UNIT 3 Strategic Marketing PDF

UNIT-3-STRATEGIC-MARKETING-.pdf andreeafdeez Estrategia de Marketing 2º Grado en Comercio y Marketing Facultad de Comercio, Turismo y Ciencias Sociales Jovellanos Universidad de Oviedo Reservados todos los derechos. No s...

UNIT-3-STRATEGIC-MARKETING-.pdf andreeafdeez Estrategia de Marketing 2º Grado en Comercio y Marketing Facultad de Comercio, Turismo y Ciencias Sociales Jovellanos Universidad de Oviedo Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6556640 UNIT 3 STRATEGIC MARKETING: CONSUMER MARKETS 0. TWO PRELIMINARY QUESTIONS - What is a consumer market? o All of the personal consumption of final consumers (personal consumption: when someone that buys whatever to use for its own value and without incorporating it to any production process) o Difference with an industrial/institutional/organizational marketing In those business marketing, whatever is bought, goes into a production process to make something you can buy. - What is consumer purchase behavior? o The buying behavior of final consumers, individuals, and households, who buy goods and services for personal consumption Metrics online stores: how do you get users? Organic search: you search in google for it. Paid search: when you search in google and there are ads (anuncios que salen los primeros cuando buscas). At what time? If you send a newsletter, or a push notification, or something similar, you might find that information quite interesting. 1. CHARACTERISTICS AFFECTING CONSUMER BEHAVIOR A model of consumer behavior. The environment Buyer’s black box Buyer responses Marketing stimuli: Other: Buyer’s characteristics Buying attitudes and preferences product economic buyer’s decision purchase behavior: what the Price technological process buyer buys, when, and how much promotion social brand and company relationship place cultural behavior CULTURAL SOCIAL PERSONAL PSYCHOLOGICAL Culture Reference groups Age and life cycle stage occupation Motivation BUYER Subculture Family perception economic situation lifestyle Learning Social class Roles and status beliefs and attitudes Personality and self- concept Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6556640 CULTURAL FACTORS CULTURE: the learned values, perceptions, wants, and behavior from family and other important institutions. E.g., when it’s cold, in Spain we will have a coffee, and in UK you will have a cup of tea. SUBCULTURES: groups within a culture with shared value systems based on common life experiences and situations. It can be in a very small level, such as urban tribes (gothic, sporty, etc.) SOCIAL CLASS: society’s relatively permanent and ordered divisions whose members share similar values, Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. interests, and behaviors. Discussion: which are the antecedents of (how can we determine) social class? Occupation, income, neighborhood, educational level, wealth. consequences: hobbies. People spend their money in different ways; social classes behave differently, so we have to do different value propositions for them. Red Bull offer appeals to higher classes than Monster. Heinz ketchup: in every UK house there is one, and on top of that it is quite expensive for what it is, and still customers are willing to buy it. That is really a business. A plumber and a lawyer belong to different social classes, although it’s probably that the plumber makes more money. Customers from the same social class normally behave the same, but it is hard to tell who belongs to each social class. SOCIAL FACTORS REFERENCE GROUPS: - They influence our behavior - Primary of secondary, depending on how often we are with our group of reference. Primary: very frequent. Formal (rules are very clearly identified, even written) vs. informal (rules aren’t written, but everybody knows them). Nacida para sacar matrículas, experta en tener que matricularme tres veces de lo mismo - coches.net Estrategia de Marketing Banco de apuntes de la a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6556640 - New kid on the block? Social networks. You want to be like someone, and you change your behavior to try to be like them (also happens on the Internet) e.g., adidas superstar Membership groups Aspirational groups Reference groups Groups with direct Groups an individual Groups that form a comparison or Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. influence and to which a wishes to belong to reference in forming attitudes or person belongs behavior e.g., class: silence vs talking. Decide what’s acceptable behavior. We compare ourselves to what we see, to learn what is acceptable Opinion leaders: you really trust and admire; you aspire to be like them. E.g., Federer-Rolex - Reference (skills, knowledge, personality) on a reference group - They influence our behavior - Brands try to get them as ambassadors. FAMILY: it is the most important consumer-buying organization in society o Family of orientation (family we grow up in; we learn how to behave and how to consume). o Family of procreation (family that you form; the influences are different: it introduces