Materi Kuliah POM minggu 1-6

Chapter 3

Analyzing the Marketing Environment

Topic Outline

•          The Company’s Microenvironment

•          The Company’s Macroenvironemnt

•          Responding to the Marketing Environment

The Marketing Environment

The marketing environment includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with customers

Microenvironment consists of the actors close to the company that affect its ability to serve its customers, the company, suppliers, marketing intermediaries, customer markets, competitors, and publics

The Company’s Microenvironment

Actors in the Microenvironment

The Company

•          Top management

•          Finance

•          R&D

•          Purchasing

•          Operations

•          Accounting

Suppliers

•          Provide the resources to produce goods and services

•          Treated as partners to provide customer value

Marketing Intermediaries

Help the company to promote, sell and distribute its products to final buyers

Types of Marketing Intermediaries

Reseller ,Physical distribution, Marketing services agencies, Financial Intermedience

Competitors

Firms must gain strategic advantage by positioning their offerings against competitors’ offerings

Publics

Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives

–         Financial publics

–         Media publics

–         Government publics

–         Citizen-action publics

–         Local publics

–         General public

–         Internal publics

The Company’s Macroenvironment

Demographic Environment

Demography is the study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics

•          Demographic environment is important because it involves people, and people make up markets

•          Demographic trends include age, family structure, geographic population shifts, educational characteristics, and population diversity

•          Changing age structure of the population

–         Baby boomers include people born between 1946 and 1964

–         Most affluent Americans

•          Generation X includes people born between 1965 and 1976

o    High parental divorce rates

o    Cautious economic outlook

o    Less materialistic

o    Family comes first

o    Lag behind on retirement savings

•          Millennials (gen Y or echo boomers) include those born between 1977 and 2000

–         Comfortable with technology

–         Includes

•          Tweens (ages 8–12)

•          Teens (13–19)

•          Young adults (20’s)

Generational marketing is important in segmenting people by lifestyle of life state instead of age

More people are:

•          Divorcing or separating

•          Choosing not to marry

•          Choosing to marry later

•          Marrying without intending to have children

•          Increased number of working women

•          Stay-at-home dads

Growth in U.S. West and South and decline in Midwest and Northeast

Moving from rural to metropolitan areas

Changes in where people work

•          Telecommuting

•          Home office

•          Divorcing or separating

Changes in the Workforce

•          More educated

•          More white collar

Demographic Environment

Increased Diversity

Markets are becoming more diverse

–         International

–         National

•          Includes:

–         Ethnicity

–         Gay and lesbian

–         Disabled

Economic Environment

Economic environment consists of factors that affect consumer purchasing power and spending patterns

•          Industrial economies are richer markets

•          Subsistence economies consume most of their own agriculture and industrial output

•          Changes in income

•          Value marketing involves ways to offer financially cautious buyers greater value—the right combination of quality and service at a fair price

Changes in Consumer Spending Patterns

•          Ernst Engel—Engel’s Law

•          As income rises:

–         The percentage spent on food declines

–         The percentage spent on housing remains constant

The percentage spent on savings increases

Natural environment involves the natural resources that are needed as inputs by marketers or that are affected by marketing activities

•          Trends

–         Shortages of raw materials

–         Increased pollution

–         Increase government intervention

–         Environmentally sustainable strategies

Technological Environment

•          Most dramatic force in changing the marketplace

•          Creates new products and opportunities

•          Safety of new product always a concern

Political environment consists of laws, government agencies, and pressure groups that influence or limit various organizations and individuals in a given society

•          Legislation regulating business

–         Increased legislation

–         Changing government agency enforcement

•          Increased emphasis on ethics

–         Socially responsible behavior

–         Cause-related marketing

Cultural environment consists of institutions and other forces that affect a society’s basic values, perceptions, and behaviors

Persistence of Cultural Values

Core beliefs and values are persistent and are passed on from parents to children and are reinforced by schools, churches, businesses, and government

Secondary beliefs and values are more open to change and include people’s views of themselves, others, organization, society, nature, and the universe

Shifts in Secondary Cultural Values

•          People’s view of themselves

–         Yankelovich Monitor’s consumer segments:

•          Do-it-yourselfers—recent movers

•          Adventurers

•          People’s view of others

–         More “cocooning”

