Marketing Phase 1 Video Notes PDF

Chapter 1 Ch1 Video 1 - What is Marketing? - Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, p...

Chapter 1 Ch1 Video 1 - What is Marketing? - Marketing is 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. - The primary focus is on satisfying customers’ needs and wants. And, customer wants backed by buying power creates demand. - Marketing is not personal selling and advertising. - Marking is a process by which companies engage customers, build customer relationships, and create customer value in order to capture value from customers in return. - Marketing Requires: - A market (set of actual and potential buyers) - A market offering (products, services, ideas, people) - An exchange between two willing parties - Overarching Marketing Process - 1: Understand the marketplace and customer needs and wants - Done through marketing research - Who is the market? - What are the customer needs, wants and demands? - What can we offer to meet needs and wants? - 2: Design a customer value-driven marketing strategy - Who are we going to serve? - What is our value proposition? - Differentiate our product offering from others in the marketplace - Have to divide the market, as different groups within the market have different needs - 3: Construct an integrated marketing program that delivers superior value - Product - Price - Place - Promotion - 4: Engage customers, build profitable relationships, and create customer delight - Customer relationship management (CRM) - Partner relationship management - Must maintain relationships with customers to retain value for end consumer - 5: Capture value from customers to create profits and customer equity - Create satisfied, loyal customers - Capture customer lifetime value - How much a customer is worth to the company over their lifetime. - Increased share of market and share of customer Ch1 Video 2 - Organizing philosophies - Organizations follow different managerial philosophies to drive their marketing processes and decisions - Core marketing concept philosophy: companies exist to satisfy customer wants and needs, and aim to deliver desired satisfaction better than the competition in order to meet organizational objectives - Production philosophy: - Focus on production: produce the most for the lowest cost - May work well when demand exceeds supply - Many commodities, energy generation - Used when economies of scale are important - Have to grow large very quickly - Product Philosophy - Focus on producing the highest quality goods - Apple - Companies can fall into a trap if they do not consider what consumers are willing to spend, how big the market is for this specific product, etc. - May not be able to meet organization needs (not able to sell enough volume to be profitable) - Focused on a particular product/niche, will find niche by producing the best product that you can - Sales Philosophy - Emphasizes pushing product and hard selling - Wants customer to buy large amounts of product - Most post-college sales jobs are NOT with organizations that subscribe to this philosophy - View the marketplace as not knowing about their product, so they have to go intensive outreach to potential consumers - Life insurance (remind customers that they can die) - Products don’t want to think about, this philosophy can be useful for the organization - Marketing Philosophy - Achieving long term goals for the company by best serving customers’ needs and wants - Reminder about need to segment your market and target a specific subset of consumers - Societal Philosophy - Not only taking in customers wants and needs/company profit, but taking in additional stakeholders. - Can be done while still earning profit - Triple Bottom Line - People  - Additional stakeholders (people that live near a factory, etc.) - Planet - Whatever the company does is done in an environmentally friendly way. Part of the company’s organizational mission - Better than industry average - Profit - Must make a profit to have a company that follows societal philosophy. - If no profit, you are a nonprofit to survive - Commitment to environmental sustainability, equality can be used in advertising - Some consumers are willing to pay higher prices for goods that are produced sustainably - Triple bottom line applies to companies (NOT nonprofits) - Can be used in promotional strategy Ch 1 Video 3 - Value through 4 P’s of Marketing - What is Value? - The relationship of benefits to costs. It’s what the consumer gets for what he/she gives. (Value = Benefit / Costs) - Product = Creating Value - Goods, services, ideas, created for exchanging (your marketing offering) - Price = Capturing Value - What price are you willing to pay so that you are satisfied with your purchase AND what price generates a reasonable profit for the company? - Place = Delivering Value - Where and how products are made available, retailing decisions - Disneyland vs Grocery store example - Getting the