Consumer Demand & Marketing Concepts PDF

Terms and Concepts Consumer Demand -​ Wants and needs Consumer -​ Is a person who uses a product Customer -​ Is a person who buys the product The two C’s of marketing Competitive: Other businesses they compete with us for consumer dollars -​ Direct: Other sellers of products similar to...

Terms and Concepts Consumer Demand -​ Wants and needs Consumer -​ Is a person who uses a product Customer -​ Is a person who buys the product The two C’s of marketing Competitive: Other businesses they compete with us for consumer dollars -​ Direct: Other sellers of products similar to ours -​ Indirect: businesses that offer different products or services but target the same customers as another business. Consumer: Characteristics of people who buy our products -​ Demographics: Age, Gender, family life cycle, income, ethnicity, & culture -​ Lifestyle: values, beliefs and motivations Product Life Cycle (traditional) -​ Refers to the period from the product’s first launch on the market, until it is finally withdrawn -​ No product can be in demand forever -​ Describes the changes in consumer demand over time -​ As trends, technology and lifestyles change, consumer demand also changes 5 stages -​ Introduction: This is where the product is placed on the market for the first time (no competition) -​ Growth: The product begins to establish a presence in the marketplace by word of mouth and advertising. Rapid sales, and competitors start to come -​ Maturity: The product reaches the peak of popularity and is well established in the market. Sales no longer increase and is at the same rate -​ Decline: Companies unable to find new customers for their product or service. Sales start to drop -​ Decision point: Company needs to decide whether or not it should withdraw the product from the market altogether, or modify it to new demands Fad: A product or service that became popular very quickly for a brief period, and then it becomes unpopular just quickly, vanishing from the marketplace. Ex: Fidgespinner Trend: Is a mass movement toward a particular style or value, and can result in a number of products that take on a traditional product life cycle Niche: A small section of the market dominated by a small group of products. Short growth, level maturity Seasonal: Consumers demand changes and it is affected by the weather or other repeating cycle. Marketers anticipate periods of high and low demand and work to create off season opportunities. Product Mix: Product: The product from the company, either a invention or innovation Price: What the price is going to sell at Promotion: Advertising, sales, promotion and publicity. Place: Where I am going to sell the product Marketing Strategies -​ Pull Strategy: Targets the ultimate customer; increase demand through incentives and promotions -​ Push strategy: Targets distributors, wholesalers, and retailers. Focuses on incentives that encourage businesses to stock and sell your product. Market Research -​ The systematic collection, analysis, and interpretation of information used to develop a marketing strategy or to solve a marketing problem Good and services -​ Industrial goods: Products used by other businesses to produce their products or to operate (Raw materials, processed goods, finished goods: logs, copper, apples turn into apple juice.) -​ Consumer goods: Products or services made for the general public (end user) (Cell phones, shoes.) Categories of Services -​ Industrial: Services performed for business; cleaning, machine turning or repair, information Technology etc -​ Consumer: Services performed for individuals consumers; house cleaning automotive repair Demographics: Age, Culture, Gender, income,Family life cycle Psychographics: Is a system for measuring consumers beliefs opinions and interests -​ Religious beliefs -​ Musical tastes -​ lifestyle Geographics: Where consumers live Consumer Motivation: Is the biological, emotional, rational, and or social force that motivates and directs behaviour Thorndike's Law of Effect: -​ Consumers are motivated to buy products that produce positive results -​ Avoid buying things that produce negative results Maslow's Hierarchy of Needs: Self actualization: Morality, creativity, spontaneity, problem solving, lack of prejudice, acceptance of facts Esteem: Self esteem, confidence, achievement, respect of others and by others Love/Belonging: Friendship, family, sexual intimacy Safety: Security of body employment, fo resources, morality, family health, property Physiological: Breathing, food, water, sex, sleep, homeostasis, exertion. Alderfer's ERG Theory: Consumers are motivated to fill 3 categories of needs -​ Existence needs: Gives us physical well being -​ Relatedness needs: Social relationships and interactions -​ Growth needs: personal growth and development Competition Perfect: -​ A large number of small companies -​ No market control Monopolistic: -​ A large number of companies -​ Differentiated products (slightly different but still substitutes) -​ A small amount of market control Oligopoly: -​ A small number of large companies -​ Exact/Differentiated products (not an important aspect to oligopoly) -​ SUBSTANTIAL amount of market control Monopoly: -​ One company -​ Unique product -​ Complete market control Direct vs Indirect Direct: The rivalry between producers and marketers of similar products for the same market segment -​ Pepsi and Coca-Cola -​ Reebok and Nike Indirect: The rivalry between companies that produce products that are different in substance but can be used for similar purposes (substitute products) -​ Plastic substituted for glass -​ juice substituted for pop Invention: New devices, methods, or processes developed from study or experimentation Innovation: This is a product or service that uses new technology, items or processes to: - Change existing products - Change the methods used to produce products - Change the ways used to distribute products Examples: computerized tax returns Product Development: 1.