•          People’s view of organizations

•          People’s view of society

–         Patriots defend it

–         Reformers want to change it

–         Malcontents want to leave it

•          People’s view of nature

–         Some feel ruled by it

–         Some feel in harmony with it

–         Some seek to master it

•          People’s view of the universe

–         Renewed interest in spirituality

Responding to the Marketing Environment

Views on Responding

•          Uncontrollable : React and adapt to forces in the environment

•          Proactive : Aggressive actions to affect forces in the environment

•          Reactive : Watching and reacting to forces in the environment

Chapter 4

Managing Marketing Information to Gain Customer Insights

Learning Objectives

Topic Outline

•          Assessing Marketing Information Needs

•          Developing Marketing Information

•          Marketing Research

•          Analyzing Marketing Information

•          Distributing and Using Marketing Information

•          Other Marketing Information Considerations

Marketing Information and Customer Insights

Customer Insights are:

•          Fresh and deep insights into customers needs and wants

•          Difficult to obtain

–         Not obvious

–         Customer’s unsure of their behavior

•          Not derived from more information but better information and more effective use of existing information

•          Companies are forming customer insights teams

–         Include all company functional areas

–         Use insights to create more value for their customers

–         Customer controlled could be a problem

Marketing Information Systems (MIS)

Marketing information system (MIS) consists of people and procedures for:

–         Assessing the information needs

–         Developing needed information

–         Helping decision makers use the information for customer

Assessing Marketing Information Needs

MIS provides information to the company’s marketing and other managers and external partners such as suppliers, resellers, and marketing service agencies

Characteristics of a Good MIS

Balancing what the information users would like to have against what they need and what is feasible to offer            

Developing Marketing Information

Marketers obtain information from

Internal Data : Internal databases are electronic collections of consumer and market information obtained from data sources within the company network

Marketing intelligence is the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketplace

Marketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization

Marketing Research Defining the Problem and Research Objectives

•          Exploratory research

•          Descriptive research

•          Causal research

Marketing Research Developing the Research Plan

•          Outlines sources of existing data

•          Spells out the specific research approaches, contact methods, sampling plans, and instruments to gather data

Marketing Research Written Research Plan Includes:

Marketing Research Developing the Research Plan

Secondary data consist of information that already exists somewhere, having been collected for another purpose

Primary data consist of information gathered for the special research plan

Marketing Research

•          Planning Primary Data Collection

•          Research approaches

•          Contact methods

•          Sampling  plan

•          Research instruments

Market Research Research Approaches

Observational research involves gathering primary data by observing relevant people, actions, and situations

Ethnographic research involves sending trained observers to watch and interact with consumers in their natural environment

Survey research is the most widely used method and is best for descriptive information—knowledge, attitudes, preferences, and buying behavior

•          Flexible

•          People can be unable or unwilling to answer

•          Gives misleading or pleasing answers

•          Privacy concerns

Experimental research is best for gathering causal information—cause-and-effect relationships

Marketing Research Contact Methods

•          Focus Groups

–         Six to 10 people with a trained moderator

–         Challenges

•          Expensive

•          Difficult to generalize from small group

•          Consumers not always open and honest

Marketing Research Contact Methods

Marketing Research Online Research

Advantages

•          Low cost

•          Speed

•          Higher response rates

•          Good for hard to reach groups

Disadvantages

•          Restricted internet access

•          Not sure who is answering

Marketing Research Sampling Plan

Sample is a segment of the population selected for marketing research to represent the population as a whole

–         Who is to be surveyed?

–         How many people should be surveyed?

–         How should the people be chosen?

Marketing Research Research Instruments

Questionnaires

•          Most common

•          Administered in person, by phone, or online

•          Flexible

•          Watch working and ordering of questions

Marketing Research Research Instruments - Questionnaires

•          Closed-end questions include all possible answers, and subjects make choices among them

–         Provide answers that are easier to interpret and tabulate

•          Open-end questions allow respondents to answer in their own words

–         Useful in exploratory research

Marketing Research Implementing the Research Plan

•          Collecting the information

•          Processing the information

•          Analyzing the information

•          Interpret findings

•          Draw conclusions

•          Report to management

Customer Relationship Management (CRM)

CRM consists of sophisticated software and analytical tools that integrate customer information from all sources, analyze it in depth, and apply the results to build stronger customer relationships

Customer Relationship Management Touchpoints

Distributing and Using Marketing Information

Information distribution involves entering information into databases and making it available in a time-useable manner

•          Intranet provides information to employees and other stakeholders

•          Extranet provides information to key customers and suppliers

Other Marketing Information Considerations

•          Marketing Research in Small Businesses and Nonprofit Organizations

•          International Market Research

•          Public Policy and Ethics

ü  Customer privacy

ü  Misuse of research findings

Chapter 1

creating and capturing customer Value

Topic Outline

•Define marketing and outline the steps in the marketing process

•Understanding the Marketplace and Customer Needs

•Designing a Customer-Driven Marketing Strategy

•Preparing an Integrated Marketing Plan and Program

•Building Customer Relationships

•Capturing Value from Customers

•The Changing Marketing Landscape

What is a Marketing?

