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Marketing is defined by the American Marketing Association as the activity, set of institutions, and
processes for creating, communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large. [1] The term developed from the original meaning which
referred literally to going to market, as in shopping, or going to a market to buy or sell goods or services.
The Chartered Institute of Marketing, which is the world's largest marketing body[citation needed], defines
marketing as "The management process responsible for identifying, anticipating and satisfying customer
requirements profitably."[2]
Marketing practice tended to be seen as a creative industry in the past, which included advertising,
distribution and selling. However, because marketing makes extensive use of social sciences, psychology,
sociology, mathematics, economics, anthropology and neuroscience, the profession is now widely
recognized a science, allowing numerous universities to offer Master-of-Science (MSc) programmes. The
overall process starts with marketing research and goes through market segmentation, business planning
and execution, ending with pre and post-sales promotional activities. It is also related to many of the
creative arts. The marketing literature is also infamous for re-inventing itself and its vocabulary according
to the times and the culture.
Services marketing
The major difference in the education of services marketing versus regular marketing is that instead of the
traditional "4 P's," Product, Price, Place, Promotion, there are three additional "P's" consisting of People,
Physical evidence, and Process.[1] Service marketing also includes the servicewomen referring to but not
limited to the aesthetic appearance of the business from the outside, the inside, and the general
appearance of the employees themselves. Service Marketing has been relatively gaining ground in the
overall spectrum of educational marketing as developed economies move farther away from industrial
importance to service oriented economies. What is marketing? Marketing is the flow of goods and
services from the producer to consumer. It is based on relationship and value. In common parlance it is the
distribution and sale of goods and services. Marketing can be differentiated as:
• Marketing of products
• Marketing of services.
Marketing includes the services of all those indulged may it be then the wholesaler retailer, Warehouse
keeper, transport etc. In this modern age of competition marketing of a product or service plays a key role.
It is estimated that almost 50% of the price paid for a commodity goes to the marketing of the product in
US. Marketing is now said to be a term which has no particular definition as the definitions change
everyday.
"Managing the evidence" refers to the act of informing customers that the service encounter has been
performed successfully. It is best done in subtle ways like providing examples or descriptions of good and
poor service that can be used as a basis of comparison. The underlying rationale is that a customer might
not appreciate the full worth of the service if they do not have a good benchmark for comparisons.
However, it is worth remembering that many of the concepts, as well as many of the specific techniques,
will work equally well whether they are directed at products or services. In particular, developing a
marketing strategy is much the same for products and services, in that it involves selecting target markets
and formulating a marketing mix. Thus, Theodore Levitt suggested that "instead of talking of 'goods' and
of 'services', it is better to talk of 'tangibles' and 'intangibles'"[2]. Levitt also went on to suggest that
marketing a physical product is often more concerned with intangible aspects (frequently the `product
service' elements of the total package) than with its physical . sales after service is very imporatant in
service sector. properties. Charles Revson made a famous comment regarding the business of Revlon Inc.:
`In the factory we make cosmetics. In the store we sell hope.' Arguably, service industry marketing merely
approaches the problems from the opposite end of the same spectrum[3].
b) How would you reply to the small business person who says, “Marketing Research is too
expensive, so the firm will just have to get by without it’?
In a world where perception is everything, businesses often think that professional Marketing Research is
too expensive. Now, who can argue with perception, let alone Marketing budgets, most of them on shaky
ground these days? In today’s economy, a business could easily argue against expensive luxury services
like Marketing Research. Still, as I hear from business leaders about their woes in this time of fiscal crisis,
my reaction is “expensive compared with what?”
The Marketing Analysts offers a broad line of inexpensive marketing services that have traditionally been
too costly for small, medium, and medium-large companies. Just like some of the world’s largest
Marketing firms, we offer the same services that create, evaluate and strengthen brands. However, unlike
other marketing firms, our predictive marketing research methodologies are superior and produce
more reliable results. Further, we can offer prices that even small businesses can afford because we can
capitalize on advanced technological and proprietary marketing software technologies that our
competitors lack.
The Marketing Analysts is a Marketing firm with offices in Dallas, Texas; Fort Myers, Florida; Sofia,
Bulgaria; Cologne, Germany; Ismailia, Egypt and Moscow, Russia to provide one-stop, high quality,
low cost solutions for your special marketing needs.