​ Generating Ideas: Come from a variety, creativity is essentials 2.​ Screening Ideas: Testings of consumer reaction and competitive situation in the market 3.​ Concept development: Consider a product's potential sales, costs, and production requirements. If consumers think the idea is a good one, a “prototype” is created. 4.​ Marketing strategy: Marketers develop a marketing strategy 5.​ Feasibility Study: Marketing, production, and finance developments assess whether or not the product/service is viable or profitable 6.​ Product Design: Includes product and its warranty, instructional manual, packaging and service information. 7.​ Testing marketing: Involves test trial and auditing of consumer reactions 8.​ Market Entry: Beginning of the product life cycle (Ch2). -​ This stage is also called commercialization. -​ Evaluating Customer Acceptance -​ The consumer will determine how long the product lasts. Utilities Form: The physical characteristics of a product (e.g., Powder vs liquid) Time utility: is it available when the consumer wants it? Place: Where the product or service is made available Possession: Value created by allowing easy transfer of a product's ownership Information: A product has value to a consumer only when the consumer knows that the product exists and what benefits it offers Positioning Positioning is where you are ​ In the mind of the consumer ​ Relative to your competition ​ You need to understand your position before you can develop your brand. Types of positioning 1.​ Benefit: Product is positioned as having more benefits than competitors 2.​ Target: Focus on a particular target market. Should be somewhat exclusive (people in the target market feel some sense of identity, uniqueness, not “mainstream”) 3.​ Price: EITHER position product as most expensive (high quality, luxury good) or least costly (good value). Luxury goods are more about status than quality 4.​ Distribution: Finding a unique way to distribute your products 5.​ Service: Provide extra service/convenience. Ex. 24-hr grocery store, greeters… Brand strategies 1.​ Brand strategies Strategies for a company’s existing products/services may require slight changes 2.​ Develop Brand Extensions Use established brand to create a similar product that capitalizes on the older brand’s success 3.​ Licence of a Successful Brand For a fee, one company’s brand appears on another company’s products 4.​ Co-brand Two or three more brands combine and cooperate for mutual benefit 5.​ Acquire a successful brand Acquire a company that is currently marketing a successful brand Packaging Refers to any container in which a product is offered for sale and on which information is communicated 1.​ Consolidation Packages should keep products together 2.​ Protection Packages are intended to protect products from damage 3.​ Information and labels A package should feature the name and address of the manufacturer or distributor -​ Product’s weight -​ Size -​ Pricing -​ The law requires that labels on food packages list the ingredients in the product and nutrition label -​ Extra info: storage instructions, health warnings, cooking instructions, recipes, coupons 4.​ Brand identification -​ Shoppers use packages to make purchasing decisions -​ Packages help identify the product inside 5.​ Promotion -​ Package may be the reason why a consumer purchases a product -​ Some can be reused after the original contents are used -​ Environmentally friendly packages are being demanded more and more by consumers -​ The “silent salesperson” Advantages of Market Research -​ Helps focus attention on objectives -​ Aids forecating, planning, and strategic development -​ May help to reduce the risk of new product development Disadvantages of Market Research -​ Information is only as good as the methodology used -​ Can be inaccurate or unreliable -​ The results may not be what the business wants to hear Secondary Research -​ Marketing research information that has been collected and published by others for the public to use -​ Information that has been gathered from sources that have been published or gathered previously -​ Books, the internet, consultants, databases Primary Data -​ Unanalyzed, current information collected by the researcher for a specific purpose -​ More detail can be specific to what you need to know -​ More expensive and time-consuming to collect and analyze Two types of research 1.​ Qualitative Research - Research about how people feel towards or think about product (opinions, anecdotes) 2.​ Quantitative Research - Research based on data taken from surveys or figures based on a sample of the target market Product Planning -​ Involves making decisions about those features that are needed to sell a business products, services, or ideas Product Mix -​ Includes all the different products that a company makes or sells Product line -​ A group of closely related products manufactured and or sold by business Product Item -​ A specific model brand, size, or product within a product line Product Depth -​ The number of product items offered within each product line Prototype: An initial model of a product used to test and refine its design, functionality, and usability before full production.