Marketing is a process by which companies create value for customers and build strong

customer relationships to capture value from customers in return

Understanding the Marketplace and Customer Needs

Core Concepts

•Customer needs, wants, and demands

•Market offerings

•Customer Value and satisfaction

•Exchanges and relationships

•Markets

Customer Needs, Wants, and Demands

Needs : •States of deprivation

                •Physical—food, clothing, warmth, safety

                •Social—belonging and affection

                •Individual—knowledge and self-expression

Wants : •Form that human needs take as they are shaped by culture and individual personality

Demands :•Human wants backed by buying power

•Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want

•Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs

Customer Value and Satisfaction Expectations

Exchange is the act of obtaining a desired object from someone by offering something in return

Markets are the set of actual and potential buyers of a product or service

Designing a Customer-Driven Marketing Strategy

Marketing management is the art and science of choosing target markets and building

profitable relationships with them

–What customers will we serve?

–How can we best serve these customers?

Selecting Customers to Serve

Demarketing is marketing to reduce demand temporarily or permanently; the aim is not

to destroy demand but to reduce or shift it

Choosing a Value Proposition

•The value proposition is the set of benefits or values a company promises to deliver to

customers to satisfy their needs

Marketing Management Orientations

Production concept is the idea that consumers will favor products that are available or
highly affordable

Product concept is the idea that consumers will favor products that offer the most
quality, performance, and features.  Organizations should therefore devote its energy to
making continuous product improvements.

Product concept is the idea that consumers will favor products that offer the most
quality, performance, and features.  Organizations should therefore devote its energy to
making continuous product improvements.

Selling concept is the idea that consumers will not buy enough of the firm’s products
unless it undertakes a large scale selling and promotion effort

Marketing concept is the idea that achieving organizational goals depends on knowing
the needs and wants of the target markets and delivering the desired satisfactions better
than competitors do

Societal marketing concept is the idea that a company should make good marketing
decisions by considering consumers’ wants, the company’s requirements, consumers’
long-term interests, and society’s long-run interests

Preparing an Integrated Marketing Plan and Program

•The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing

strategy. It includes product, price, promotion, and place.

•Integrated marketing program is a comprehensive plan that communicates and

delivers the intended value to chosen customers.

Building Customer Relationships

Customer Relationship Management (CRM)

The overall process of building and maintaining profitable customer relationships by

delivering superior customer value and satisfaction

Relationship Building Blocks: Customer Value and Satisfaction

Customer Relationship Levels and Tools

- Basic Relationship

- Full Partnership

The Changing Nature of Customer Relationships

•Relating with more carefully selected customers uses selective relationship management

to target fewer, more profitable customers

•Relating more deeply and interactively by incorporating more interactive two way

relationships through blogs, Websites, online communities and social networks

Partner relationship management involves working closely with partners in other

company departments and outside the company to jointly bring greater value to customers

Partner Relationship Management

•Partners inside the company is every function area interacting with customers

–Electronically

–Cross-functional teams

•Partners outside the company is how marketers connect with their suppliers, channel

partners, and competitors by developing partnerships.

•Supply chain is a channel that stretches from raw materials to components to final

products to final buyers

•Supply management

•Strategic partners

•Strategic alliances

Capturing Value from Customers

Creating Customer Loyalty and Retention

•Customer lifetime value is the value of the entire stream of purchases that the customer

 would make over a lifetime of patronage

Growing Share of Customer

Share of customer is the portion of the customer’s purchasing that a company gets in its

product categories

Customer equity is the total combined customer lifetime values of all of the company’s

customers

Building Customer Equity

•Building the right relationships with the right customers involves treating customers as

assets that need to be managed and maximized

•Different types of customers require different relationship management strategies

–Build the right relationship with the right customers\

The New Marketing Landscape

Major Developments

Chapter 6

Business Markets and Business Buying Behavior

Topic Outline

•          Define the business market and explain how business markets differ from consumer markets

•          Identify the major factors that influence business buyer behavior

•          List and define the steps in the business buying-decision process

•          Compare the institutional and government markets and explain how institutional and government buyers make their buying decisions

Business Market

Business buyer behavior refers to the buying behavior of the organizations that buy goods and services for use in production of other products and services that are sold, rented, or supplied to others. Also included are retailing and wholesaling firms that acquire goods to resell or rent to others for profit.