product to the customer when and where they want it in the way that they want it (delivering value) - Promotion = Communicating Value - How to communicate to the right audience through the right medium at the right time the right benefits to get attention, interest, desire, and action - How we tell customers about our benefits, production - Customer Satisfaction - Customer’s EVALUATION of the extent to which a product or a service has met their EXPECTATIONS - If a customer has low expectations and deliver mediocre result, will be okay. Mediocre service with high expectation will lead to disappointment - Depending on expectations, customers may be satisfied or dissatisfied - Dissatisfied customers will leave - But.. satisfied customers MAY also leave as well - Airline example (go with the cheapest airline as the product is very similar) - Relationship Marketing - Goal: Develop and enhance long term relationship with customers - Increase the number of POSITIVE interactions with customers - Common with B2B selling (take them to lunch, football game, etc.) - In B2C, this can include rewards programs and freebies for loyal customers - Role of Marketing in Business - Marketing is the main part of an organization that interacts with customers (plays an important role) - Think about people outside of the company consistently - Under the organization, market, and customers’ needs and wants - Act as intermediary between the organization and the market: - Gather information - Translate into organization and disseminate  - Respond to opportunities with 4P decisions - Take information to the market to the company to new ideas about how to better serve customers, new products, etc. - Manage customer relationships in a way that creates long term competitive advantage, generates consumer loyalty and retention, grows the share of customer, and builds customer equity - If you service customer well in one area, you can get customers to buy your other products/offerings - Marketing Process in Practice - Marketing is a messy discipline- there’s no right answer for a problem/opportunity - 1: Situation Analysis: Internal, External, SWOT - 2: Objectives - 3: Marketing Strategy: S-T-P and Marketing Mix (4Ps) - 4: Implementation: Costs, Timeline, Tasks - Changing Marketing Landscape - Marketing not a static discipline, requires change in response to external forces - Social media, online advertising, children using devices - What does the market need? How do changes in the world affect the marketplace?  Chapter 2 Ch 2 Video 1 - Strategic Planning - The process of creating and maintaining a fit between the organization's objectives and resources and the changing market opportunities - Ansoff’s Matrix - Market Penetration: Additional things to boost sales - Discounts, better distribution, new retail channel partners - Product Development: New Products to serve current customers - Market Development: Expanding existing products to new demographics, countries, etc. - Diversification: New markets penetrated with new products - Women’s fashion company creates men’s clothing for male demographic - Common when we see attractive markets we would like to enter - If a specific space becomes less profitable, diversification can be safe Ch 2 Video 2 - Strategic Business Unit (SBU) - Independently operated divisions that make up a parent company - Many companies are “conglomerates” made up of several different business units - Companies need to decide which SBUs to invest in and which to divest/cut - BCG Growth Matrix Strategies - Invest - Invest to increase market share - Ignore current profitability - (Question marks / Problem Children and Stars) - Hold - Preserve current profitable market share - (Cash Cows) - Harvest - Extract as much profit as possible before eliminating - (Dogs) - Divest - Sell or withdraw from market - (Question marks / Problem Children and Dogs) - Companies start out with low market share, but see high potential growth rate (? Question mark category) - Question marks require a lot of investment, and to capture as much market growth as possible - After investment, hope is that question marks become stars - Eventually, market growth rate tapers off, but hopefully maintain market share while reducing expenses (cash cow) - Negative market growth rate may occur at some point, which may make business not profitable any more. May want to divest in these businesses at this point. Hold on to business as long as they are profitable (do not require significant cash investment) - Once Dog is not longer profitable, then divest - Strategic Planning - Portfolio Matrix by GE - Has more levels and different axes compared to BCG - Axes are Business Position (x) and Market Attractiveness (y) - Strategic Moves - Low = Harvest / Divest - Med = Cautiously Invest - High = Invest / Grow Ch 2 Video 3 - Marketing Plan - Outlines the marketing strategy and tactics - Strategic/Strategy - Long term with a broad focus - Tactical - Short