BUS 121 — Marketing Process and Consumer Behavior

Value
Is the relative comparison of a products benefits versus its cost.

Value = Benefits / Cost

Utility
is the ability of a product to satisfy a human want or need
4 Types of Utility
Form Utility
Time Utility
Place Utility
Possession Utility
Form Utility
Marketing has a voice in designing products with features that customers want
Time Utility
Marketing creates a utility by providing products when customers will want them.
Place Utility
Marketing creates a place utility by providing products where customers will want them
Possession Utility
Marketing creates a possession utility by transferring product ownership to customers by setting selling prices, setting terms for customer credit payments, and providing ownership documents
Consumer Goods
Physical products purchased by consumers for personal use
Industrial Goods
Physical products purchased by companies to produce other products
Services
Products having nonphysical features, such as information, expertise, or an activity that can be purchased.
Relationship Marketing
Marketing strategy that emphasizes building lasting relationships with customers and suppliers
Customer Relation Management (CRM)
Organized methods that a firm use to build better information connections with clients, so that stronger company-client relationships are developed
Marketing Environment
Political-Legal Environment
Sociocultural Environment
Technological Environment
Economic Environment
Competitive Environment
3 Types of Competitive Environments
Substitute Products
Brand Competition
International Competition
Substitute Product
Product that is dissimilar from those of competitors but that can fulfill same need
Brand Competition
Competitive marketing that appeals to consumer perceptions of benefits of products offered by particular companies.
International Competition
Competitive marketing of domestic products against foreign products
Marketing Managers
Managers who plans and implements the marketing activities that result in the transfer
Marketing Plan
Detailed strategy for focusing marketing efforts on consumer’s needs and wants
Marketing Mix
Combination of product pricing, promotion, and place (distribution) strategies used to market products
Product
Good, service, or idea that is marketed to fill consumers’ needs and wants
Product Differentiation
Creation of a product feature or product image that differs enough from existing products to attract customers
Pricing
Process of determining the best price at which to sell a product
Place (Distribution)
Part of the marketing mix concerned with getting products from producers to consumers
Promotion
Aspect of the marketing mix concerned with the most effective techniques for communicating information about products
Integrated Marketing Strategy
Strategy that blends together the Four Ps of marketing to ensure their compatibility with one another and with the company’s non-marketing activities as well
4 Ps of Marketing
Product Differentiation
Pricing
Place (Distribution)
Promotion
Target Market
Segment or group of people who have similar wants and needs and can be expected to show interest in the same products
Market Segmentation
Process of dividing a market into categories of customer types
Product Positioning
Process of fixing, adapting, and communication the nature of a product
Geographic Variables
Geographic units that may be considered in developing segmentation strategy
Demographic Variables
Characteristics of populations that may be considered in developing a segmentation strategy

Age
Education
Family Life Cycle
Family Size
Income
Nationality
Race
Religion
Sex

Geo-Demographic Variable S
combination of geographic and demographic traits used in developing a segmentation strategy
Psychographic Variables
Consumer characteristics, such as lifestyles, opinions, interests, and attitudes that may be considered in developing a segmentation strategy.
Consumer Behavior
Study of the decision process by which people buy and consume products

Psychological
Personal Influences
Social Influences
Cultural Influences

Brand Loyalty
Pattern of regular consumer purchasing based on satisfaction with a product performance
Behavioral Variables
Behavioral patterns displayed by groups of consumers and that are used in developing a segmentation strategy
Problem Recognition
This process begins when the consumer recognizes a problem or need.
Need Recognition
occurs when you have a chance to change your buying habits.
Information Seeking
Having recognized a need consumers often seek information.
Evoked Set
or
Consideration Set
Group of products consumers will consider buying as a result of information searched
Evaluation of Alternatives
Alternatives to your product that meet same needs.
Purchase Decision
Decisions are based on rational motives, emotional motives or both
Rational Motives
Reasons for purchasing a product that are based on logical evaluation of product attributes
Emotional Motives
Reasons for purchasing a product that are based on nonobjective factors
Post purchase Evaluation
Marketing does not stop with the sale of a product. Marketers want to customers to be happy after purchasing products.
Industrial Market
Organizational market consisting of firms that buy goods that are either converted into products or used during production
Reseller Market
Organizational market consisting of intermediaries that buy and resell finished goods.
Institutional Market
Organizational market consisting of such nongovernmental buyers of goods and services as hospitals, churches, museums, and charitable organizations
Product Features
Tangible and intangible qualities that a company builds into its products
Value Package
Product marketed as a bundle of value-adding attributes, including reasonable cost

Easy access to understandable information
Features
Attractive
Useful Software
Pricing
Simple Ordering
Secure Ordering
Assurance of speedy delivery
Warranties
Easy access to technical support

Convenience Good
or
Convenience Service
Inexpensive good or service purchased and consumed rapidly and regularly
Shopping good
or
Shopping Services
Moderately expensive infrequently purchased good or service
Specialty Good
or
Specialty Service
Expensive rarely purchased good or service
Production Item
Industrial products purchased and used directly in the production process that creates other goods or services
Expense Item
Industrial product purchased and consumed within a year by firms producing other products
Capital Item
Expensive long lasting infrequently purchased industrial product, such as a building, or industrial service, such as a long-term agreement for data warehousing services
Product Mix
Group of products that a firm makes available for sale
Product Line
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
Speed to Market
Strategy of introducing new products to respond quickly to consumer or market changes
Product Life Cycle (PLC)
Series of stages in a product’s commercial life
Stages of PLD
Introduction
Growth
Maturity
Decline
Branding
Process of using symbols to communicate the qualities of a product made by a particular producer
Brand Awareness
Extent to which a brand name comes to mind when a consumer considers a particular product category
Product Placement
A promotional tactic for brand exposure in which characters in television, film, music, magazines, or video games use a real product with its brand visible to viewers.
Buzz Marketing
Promotional method that relies on word of mouth to create buzz about product and ideas
Viral Marketing
Type of buzz marketing that relies on the Internet to spread information like a “virus” from person to person about products and ideas
Corporate Blogs
Comments and opinions published on the web by or for an organization to promote its activities
National Brand
Brand-name product produced by, widely distributed by, and carrying the name of a manufacturer
Brand Extension
A company’s use of a national brand on several additional related products
Licensed Brand
Brand-name product for whose name the seller has purchased the right from an organization or individual
Private Brand (Private Label)
Brand-name product that a wholesaler or retailer has commissioned from a manufacturer
Packaging
Physical container in which a product is sole, advertised, or protected