Our Marketing Research competencies include measuring attitudes and behaviors to explain accurately
and predict market share, revenue, and bottom line impact of a client’s actions. Our team of consultants
has been successfully designing, executing and analyzing Marketing Research studies since 1996. We help
our clients launch better products and services, attract and retain valuable customers, and build stronger
brands. Whether you are looking for advice on how to optimize the development and launch of a new
product, seeking guidance on how to build brand wealth and customer loyalty, or in search of a customized
product line solution, we provide growth solutions.
In addition, to providing predictive marketing services, we also offer a variety of integrated marketing
solutions including content management systems, search engine optimization, and language translation
services.
Our team is highly talented and consists of respected Marketing Ph. D’s, experienced Marketing Managers,
talented Computer Science professionals and competent Language Translators who hold advanced
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With our highly skilled associates, we are able to leverage all activities effectively to affordably
meet each of our client’s unique objectives. Please visit our web site THE MARKETING ANALYSTS
today for additional information.
2 a) What are the steps in the consumer decision making process? Do all consumers
decisions involve these steps.
Buyer decision processes are the decision making processes undertaken by consumers in regard to a
potential market transaction before, during, and after the purchase of a product or service.
More generally, decision making is the cognitive process of selecting a course of action from among
multiple alternatives. Common examples include shopping, deciding what to eat. Decision making is said
to be a psychological construct. This means that although we can never "see" a decision, we can infer from
observable behaviour that a decision has been made. Therefore we conclude that a psychological event
that we call "decision making" has occurred. It is a construction that imputes commitment to action. That
is, based on observable actions, we assume that people have made a commitment to effect the action.
In general there are three ways of analysing consumer buying decisions. They are:
• Economic models - These models are largely quantitative and are based on the
assumptions of rationality and near perfect knowledge. The consumer is seen to
maximize their utility. See consumer theory. Game theory can also be used in some
circumstances.
• Consumer behaviour models - These are practical models used by marketers. They
typically blend both economic and psychological models.
Nobel laureate Herbert Simon sees economic decision making as a vain attempt to be rational. He claims
(in 1947 and 1957) that if a complete analysis is to be done, a decision will be immensely complex. He also
says that peoples' information processing ability is very limited. The assumption of a perfectly rational
economic actor is unrealistic. Often we are influenced by emotional and non-rational considerations. When
we try to be rational we are at best only partially successful.
In an early study of the buyer decision process literature, Frank Nicosia (Nicosia, F. 1966; pp 9-21)
identified three types of buyer decision making models. They are the univariate model (He called it the
"simple scheme".) in which only one behavioural determinant was allowed in a stimulus-response type of
relationship; the multi-variate model (He called it a "reduced form scheme".) in which numerous
independent variables were assumed to determine buyer behaviour; and finally the "system of equations"
model (He called it a "structural scheme" or "process scheme".) in which numerous functional relations
(either univariate or multi-variate) interact in a complex system of equations. He concluded that only this
third type of model is capable of expressing the complexity of buyer decision processes. In chapter 7,
Nicosia builds a comprehensive model involving five modules. The encoding module includes determinants
like "attributes of the brand", "environmental factors", "consumer's attributes", "attributes of the
organization", and "attributes of the message". Other modules in the system include, consumer decoding,
search and evaluation, decision, and consumption.
A general model of the buyer decision process consists of the following steps:
1. Problem recognition;
2. Gathering Information
3. Alternative education
4. Purchase decision
5. Post-purchase behavior/buyer's remorse (cognitive dissonance)
There are a range of alternative models, but that of AIUAPR, which most directly links to the steps in the
marketing/promotional process is often seen as the most generally useful[1];
• AWARENESS - before anything else can happen the potential customers must become
aware that the product or service exists. Thus, the first task must be to gain the
attention of the target audience. All the different models are, predictably, agreed on this
first step. If the audience never hears the message, they will not act on it, no matter
how powerful it is.
• INTEREST - but it is not sufficient to grab their attention. The message must interest
them and persuade them that the product or service is relevant to their needs. The
content of the message(s) must therefore be meaningful and clearly relevant to that
target audience's needs, and this is where marketing research can come into its own.
• ATTITUDES - but the message must go even further; to persuade the reader to adopt a
sufficiently positive attitude towards the product or service that he or she will purchase
it, albeit as a trial. There is no adequate way of describing how this may be achieved. It
is simply down to the magic of the copywriter's art, or based on the strength of the
product or service itself.
