Transcript PowerPoint 3.02 part 2

MARKETING
Essential Standard 3.00
Objective 3.02 Understand buying
behaviors.
Topics
 Marketing Strategy
 Consumer Decision-Making Process
 Major Sources of Consumer Information
 Shopping Locations
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 What does a marketing strategy* do?
 provides vital information on how a business will meet its
goals of
 satisfying customers and
 making sales and profits.
(*Strategy is a plan of action designed to help you reach
goals)
 Two Steps:
 Target Market
 Marketing Mix
Steps in a Marketing Strategy
 Two steps to a marketing strategy:
 First, Identify a target market
 A target market consists of a group of people that have similar
needs and wants.
 Examples:
 Homeowners who decorate homes
 People with domestic pets
 Parents concerned about children’s nutrition
 Children who participate in athletics
 Second, Create a marketing mix
 A marketing mix consist of a blending of the marketing elements
(product, price, place-distribution, and promotion)
 Example: advertisements in home décor magazines give discounts
for paint
 Coupons for discounts on new pet food, apparel, toys
 Free samples of children’s foods
 Contests for free athletic equipment
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Applying A Market Strategy
Part 1
 Determine your target market. This is the group that you want to
reach with your market strategy.
 Part 2
 Use the marketing mix to implement your strategy by making
decisions about:
1. What your business is going to make/sell (Product/service)
2. What prices will be (Price)
3. How you will deliver to customers (Place-Distribution)
4. How you will make customers aware of your product/service
(Promotion)
A successful marketing strategy satisfies the wants and needs of the
target market. It also provides profit to the company.

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What is a Target Market?
 A specific group of consumers that have
similar wants and needs.
 4 types of segmentation:
1. Demographic (age, gender, income,
ethnicity)
2. Geographic (location)
3. Psychographic (values, attitudes, &
lifestyles)
4. Behavioral (why customers buy the
product)
Why is the blend of the Marketing
Mix (4Ps) Important?
 blending of the marketing mix - product, place
(distribution), price, and promotion
 Why?
 To satisfy the wants and needs of the target
market
 To provide profit for the company
Consumer Decision Making
Steps in the consumer decision-making process:
 Recognize a need or want
 Gather information
 Select and evaluate alternatives
 Make a purchase decision
 Determine the effectiveness of the decision
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Decision-Making
 Extensive
 Occurs when there is a high level of perceived
risk, a product or service is very expensive or has
a high value to the customer.
 Limited
 Occurs when a customer buys products that he or
she has purchased before but not regularly.
 Routine
 Occurs when little information is needed about
the product being purchased.
Questions Consumers Ask
Related to Purchasing Decisions
 Do I really need the item
now?
 Instant gratification
 Which store should I
consider?
 choices
 What quality do I expect?
 What price am I willing
to pay?
 Should I pay cash or use
credit?
 Will have to do without
something else I truly
need if I buy this item?
 How long am I willing to
wait for this item?
 Delayed gratification
 Is this an emotional or
rational purchase?
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Why People Buy
 Emotional Motives
 Reasons to purchase
based on feelings, beliefs,
and attitudes
 Example: You purchase a
gift and card on Mother’s
Day triggered by feelings
of love and affection
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 Rational Motives
 Reasons to purchase
guided by logic and facts
 Example: If you want to
buy a cost effective car;
then consider fuel costs,
repair costs of various
models, maybe a hybrid.
Major Sources of
Consumer Information
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Product Testing Organizations Providing
Consumer Info
 Test products and services to detect benefits, problems
 Examples
– Underwriter Laboratories
– Association of Home Appliance Manufacturers
– Consumers Union (Independent testing organizations)
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Media Sources Providing Consumer
Information
 Provide specific information about products and services.
 Types of media sources:
◦ Print
Examples
 Magazines- Consumer Reports, Kiplinger’s Finance Magazine, Consumer’s Digest,
Good Housekeeping
 Newspapers – news and commentary articles about consumer issues, public
information
◦ Broadcast Organizations
Examples
 Radio- public information, news issues
 Television- public information, news issues
◦ Internet
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Government Agencies Who Provide
Information to Consumers
 Inform consumers and handle consumer questions.
 Types
◦ Federal
◦ USDA, FDA, HUD, CPSC, FTC, FCC, FCC, CDC (Center for Disease
Control)
◦ State
◦ Attorney General, Justice Dept, Dept of Commerce
◦ Local
◦ Health Department, Department of Aging
 What are some ways that government agencies protect
people?
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Business Sources of Consumer
Information
 Business sources are available
as a public service and to sell
products and services.
 Types
◦ Product labels provide helpful information about nature
of product, how to care for product, where product was
made, and the size of the product.
◦ Customer Service Departments focus on assisting
customers.
◦ Better Business Bureau (BBB) provide facts about
products or services. www.charlotte.bbb.org
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Major Sources of Consumer
Information
 What kinds of information have you obtained from
an advertisements?
 How did you use the information obtained from the
advertisement?
 What product label have you used?
 How was the information obtained from the product
label used?
 Poison – nutrition – warnings – warranty - directions
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Personal Contacts Providing Consumer
Information
“Word of mouth”
Advertising
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 Do you trust
information provided by
other people who have
bought and used a
product?
 Can be helpful in
making a decision
about a product.
The Complaint Process
1. Contact place of purchase
*provide evidence of purchase
and problem
2. Contact company
headquarters
*phone, email or write letter
providing fact about
situation. Be specific on
what action you want
them to take.
3. Involve an appropriate
consumer agency
*local, state, or federal agency
4. Take legal action
*alternative dispute resolutions,
class action lawsuit, small
claims court, hire a lawyer
Consumer Rights & Responsibilities –
Remedy, Service
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Shopping Locations
Competitive markets and technology provide consumers
with a variety of shopping locations.
Where are your favorite locations to shop?
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Market Economy = Dollars vote
Basic economic decisions are based on the actions of buyers and
sellers in the market.
 Price
 The amount of money given or asked for, when goods or services are
bought or sold.
 Marketplace
 Any place where
individuals buy and
sell goods and services
 What does it mean to barter?
 Do you negotiate for what you want to buy?
Traditional Retailers
nicknamed “bricks and mortar”