Market Structure and Demand

•          Fewer and larger buyers

•          Geographic concentration

•          Derived demand

–         Inelastic demand

–         Fluctuating demand

•          Buyer and seller dependency

More decision participants

More professional purchasing effort

Types of Decisions and the Decision-Making Process

Supplier development is the systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and materials that they will use in making their own products or resell

Business Buyer Behavior

Major Types of Buying Situations

Straight rebuy is a routine purchase decision such as reorder without any modification

Modified rebuy is a purchase decision that requires some research where the buyer wants to modify the product specification, price, terms, or suppliers

New task is a purchase decision that requires thorough research such as a new product

Systems selling involves the purchase of a packaged solution from a single seller

Two-step process of selling:

–         Interlocking products

–         System of production, inventory control, distribution, and other services to meet the buyer’s need for a smooth-running operation

Participants in the Business Buying Process

Buying center is all of the individuals and units that participate in the business decision-making process

–         Users

–         Influencers

–         Buyers

–         Deciders

–         Gatekeepers

–         Buying center provides a major challenge

–         Who participates in the process

–         Their relative authority

–         What evaluation criteria each  participant uses

–         Informal participants

Participants in the Business Buying Process

Users are those that will use the product or service

Influencers help define specifications and provide information for evaluating alternatives

Buyers have formal authority to select the supplier and arrange terms of purchase

Deciders have formal or informal power to select and approve final suppliers

Gatekeepers control the flow of information

Major Influences on Business Buyers

Economic Factor : price and service

Personal factor : emotion

Major Influences on Business Buyers Environmental Factors

Major Influences on Business Buyers Organizational Factors

-Objectives

-politicies

-procedures

-structure

 -system

Major Influences on Business Buyers Interpersonal Factors

The Buying Process

•          Problem recognition occurs when someone in the company recognizes a problem or need

•          Internal stimuli

–         Need for new product or production equipment

•          External stimuli

–         Idea from a trade show or advertising

•          General need description describes the characteristics and quantity of the needed item

•          Product specification describes the technical criteria

•          Value analysis is an approach to cost reduction where components are studied to determine if they can be redesigned, standardized, or made with less costly methods of production

•          Supplier search involves compiling a list of qualified suppliers

•          Proposal solicitation is the process of requesting proposals from qualified suppliers

Supplier selection is the process when the buying center creates a list of desired supplier attributes and negotiates with preferred suppliers for favorable terms and conditions

Order-routine specifications is the final order with the chosen supplier and lists all of the specifications and terms of the purchase

Performance review involves a critique of supplier performance to the purchase terms

E-Procurement

•          Online purchasing

•          Company-buying sites

•          Extranets

•          Advantages

•          Access to new suppliers

•          Lowers costs

•          Speeds order processing and delivery

•          Shares information

•          Sales

•          Service and support

•          Disadvantages

•          Can erode relationships as buyers search for new suppliers

•          Security

Institutional markets consist of hospitals, nursing homes, and prisons that provide goods and services to people in their care

•          Characteristics

–         Low budgets

–         “Captive” audience

Government markets tend to favor domestic suppliers and require suppliers to submit bids and normally award to the lowest bidder

•          Carefully monitored

•          Affected by similar environmental factors

•          Good credit

•          Non-economic factors

•          Minority suppliers

•          Depressed suppliers

•          Small businesses

Chapter 8

Products, Services, and Brands Building Customer Value

Topic Outline

•          What Is a Product?

•          Product and Services Decisions

•          Branding Strategy: Building Strong Brands

•          Services Marketing

What Is a Product?