• PURCHASE - all the above stages might happen in a few minutes while the reader is
considering the advertisement; in the comfort of his or her favourite armchair. The final
buying decision, on the other hand, may take place some time later; perhaps weeks
later, when the prospective buyer actually tries to find a shop which stocks the product.
• REPEAT PURCHASE - but in most cases this first purchase is best viewed as just a trial
purchase. Only if the experience is a success for the customer will it be turned into
repeat purchases. These repeats, not the single purchase which is the focus of most
models, are where the vendors focus should be, for these are where the profits are
generated. The earlier stages are merely a very necessary prerequisite for this!
This is a very simple model, and as such does apply quite generally. Its lessons are that you cannot obtain
repeat purchasing without going through the stages of building awareness and then obtaining trial use;
which has to be successful. It is a pattern which applies to all repeat purchase products and services;
industrial goods just as much as baked beans. This simple theory is rarely taken any further - to look at the
series of transactions which such repeat purchasing implies. The consumer's growing experience over a
number of such transactions is often the determining factor in the later - and future - purchases. All the
succeeding transactions are, thus, interdependent - and the overall decision-making process may
accordingly be much more complex than most models allow for.[2]
It has been suggested that this article or section be merged into List of
cognitive biases. (Discuss)
It is generally agreed that biases can creep into our decision making processes, calling into question the
correctness of a decision. Below is a list of some of the more common cognitive biases.
• Selective search for evidence - We tend to be willing to gather facts that support certain
conclusions but disregard other facts that support different conclusions.
• Premature termination of search for evidence - We tend to accept the first alternative
that looks like it might work.
• Conservatism and inertia - Unwillingness to change thought patterns that we have used
in the past in the face of new circumstances.
• Experiential limitations - Unwillingness or inability to look beyond the scope of our past
experiences; rejection of the unfamiliar.
• Wishful thinking or optimism - We tend to want to see things in a positive light and this
can distort our perception and thinking.
• Recency - We tend to place more attention on more recent information and either ignore
or forget more distant information.
• Repetition bias - A willingness to believe what we have been told most often and by the
greatest number of different of sources.
• Anchoring - Decisions are unduly influenced by initial information that shapes our view
of subsequent information.
• Group think - Peer pressure to conform to the opinions held by the group.
• Source credibility bias - We reject something if we have a bias against the person,
organization, or group to which the person belongs: We are inclined to accept a
statement by someone we like.
• Role fulfillment - We conform to the decision making expectations that others have of
someone in our position.
• Ascription of causality - We tend to ascribe causation even when the evidence only
suggests correlation. Just because birds fly to the equatorial regions when the trees lose
their leaves, does not mean that the birds migrate because the trees lose their leaves.
Consumer behavior
The actions a person takes in purchasing and using
products and services,
including the mental and social processes that
precede and follow these actions.
The behavioral sciences help answer questions
such as :
Why people choose one product or brand over
another,
How they make these choices, and
How companies use this knowledge to provide
value to consumers
•
I. CONSUMER PURCHASE DECISION PROCESS
o Behind the visible act of making a purchase lies a decision process that must be investigated.
o The purchase decision process is the stages a buyer passes through in making choices about w
5. post-purchase behavior.
o Perceiving a difference between a person's ideal and actual situations big enough to trigger a
o Can be as simple as noticing an empty milk carton or it can be activated by marketing efforts.
The information search stage clarifies the options open to the consumer and may involve
the group of brands that a consumer would consider acceptable from among all the br
she is aware
Return policy.
store atmosphere
time pressure
When to buy a sale
Do not buy
o After buying a product, the consumer compares it with expectations and is either satisfied or d
consumer communications
repeat-purchase behavior.
o Many firms work to produce positive postpurchase communications among consumers and con
sellers and buyers.
o Cognitive Dissonance. The feelings of postpurchase psychological tension or anxiety a consum
o Firms often use ads or follow-up calls from salespeople in this postpurchase stage to try to con
decision.
11 is expensive,
Three general problem-solving variations exist in the consumer purchase decision process:
o Virtually a habit
Extended Problem o Each stage of the consumer purchase decision process is used
Solving
o Considerable time and effort on
11 evaluating alternatives.
o Used in high-involvement purchase situations.
Involvement and o Low and high consumer involvement has important implications fo
Marketing Strategy products that are market leaders from their challengers.