Department Stores

Supermarkets

Discount Stores

Specialty Stores

Convenience Store
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Types of Merchandisers - Department Stores

Different departments within a store sell a variety of products – men’s, women’s, children’s
clothing, home furnishings, jewelry

Goods are moderately priced, but not lowest

Salespeople available to assist

Special services available (gift wrapping, delivery)

Elaborate merchandise displays

Offer charge cards, registries for wedding/baby gifts

Examples: Macy’s, Nordstrom’s, Saks Fifth Avenue, Belk
Types of MerchandisersSupermarket- Safeway, Walmart
Large, full service store
offers large variety of brands & products
-items such as books, hardware, sporting goods,
clothing, pharmacy, grocery, photography, general
merchandise, at reasonable or low prices
 Often nationwide stores
 Practical displays
 Limited service is available
Types of MerchandisersSpecialty stores
 Sell only one kind of merchandise
 clothing stores, athletic goods stores, home appliance
stores, hardware stores
 services vary, selling methods and prices vary
 Examples: Limited, GAP, Foot Locker, Kay Jewelers,
Pier One, Dick’s Sporting Goods
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Types of MerchandisersDiscount Stores
 Discount Stores- Highlight their offering
of lower prices for products- still profit
since have high volume with low profit
margin %
 Examples? Walmart, Target
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Types of MerchandisersConvenience Stores
 Usually located in highly accessible areas; main
highways, intersections, near subdivisions
 Provide popular items
 Higher prices
 Offer longer operating hours
 Examples?
 Circle K, 7-11, stores at gas stations
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Contemporary Retailers
 Specialty Superstores
 Superstores
 Warehouse Club
 Factory Outlets
 Non-Store Shopping
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Types of MerchandisersContemporary Retailers
 Specialty Superstores
 Provide wide variety of limited products at low prices
 What are some examples?
 Office Max, Home Depot, Best Buy
 Superstores
 Provide a wide variety products in the retail services such
as food, RX, clothing, banking, bakery, auto, sporting
goods, and electronics.
 What are some examples?
 Super Walmart, Super Target, SuperKmart
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Types of MerchandisersContemporary Retailers
 Warehouse Club
 No frills
 Service
 Sales associates to help
 Few aesthetics- displays
 Limited selection
 Focusing on:
 sale of large quantities
 practical prices
 What are some examples? Sam’s Club, BJ’s
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Types of MerchandisersContemporary Retailers – Factory Outlets
 Operated by manufacturer
 carry only that manufacturer’s brand or an affiliated
manufacturer
 Discounted prices
 Provide high-quality products at lower prices
 Products come direct from factory
 Cut out middleman; less cost
 Products sometimes have flaws
 “seconds”- not 1st quality,
 pulled from inventory during quality control function of production
 Examples: Easy Spirit, Carter’s, Peaches and Cream,
Corning , Loft
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Types of MerchandisersNon-Store Shopping
 Allows purchasing of goods and services
by telephone, computer, television, fax,
http://www.fwi.co.uk/Articles/2010/04/20/1208
or door-to-door.
60/Egg-vending-machine-a-hit.htm
www.flickr.com/photos/hartsell/4870530853/
 Example: Vending Machines
 Vending machines provide products through automation
 What are some examples of vending machine shopping
opportunities?
◦ Food products, small packages of essentials for travelers
◦ More and more products are available from vending machines
◦ On college campuses…even ice cream vending machines
◦ In Japan - toys, flowers, toilet paper, eggs
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Types of MerchandisersNon-Store Shopping
 What are some examples
of non-store shopping
opportunities?

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Vending machines
Telephone shopping
Online shopping
Door to door
QVC on television
Catalog ordering
 Computerized non-
store retailers often
called “Etailers”.
 Electronic Retailers
 Look up “Etailers” on
Wikipedia. Write a
definition in your notes.
Factors Affecting Decision-Making
 Rank from 1-9 the factors affecting your purchasing
decisions
 Price: sales, clearance, your budget
 Location: Convenience of store location, layout
 Services: gift wrap, layaway, full customer service, # of
checkout lines, credit cards accepted
 Perceived value of product, store
 Advertising and promotions
 Peers: “Keeping up with Jones”
 Brand loyalty: have to have this brand
 Emotional motive: impulsive buying
 Rational motive: reasoned out, planned, budget
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