small-Business Distribution