G. Situational Influences
The purchase
The reason for engaging in the decision.
task
Social Including others present when a purchase
Five
surroundings decision is made.
situatio
Physical Such as decor, music, and crowding in retail
nal
surroundings stores.
influenc
Such as time of day or the amount of time
es Temporal effects
available.
Antecedent Which include the consumer’s mood or amount of
states cash on hand
1
II. PSYCHOLOGICAL INFLUENCES ON CONSUMER BEHAVIOR
Concepts such as motivation and personality; perception; learning; values, beliefs and attitudes; and lifestyle are use
directing marketing efforts.
A. Motivation and Personality
1. Motivation
o Once basic physiological needs are met, people seek to satisfy learned needs.
Physiological o basic to
needs survival.
o self-
preservation
Safety needs
o physical wel
being.
o achievemen
Social needs o status
o prestige
o self-respect.
Self-actualization o personal
needs fulfillment.
2. Personality
o A person's consistent behavior or responses to recurring situations.
o Research suggests that key traits affect brand and product-type preferences.
o Cross-cultural analysis also suggests that residents of different countries have a national character, o
characteristics common among people of a country or society.
o Personality characteristics are often revealed in a person’s self-concept, which is the way people see
others see them.
B. Perception
o The process by which an individual uses information to create a meaningful picture of the world by
11 selecting,
11 organizing
11 interpreting
o Perception is important because people selectively perceive what they want and it affects how people
1. Selective Perception
o Filtering
11 exposure,
11 comprehension, and
Selective perception
11 retention
Subliminal o This is a hotly debated issue with more popular appeal than
perception
2. Perceived Risk
o Anxieties felt
C. Learning
11 Repeated experience
11 Thinking.
1. Behavioral Learning
reinforcem
The reward.
ent
2. Cognitive learning
o Involves making connections between two or more ideas
3. Brand loyalty
1. Attitude Formation
o A learned predisposition to respond to an object or class of objects in a consistently
Attitu favorable or unfavorable way.
de
o Shaped by our values and beliefs, which are learned.
Value o personally or socially preferable modes of conduct or states of existence that are
s enduring.
Belief o consumer's subjective perception of how well a product or brand performs on different
s attributes.
2. Attitude Change
E. Lifestyle
activiti
How a person spends time and resources
es
opinio
what a person thinks of self and the world
ns
o Psychographics
11 helps to segment and target consumers for new and existing products.
Self-orientation Resources
o income
o Three patterns of attitudes and activities that help people reinforce o education
o energy level.
1
III. SOCIOCULTURAL INFLUENCES ON CONSUMER BEHAVIOR
o Sociocultural influences evolve from a formal and informal relationships with other people.
o Influences Include
11 Personal influence
11 Reference groups
11 The family
11 Social class
11 Culture
11 Subculture.
A. Personal Influence
to marketing conversations.
Word of
mouth
o Power of word of mouth ha
Internet and e-mail
B. Reference Groups
Reference groups are people to whom an individual looks as a basis for self-appraisal or as a source of person
important influence on the purchase of luxury products but not of necessities. :
Membership
o one to which a person actually belongs
group
C. Family Influence
o Family influences on consumer behavior result from three sources:
11 consumer socialization
Consumer Consumer socialization is the process by which people acquire the skills, knowledge, and attit
Socialization consumers
Family Life o The distinct phases that a family progresses through from formation to
Cycle retirement
o Each phase bringing with it identifiable purchasing behaviors.
Fiv
o Two decision-making styles exist: th
o Increasingly, preteens and teenagers are assuming these roles for the
family, given the prevalence of working parents and single-parent households.
D. Social Class
o The relatively permanent, homogeneous divisions in a society into which people sharing simila
grouped.
o Determinants of social class include
11 occupation,
11 education.
o Social class is a basis for identifying and reaching particularly good prospects for products and
11 Upper classes are targeted by companies for items such as financial investments, exp
11 Middle classes represent a target market for home improvement centers and
11 Lower classes are targeted for products such as sports and scandal magazines.
E. Culture and Subculture
Culture refers to the set of values, ideas and attitudes that are accepted by a homogeneous group of people a
o Subcultures - groups within the larger, or national, culture with unique values, ideas, and attit
11 Hispanics,
11 African-Americans
11 Asians .
o Each of these groups exhibits sophisticated social and cultural behaviors that affect their buyi
o While price conscious, they are motivated by product quality and choice.
o Respond to products and advertising that appeal to their African-American pride and heritage
and needs.