term with a narrow focus - You use various TACTICS in order to enact your strategy - Business Mission - What business is the company in? - Too narrow -> Won’t survive market changes - Too broad -> Meaningless - Horse and buggy vs Transportation example - SWOT Analysis - Strengths, Weaknesses, Opportunities, Threats - Strengths and Weaknesses are internal - Opportunities and Threats are external - SWOT Table categorizes in bullet point form ALL the key points form your preceding internal and external analysis - Your SWOT Analysis discusses the key/major points within each section, why you categorized them as a S-W-O-T and argues why these are significant insights for your company’s current state and for your plan to move forward - Look at both internal and external analysis (both positive and negative) - Marketing Strategy - STP (segment, targeting, position) - WHO will be your target customer (S&T) - HOW will you be different (and superior)? (P) - WHAT will you offer and at WHAT price? - WHERE will you offer your good/services - HOW will you communicate about your company/goods/services to your target customer? - Business Objectives - Realistic, Measurable, Time Specific, Benchmark Comparison - Increase market share - Increase sales - Increase site visits/social media engagement - Increase target market awareness - Increase foot traffic in stores - Implementation and Control - How well did we do in achieving our goals? - Review the mission and objectives to assess marketing plan objectives - Revise mission and objectives if marketplace changes  Chapter 3 Ch 3 Video 1 - Ethics - The principles and values that govern conduct of an individual or group - Tend to vary from person to person - Can be influenced by membership in subgroups within a population - May not be written down - Laws - Rules which a particular country or community recognizes as regulating the actions of its members and which it may enforce by the imposition of penalties - Apply to everybody in society - Written - Actions can be LEGAL but seen as UNETHICAL - …and vice versa - Personal Ethical Development Levels - What Can Companies Do? - Create a Company Code of Ethics - Helps align short term goals of employees with long-term goals of the firm - Helps identify acceptable business practices - Helps control behavior internally - Avoids confusion in decision making - Facilitates discussion about right and wrong Ch 3 Video 2 - Sustainability - Practices that focus on the long-term effects rather than short-term profits - Sustainable Marketing - Socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs  - Communicating a business’ efforts at sustainable business practices - Triple Bottom Line - People - The social equity bottom line - Planet - The environmental bottom line - Profit - The economic bottom line - Corporate Social Responsibility (CSR) Pyramid - Cause Related Marketing vs Corporate Political Advocacy - Cause Related Marketing - Involves a monetary or in kind donation to a cause - Less risky/controversial - Practiced for quite some time - Corporate Political Advocacy - Involves publicly taking a stand on a socially / politically divisive issue - Does not require donation - Very risky - Newer phenomenon Ch 3 Video 3 - Green Marketing - Focuses on the environmental aspect of sustainable business practices - Many consumers are willing to pay more for “green” (environmentally friendly) products - Green Washing - Comes from consumers being willing to pay more for products that are sustainably produced - Deceptive marketing that makes products seem more environmentally friendly than they actually are - Often seen in food (unregulated) - “Better for you, better for the planet” - Green Certifications - LEED - Certification for green buildings - Energy Star - Certification for consumer electronics and appliances - USDA Organic - Certification for foods, beverages, and other consumer products - Consumers are willing to pay more for products - Help verify that green washing is not taking place - Green Marketing Actions - Reduce packaging - Ikea flat packaging - Increase recycled content - Improve logistics - Improve durability and longevity of products - Repair products  Chapter 4 Ch 4 Video 1 - Marketing Environment - An environmental factor is anything that satisfies two conditions: - It has a significant impact on the company - The marketer has very little control over it - Strategic planning and analysis - Used to learn about the current conditions of the marketing environment - Companies need to consistently “scan” the environment - Social Factors - American Values (Social Factors Concerned with Culture) - Self-sufficiency - Upward mobility - Strong work ethic - Equality (under the law) - How are these different from key social values in China (Communal), Denmark (Socioeconomic Equality), Uganda, and Mexico? - Social Media - Consumers increasingly live online - Changing behavior - Socialization - Purchasing - Interacting