Product is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want

Experiences represent what buying the product or service will do for the customer

Product and Service Classifications

Consumer product , Industrial product

Product and Service Classifications

•          Consumer products are products and services for personal consumption

•          Classified by how consumers buy them

–         Convenience products

–         Shopping products

–         Specialty products

–         Unsought products

Convenience products are consumer products and services that the customer usually buys frequently, immediately, and with a minimum comparison and buying effort

•          Newspapers

•          Candy

•          Fast food

Shopping products are consumer products and services that the customer compares carefully on suitability, quality, price, and style

•          Furniture

•          Cars

•          Appliances

Specialty products are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort

•          Medical services

•          Designer clothes

•          High-end electronics

Unsought products are consumer products that the consumer does not know about or knows about but does not normally think of buying

•          Life insurance

•          Funeral services

•          Blood donations

Industrial products are products purchased for further processing or for use in conducting a business

•          Classified by the purpose for which the product is purchased

–         Materials and parts

–         Capital

–         Raw materials

•          Capital items are industrial products that aid in the buyer’s production or operations

•          Materials and parts include raw materials and manufactured materials and parts usually sold directly to industrial users

•          Supplies and services include operating supplies, repair and maintenance items, and  business services

Organization marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward an organization

Person marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular people

Place marketing consists of activities undertaken to create, maintain, or change attitudes and behavior of target consumers toward particular places

Social marketing is the use of commercial marketing concepts and tools in programs designed to influence individuals’ behavior to improve their well-being and that of society

Product and Services Decisions

Individual Product and Service Decisions

Product attributes are the benefits of the product or service

•          Quality

•          Features

•          Style and design

Product quality includes level and consistency

•          Quality level is the level of quality that supports the product’s positioning

•          Conformance quality is the product’s freedom from defects and consistency in delivering a targeted level of performance

Product features are a competitive tool for differentiating a product from competitors’ products

Product features are assessed based on the value to the customer versus the cost to the company

Style describes the appearance of the product

Design contributes to a product’s usefulness as well as to its looks

Brand is the name, term, sign, or design—or a combination of these—that identifies the maker or seller of a product or service

Brand equity is the differential effect that the brand name has on customer response to the product and its marketing

Packaging involves designing and producing the container or wrapper for a product

Labels identify the product or brand, describe attributes, and provide promotion

Product Line Decisions

Product line is a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges

Product line length is the number of items in the product line

•          Line stretching

•          Line filling

Product mix consists of all the products and items that a particular seller offers for sale

•          Width

•          Length

•          Depth

•          Consistency

Branding Strategy: Building Strong Brands

Brand represents the consumer’s perceptions and feelings about a product and its performance. It is the company’s promise to deliver a specific set of features, benefits, services, and experiences consistently to the buyers

Brand Positioning

Brand strategy decisions include:

•          Product attributes

•          Product benefits

•          Product beliefs and values

Brand Name Selection

Desirable qualities

1. Suggest benefits and qualities
2. Easy to pronounce, recognize, and remember
3. Distinctive
4. Extendable
5. Translatable for the global economy
6. Capable of registration and legal protection

Brand Sponsorship

•          Manufacturer’s brand

•          Private brand

•          Licensed brand

•          Co-brand

Types of Service Industries

•          Government

•          Private not-for-profit organizations

•          Business services

Marketing Strategies for Service Firms

•          In addition to traditional marketing strategies, service firms often require additional strategies

•          Service-profit chain

•          Internal marketing

•          Interactive marketing

•          Service-profit chain links service firm profits with employee and customer satisfaction

•          Internal service quality

•          Satisfied and productive service employees

•          Greater service value

•          Satisfied and loyal customers

•          Healthy service profits and growth

Internal marketing means that the service firm must orient and motivate its customer contact employees and supporting service people to work as a team to provide customer satisfaction

Internal marketing must precede external marketing

Interactive marketing means that service quality depends heavily on the quality of the buyer-seller interaction during the service encounter

•          Service differentiation

•          Service quality

•          Service productivity

Managing service differentiation creates a competitive advantage from the offer, delivery, and image of the service

•          Offer can include distinctive features

•          Delivery can include more able and reliable customer contact people, environment, or process

•          Image can include symbols and branding

Managing service quality provides a competitive advantage by delivering consistently higher quality than its competitors

Service quality always varies depending on interactions between employees and customers

Managing service productivity refers to the cost side of marketing strategies for service firms

•          Employee recruiting, hiring, and training strategies

•          Service quantity and quality strategies

Chapter 5

Consumer Markets and Consumer Buyer Behavior

Topic Outline

•          Model of Consumer Behavior

•          Characteristics Affecting Consumer Behavior

•          Types of Buying Decision Behavior

•          The Buyer Decision Process

•          The Buyer Decision Process for New Products

Consumer buyer behavior  refers to the buying behavior of final consumers—individuals and households who buy goods and services for personal consumption