2. Hispanic Buying Patterns
o Hispanics represent the largest subculture
o Sensitivity to the unique needs of Hispanics by firms has paid huge dividends.
o Asians represent a diverse subculture, including Chinese, Japanese, Filipinos, Koreans, Asian-I
Pacific Islanders.
o Two groups of Asian-Americans have been identified:
conversant in English
highly educated
11 Nonassimilated Asians
Conten
ts
[show]
• An organization has significant need for legal services and obtains submissions from two
law firms. Analysis of the proposals and subsequent discussions determines that there is
no price advantage to placing all of the work with one firm and the decision is made to
split the work between the two firms based on an evaluation of each firm's capabilities.
• Highly professional and Trained people in Buying processes are involved.In many cases
two or three decision makers have to be considered in purchasing industrial products.
• Purchase decision is typically made by a group of people ("buying team") not one
person.
• Often the buying/selling process is complex and includes many stages (for example;
request for expression of interest, request for tender, selection process, awarding of
tender, contract negotiations, and signing of final contract).
• A family are at home on a Sunday night and are watching television. An advertisement
appears that advertises home delivered pizza. The family decides to order a pizza.
• Walking down a supermarket aisle, a single man aged in his early 30's sees a hair care
product that claims to reduce dandruff. He pick's the product and adds it to his shopping
cart.
• A pensioner visits her local shopping mall. She purchases a number of items including
her favourite brand of tea. She has bought the same brand of tea for the last 18 years.
• Higher use of main media (television, radio, print media) advertising to build the brand
and to achieve top of mind awareness.
• The business case for the purchase has been completed and approved.
• The purchasing organisation's objectives for the purchase are clearly defined.
• The procurement process is agreed upon and it conforms with fiscal guidelines and
organisational policies.
• A budget has been estimated and the financial resources are available.
• A preliminary scan of the market place has determined that enough potential suppliers
are available to make the process viable (this can sometimes be achieved using an
expression of interest process).
• It has been clearly established that a competitive tendering process is the best method
for meeting the objectives of this purchasing project. If (for example) it was known that
there was only one organisation capable of supplying; best to get on with talking to
them and negotiating a contract.
• There is an old saying in industrial marketing; "if the first time you have heard about a
tender is when you are invited to submit, then you have already lost it."
• While flippant, the previous point illustrates a basic requirement for being successful in
competitive tendering; it is important to develop a strong relationship with a
prospective customer organization well before they have started the formal part of their
procurement process.
(more needed)
• Stage 1: Sell the appointment: Never sell over the telephone. The aim of the first contact
with a propsective purchaser is to sell the appointment. The reason is simple; industrial
sales are complex, any attempt to sell over the phone will trivialise your product or
service and run the risk of not fully understanding the customer's need.
• Stage 2: Understand their needs: The best method of selling is to minimise the
information about your goods or services until you have fully understood your
customer's requirements.
• Stage 3: Develop and propose a solution. The solution is (of course) developed from your
(or the firm that you represent's) product or service offerings.
3 a) Why do many firms use a family brand? What are the risks associated with this
strategy if a new product is sub-standard?
Family branding is a MARKETING strategy that involves selling several related PRODUCTS under one BRAND
NAME. It is contrasted with individual branding in which each product in a portfolio is given a unique identity
and brand name.
There are often economies of scope associated with family branding since several products can efficiently be
promoted with a single advertisement or campaign. Family branding facilitates NEW PRODUCT
INTRODUCTIONS by providing a 'foot-in-the-door' in potential customers' evoked set. When considering
purchasing a new type of product, potential customers will tend to evoke in their minds a product with a
familiar brand name. Being a part of this evoked set could lead to trial purchase, product acceptance, or
other advantages.
-1) Brand image of parent brand act as Differentiating factor for product in extremely competitive market.
-2) Extra cost of Brand creation is not required.
-3) Umbrella branding help to create dependent perception about product as parent Brand.
-4) Brands get abound in business.
-5) Umbrella branding helps to give positioning to product.
-6) Advertising and promotional efforts should be combined for all the products falling under family brand.
-7) New product launch become easier and cheaper.
- 8) New product find ready recognition and market set up.
b) Consider the following statement and discuss: “The only thing that channel
intermediaries do is to increase price for the consumer.”
4 a) Discuss the stages in New Product Development process giving suitable examples