with brands - Social media managers will react to customer’s comments/feedback in real time, helps engage in two way conversation with consumers Ch 4 Video 2 - Demographic Factors - Demography - The study of vital statistics like - Age - Gender - Household size - Income - Ethnicity - Population Growth - Important implications for consumer market - Composition of consumer age groups - Children - Material Parenting - Rewarding children with products, and punishing by taking them away - Nag Factor - Child influencing purchase decisions by incessant bothering of parent - Parental Yielding - “Surrendering” to a child’s request - Strong Attachment to Media Characters - DisneyBaby.com: “to get that mom thinking about her family’s first park experience before her baby is even born is a home run” - Tweens - Between a child and a teen - Ages 9-12 - Creating separate identity from family - Increasing brand consciousness - Struggle with lack of autonomy/agency - Increased mobile usage - Teenagers - Four basic conflicts among all teens: - Autonomy versus belonging - Rebellion versus conformity - Idealism versus pragmatism - Narcissism versus intimacy - Seniors - Seniors are a more important market segment than many marketers realize - People older than 60: fastest growing age group on earth - Control more than 50% of discretionary income - Consumer identity resistance: revived vs. emergent - Age Cohorts - We have many things in common with others because they are about the same age - Generation Categories: - Silent Generation - Baby Boomer Generation - Care about health, wealth, quality - Most economically powerful age segment - Highest disposable income - Consumers born between 1946 and 1964 - “Baby Boom” after WWiI - Active and Physically fit - Currently in peak earning years - Food, apparel, and retirement programs - “Midlife crisis” products - Generation X - They are anti, busy, and cynical - 46 million Americans born between 1965 and 1980 - Both values oriented and value oriented - Desire stable families, save portion of income, and view home as expression of individuality - Creators of many culture changing products (Google, Youtube, Amazon) - Generation Y - They’ve grown up with technology - Born 1980-1996 - Make up one-third of US population - Spend $170B a year - Frist to grow up with computers in their homes - Factors Shaping Gen Y - Economy - Overeducated, Overemployed - Graduated into Great Recession - Globalization - eager to experience other cultures - 9/11 Occurred while in school - Social Media - constantly open to public observation because every new post reveals something about themselves - Exuberants - constantly post about their experiences - Collectors - passively absorb other’s experiences - Generation Z - They are born digital (smartphones, internet) - Kids born in late 1997-2015 - Most diverse generation - “Digital Natives” Ch 4 Video 3 - “Big Three” American Ethnic Subcultures - 1. African Americans - 2. Hispanic Americans - 3. Asian Americans - Increased use of multilingual signage and advertisements - Increased diversity in media - Products, services, and retailers targeting ethnic consumer segments - Economic Factors - Income - Total Income ≠ Discretionary Income - Discretionary income is the money that consumers have left over after paying for necessary expenses such as taxes, housing, utilities, groceries, transportation, and debt - Purchasing Power - Cost of living varies by location - Housing, groceries, healthcare, education costs, etc. - Large impact on discretionary income - Inflation - Decreases purchasing power - Target inflation is about 2% - Recession - Economic growth is cyclical - Recession is when economic growth is negative for two consecutive quarters - Consumers and businesses cut spending - Technological Factors - Types of Research - Basic - Discovery of new knowledge for humanity - Often conducted at universities with government funding through grants - Applied - Develop practical uses for new technology - Usually conducted by companies to make new products - Culture of Innovation - An environment that supports creative thinking and advances efforts to extract economic and social value from knowledge, and in doing so, generates new or improved products, services, or processes - Vital in competitive markets of advanced economies - Established companies often have to compete with new technologies. Innovate or die - Political and Legal Factors  - Must be aware of laws and political environment - Breaking laws leads to fines or worse - Can vary drastically by locality - Laws and requirements are constantly being updated - Political environment could lead to changes in laws - Example: EPA fuel efficiency requirements - Large Companies / Industries can influence through lobbying - Competitive Factors - Companies keep close tabs on competitors - Competitor moves tend to have the most immediate effect on companies - Cut price - Launch new product - Enter market - Globalization - Competition for customers and resources is global - Causes competition to become more intense and disruptive - Puts more pressure on industries, companies, and workers - BUT Increases value for customers  Chapter 5 Ch 5 Video 1 - Global Marketing - Use Global Marketing to understand, adapt, and serve markets in several countries - The phrase global marketing is fairly recent - The post-WWII era brought unparalleled expansion by companies going outside their home markets - Today companies go global to survive as competitors will enter the home market with lower costs, more experience and better products - Forces Affecting Global Integration and Global Marketing - Multilateral trade agreements - Transportation and communication improvements - Converging market needs and wants and the information revolution - Product development costs - Pharmaceutical example: market needs to be large enough to justify huge R&D costs - Globalization and Multinationals - Competition for customers and resources has gone global - Generally increasing value for consumers - Lower prices - Better quality - More choices - Generally putting more pressure on industries, companies, and workers - More competition - Pressure on less competitive domestic industries and small companies - May struggle without economies of scale or government support - Main reason why some people are against globalization - Importance of Global Vision - Improve efficiency - Access larger markets - For US companies, 75% of total world market for good and services is outside the country - Coca Cola earns 75% of operating income and ⅔ of profit outside of North America - For Japanese companies, 90% of world market is outside the country - 94% of market potential is outside of Germany for its companies even though it is the largest EU market Ch 5 Video 2 - Cultural Factors - Each country has its own culture - This includes commonly shared traditions, values, and preferences - Some have many subcultures - Language is a major part of culture - Proper translation is vital - Religion impacts consumption - Islam: No pork, no alcohol - Hinduism: No beef - McDonalds example: had to pivot from beef - Brands often tied to country of origin - Belgian chocolate, Swiss watch - Manufacturing outside of COO can dilute the brand - Economic Factors - Exchange Rates - Flucutuation expose companies to “currency risk” or “foreign exchange risk” - Companies use hedging to minimize this risk - Current contracts/execute contract before everything is delivered - Denominate contract in their home currency - Purchasing Power - Most people in the world have lower purchasing power than in the United States - Marketers need to be sensitive to differences in purchasing power in global markets - Willing to purchase value priced products - To reduce pricing, manufacturers can - Reduce package size - Example: Oreo cookies (individually packed, Chinese customers purchase smaller quantities at a time) - Eliminate features - Example: Nokia phone - Political and Legal Factors - Preferential Trade Agreements - Free Trade Agreement - Customs Union - Common Market - Economic Union - Tariffs - “Taxes” on imports - Make domestic products more competitive(cheaper) by comparison  - Boycotts - Complete prohibition of certain types of products from certain countries - Can be retaliatory or based on quality/safety concerns - Quotas - Specify total quantity of a product that can be imported from a country or region Ch 5 Video 3 - What Strategy Should Be Used? - Depends on: - Vision - Attitude toward risk - Available investment capital - How much control is desired - Exporting - Selling goods produced in one country in another country - Lowest risk option to go global - Limited opportunity for consumer feedback - Expenses and barriers such as shipping and tariffs - Licensing - A contractual agreement whereby one company (the licensor) makes an asset available to another company (the licensee) in exchange for royalties, license fees, or some other form of compensation - Patent - Trade secret - Brand name - Product formulations - Worldwide sales of licensed goods totaled $241.5 billion in 2014 - Disney is the world’s top licensor - Tokyo Disneyland is owned and operated by the Oriental Land Company, but licenses IP from Disney - Franchising - Special form of licensing - “Buying a franchise” - Contract between a parent company-franchisor and a franchisee that allows the franchisee to operate a business developed by the franchisor in return for a fee and adherence to franchise-wide policies - Used by the specialty retailing and fast food industries - Joint Ventures - Entry strategy for a single target country in which the partners share ownership of a newly-created business entity - Shared investments and rewards  - Builds upon each partner’s strengths - Especially important if local expertise needed - Examples: Budweiser and Kirin (Japan), GM and Toyota, GM and Daewoo in S Korea, Ford