Consumer market refers to all of the personal consumption of final consumers

Factors Influencing Consumer Behavior

Characteristics Affecting Consumer Behavior

Culture is the learned values, perceptions, wants, and behavior from family and other important institutions

Subculture are groups of people within a culture with shared value systems based on common life experiences

    and situations

•          Hispanic

•          African American

•          Asian

•          Mature consumers

Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors

•          Measured by a combination of occupation, income, education, wealth, and other variables

Groups and Social Networks

Membership Groups : Groups with direct influence and to which a person belongs

Aspirational Groups : Groups an individual wishes to belong to

Reference Groups : Groups that form a comparison or reference in forming attitudes or behavior

Word-of-mouth influence and buzz marketing

–         Opinion leaders are people within a reference group who exert social influence on others

–         Also called influentials or leading adopters

–         Marketers identify them to use as brand ambassadors

•          Online Social Networks are online communities where people socialize or exchange information and opinions

•          Include blogs, social networking sites (facebook), virtual worlds (second life)

Social Factors

•          Family is the most important consumer-buying organization in society

•          Social roles and status are the groups, family, clubs, and organizations that a person belongs to that can define role and social status

Personal Factors

•          Age and life-cycle stage

•          RBC Royal Band stages

–         Youth: younger than 18

–         Getting started: 18–35

–         Builders: 35–50

–         Accumulators: 50–60

–         Preservers: over 60

Occupation affects the goods and services bought by consumers

Economic situation includes trends in:

Personal Income, Saving, Interest rates

Lifestyle is a person’s pattern of living as expressed in his or her psychographics

•          Measures a consumer’s AIOs (activities, interests, opinions) to capture information about a person’s pattern of acting and interacting in the environment

•          Personality and self-concept

•          Personality refers to the unique psychological characteristics that lead to consistent and lasting responses to the consumer’s environment

Psychological Factors

Motivation, perception, learning, beliefs and attitudes

Psychological Factors Motivation

A motive is a need that is sufficiently pressing to direct the person to seek satisfaction

Motivation research refers to qualitative research designed to probe consumers’ hidden, subconscious motivations

Maslow’s Hierarchy of Needs

Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world from three perceptual processes

–         Selective attention

–         Selective distortion

–         Selective retention

–         Selective attention is the tendency for people to screen out most of the information to which they are exposed

–         Selective distortion is the tendency for people to interpret information in a way that will support what they already believe

–         Selective retention is the tendency to remember good points made about a brand they favor and forget good points about competing brands

Learning is the change in an individual’s behavior arising from experience and occurs through interplay of:

Drives, stimuli, cues, responses, reinforcement

Belief is a descriptive thought that a person has about something based on:

•          Knowledge

•          Opinion

•          Faith

Attitudes describe a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea

Types of Buying Decision Behavior

•          Complex buying behavior

•          Dissonance-reducing buying behavior

•          Habitual buying behavior

•          Variety-seeking buying behavior

Four Types of Buying Behavior

Buyer Decision Making Process

Need Recognition

•          Occurs when the buyer recognizes a problem or need triggered by:

–         Internal stimuli

–         External stimuli

Information Search Sources of Information

•          Personal sources—family and friends

•          Commercial sources—advertising, Internet

•          Public sources—mass media, consumer organizations

•          Experiential sources—handling, examining, using the product

Evaluation of Alternatives

How the consumer processes information to arrive at brand choices

Purchase Decision

•          The act by the consumer to buy the most preferred brand

•          The purchase decision can be affected by:

–        Attitudes of others

–        Unexpected situational factors

Post-Purchase Decision

•          The satisfaction or dissatisfaction that the consumer feels about the purchase

•          Relationship between:

–        Consumer’s expectations

–        Product’s perceived performance

•          The larger the gap between expectation and performance, the greater the consumer’s dissatisfaction

•          Cognitive dissonance is the discomfort caused by a post-purchase conflict

Customer satisfaction is a key to building profitable relationships with consumers—to keeping and growing consumers and reaping their customer lifetime value

The Buyer Decision Process for New Products

Adoption process is the mental process an individual goes through from first learning about an innovation to final regular use.

•          Stages in the process include:

Influence of Product Characteristics on Rate of Adoption