and Mazda, Chrysler and BMW - Required in China - Direct Investment - Highest risk, highest potential reward - Greenfield Investment - Start up of new operations - Should only be attempted in very attractive markets with similar conditions to the home country - Acquisition of an existing enterprise - Roche acquired Genentech in 2008 for $43B - Tata acquired British automakers Jaguar and Land Rover Ch 5 Video 4 - Standardized - Product-Communication Extension - May be very profitable, simple - Almost no adaptation - Same advertising and promotional appeals - Used with B2B or industrial products - Apple iPhone - Loctite adhesives - Microsoft Windows 7 - Promotion Adaptation - Products may serve the same or different needs in different markets - No product changes reduce manufacturing expenses - Costs in market research advertising, sales promotion, point of sale material - Examples - Jagermeister seen as “cough medicine” in much of Europe and party drink in USA - Ben & Jerry’s changed packaging color in the UK - Many products have different brand names in different countries - Adapt the product to local use but the message stays the same - Coca Cola in Mexico uses sugar, but HFC in the US - Car manufacturers make the same models with left-hand drive for US and EU and right-hand drive for UK and Japan - Oreos reduced the sweetness of the cookies for Chinese taste preferences - Technically a “new product” that requires changes in manufacturing for individual markets - Production Invention - Dual Adaptation - Both may need to change for legal, cultural or other environmental reasons - Regional managers may simply act independently - McDonald’s had to create several entirely new products for the Indian market - Global Place - Shoppers in other parts of the world prefer different types of shops - Tradition - Transportation - Supplier relationships  Chapter 6 - Consumer Decision Making Process - Need recognition - Information search - Evaluation of Alternatives - Purchase & Post Purchase Behavior - Need vs Want - People often buy products not for what they do, but for what they mean - Need - Something you must have to live or achieve a goal - A gap between a desired state and the actual state - Want - Specific manifestation of a need that personal and cultural factors examine - Examples: - I need food, but I want a steak - I need transportation, but I want a Tesla - Need (or Want) Recognition - Internal Stimulus - Your stomach growls and you realize you need to eat - External Stimulus - You smell In N Out and now you want a Double-Double Animal style - Information Search - Information Searches - Internal - Personal Experience, preferences, tastes - External - Websites, friends, advertisements - Evoked Set - What brands come to mind immediately when thinking of a category or how to solve a problem - Consideration Set - Set of options considered for purchase - Can be expanded from evoked set through information set - Inclusion in evoked set does not necessarily mean it will be in the consideration set - Well known but disliked brand - Evaluating Alternatives - Fischbein Model - Multi-attribute model of consumer attitude towards brands - Weights importance of attributes and belief of level the brand has that attribute - Disjunctive Model  - Focus on just a few important attributes - Eliminating options that don’t meet specifications - Example: Needing a car with 7 seats (filter out all cars with less than 7) - Purchase & Post-Purchase Behavior - Purchase Evaluation - Does the purchased solution function as imagined? Better or worse? - Unexpected post-purchase evaluation can lead to Cognitive Dissonance - Requires re-evaluation of brand (or self) - Can be good or bad - New favorite - Buyer’s remorse - Post-purchase programs - Evaluate customer satisfaction - Satisfied customers more likely to be repeat customers - Not always a guarantee - Useful feedback about product offerings Ch 6 Video 2 - Extensive Decision Making - Extensive information search - Input from a variety of sources - Pros vs cons - Spreadsheets - Consumers are most likely to use for products with: - High social visibility - High involvement cost - Products tend to be - Unfamiliar - Expensive - Infrequently purchased - Limited Decision Making - Limited Information Search - Moderate amount of time to learn about unfamiliar brands within a familiar product category - Products tend to be - Familiar category/Unfamiliar brands or models - Mid-range purchase - Common, but no frequently purchased - Example: Clothes, Jeans, Suit - Routine Response Behavior - No information search  - Almost automatic - Consumers are most likely to use for products with: - Low social visibility - Low involvement cost - Products tend to be: - Familiar - Inexpensive - Frequently purchased - Example: Oats, Cleaning Supplies Ch 6 Video 3 - Significant Factors the Impact Consumer Decision Making - Cultural - Social - Individual - Psychological - Cultural Factors - Culture - Often associated with a nation - Set of values, norms, attitudes - Values are enduring beliefs - Norms are the way things are done - Attitudes are learned responses towards a given object - Subculture - Like Culture.. But smaller - Product / brand cultures - Politics and religion - Region and language - Style / music - Social Class - A group of people with similar income and status that share behavioral norms - Social Factors - Reference Groups - Primary - People you know and interact with often - Secondary - Aspirational - People and groups you want to be like - Non-aspirational or Dissociative - People and groups you don’t want to be associated with - Opinion Leaders - People whose opinions about something have a big influence on the opinions of others  - Can be primary or aspirational - Family - Very influential - Most basic unit of society - Individual Factors - Individual Influences - Age - Life-cycle Stage - Single, Married, Parent, Grandparent - Gender - Personality - Self Concept Ch 6 Video 4 - Perception - Selective Exposure - Noticing certain stimuli while ignoring others - Can be primed to notice or seek info - Selective Distortion - Twisting information that conflicts with existing feelings or beliefs - That’s “fake news” - Often in response to cognitive dissonance - Selective Retention - Only remembering information that supports existing beliefs - Includes motivated forgetting and drives nostalgia - Psychological Factors - Motivation & Maslow’s Need Hierarchy Psychological Factors - Learning and Experiential Learning  - Learning - Occurs when consumers retain new information about a product, service, or brand - Can be primary or secondary - So and so said - Experiential Learning - Occurs when consumers get first hand experience with a product, service, or brand - Free trial, taste test, test drive - Psychological Factors - Beliefs and Attitudes - Beliefs - What the consumer “knows” about a given object - Cognitive and can be changed with facts - Attitudes - Learned responses toward a given object - Emotional / relational and require more work to change - Companies should try to change Beliefs then Attitudes  Chapter 7 Ch 7 Video 1 - B2B Marketing - B2B vs B2C - A product can be classified as part of the business market or consumer market depending on its intended use - A lot of business consumptions takes place while producing a consumer goods - Selling to customers other than end users - Producers / Manufacturers - Use raw materials as components for their end product - Resellers - Retailers, whole sellers, and distributors - Do not really change product - Government - US Government is single largest customer - Institutional - Non-profits, hospitals, education - B2B is about twice a big, but hidden from consumers - B2B Marketing - Fewer customers; larger customers - Part of why Personal Selling is so important in B2B marketing - Geographically concentrated - Clusters of innovation like Hollywood and Silicon Valley - Shorter Channels - More likely to deal directly with producer representative - Demand - Derived  - Demand for raw materials used for production are based on demand for producers and product - Demand for drywall is derived from demand for new and remodeled buildings - Inelastic - Demand does not change due to fluctuations in price because demand is derived - Home builder will pay what they need to for drywall in order to complete a house - Fluctuating - Changes in demand for end products have an exaggerated effect on demand for raw materials - All home builders are fighting for drywall at exactly the same time Ch 7 Video 2 - Types of B2B Products - Major and Accessory Equipment - Tools and machinery needed to complete production - Manufacturing machines and replacement parts - Raw and Processed Materials - Intermediate goods used to produce finished goods - Lumber, copper, rock gypsum, flour - Component Parts - Semi-finished goods used by producers - Auto parts, computer processors - Supplies - Used for operations, not producing end products - Printer paper, ink, pencils, etc. - Business Services - Outsourced business functions - Accounting, legal, carpet cleaning - Types of B2B Purchases - New Buy - New product or new vendor - Requires a lot of research - Finding a provider for fleet vehicles - Modified Rebuy - Based on previous orders with established vendor - Some modifications - Ordering new fleet vehicles from established vendor - Straight Rebuy - No modifications to previous orders - Monthly internet service, office supplies, stock orders - Buying Centers - Members of an organization involved in B2B purchasing process (usually for New Buys) - Initiators - First see need for the product - Users - Will actually be using the product - Influencers - Experts that improve buying decision - May not actually use product - Gatekeepers - Controls access to decision makers - Purchasers - Interfaces with vendor - Decision makers - Make final purchasing decision