a new idea: household (not individual) purchases with joint decisions (car, vacations, apartment…) Consumer buying roles within the family: o Initiator o Influencer o Decider o Buyer o User Individual purchase: I buy a sweater; I am all the above. If I go with my wife, and she says that she likes it, etc., she is the influencer. When you buy a present, you are solving your own need, it is a social need, maybe you are obliged to. This affects very much what you buy: you are trying to show (true or fake) appreciation, and how much you care, so perhaps you will buy a different product for a gift than for yourself. The fact than you are giving something that is useful, doesn’t mean that you solve their need, but yours. You start the process; you recognize the need; it’s you. PERSONAL FACTORS AGE AND LIFE CYCLE STAGE we don’t behave the same at every age. o Young: singled, married without children, married with children, divorced with children o Middle aged: single, married without children, married with children, married without dependent children, divorced without children, divorced with children, divorced without dependent children. o Elder: older married, older unmarried. Nacida para sacar matrículas, experta en tener que matricularme tres veces de lo mismo - coches.net a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6556640 Financial life cycle (scheme) OCCUPATION: o Blue collar — white collar Decades ago: working class typically wore blue, and white colors corresponded with office jobs. These words are not useful anymore. ECONOMIC SITUATION Companies react in different ways. Rolex, before crisis 400€, now, more like 800€ because they discovered than the more expensive it was, the more exclusive it was, consumer of Rolex were not affected by the price. they launched a good watch for average class (Tudor) to make it affordable 200€, the problem is that it was so successful that prices rose to around 400€. Burberry trench. Economic situation is really important. LIFESTYLE: a person’s pattern of living as expressed in his/her activities, interests, and opinions. Lifestyle classifications: o SRI VALS (values and lifestyles) (9 categories) o SINUS GmbH: ▪ Basic orientation: traditional (to preserve) ▪ Basic orientation (materialist (to have)) ▪ Changing values: hedonism (to indulge) ▪ Changing values: postmaterialism (to be) ▪ Changing values; postmodernism (to have, to be, and to indulge) Traditional values: hard work, thrift, religion, honesty, good manners and obedience. Material values: possession and need for security. PERSONALITY: unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment. Group of traits (rasgos). o Self-confidence o Dominance o Sociability o Autonomy o Defensiveness o Adaptability o Aggressiveness. o Etc. SELF-CONCEPT: how do we see ourselves (actual self-concept); how would we like to be seen by others (ideal self-concept). PSYCHOLOGICAL FACTORS MOTIVATION: a need becomes a motive when it is aroused (we become aware of them) to a sufficient level of intensity. The need of energy is always there, but when we perceive hunger, we become aware of it. The battle between Freud and Maslow. Pyramid: there are more important needs than others. 1,2 primary. Convertible: could be safety, self-actualization, cognitive… PERCEPTION: process by which people select, organize, and interpret (everything that comes to our senses) information to form a meaningful picture of the world from three perceptual processes. The final decisions would depend on how the customer perceives the product. Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6556640 key concepts: o Selective attention: it is difficult to perceive something that you are not paying attention to. It is very difficult to sell to customers that don’t know you. We select to what pay attention: we don’t have the time to pay attention to everything (I don’t pay attention to your laptops, but the stimuli are there). SIMONS 1999 ATTENTION TEST SEARCH o Selective distortion: “tendency to interpret information according to the beliefs or perceptions that you have rooted” how do we know we all see the same blue? When our Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. brain identifies strawberries, it sees it red, despite it is actually green. When you engage with a brand, the perception will be distortion. Attitudes towards brands act as a filter. That is why many brands do public relations. o Selective retention: “tendency to remember information that best connects with our needs, beliefs, interests and values”. If you see a trailer about a film about dogs, you will remember it better if you like dogs than if you prefer cats. LEARNING: change in an individual’s behavior arising from experience and occurs through interplay of: drives, stimuli, cues, responses, reinforcement. The process of learning: a. A friend invited us for dinner at his/her place o Damn! I should provide something for dinner. (that’s a drive) b. While reading the newspaper: o Look! There’s an article about a wine called Luis Cañas Crianza 2009 that has been named “Wine with the best QPR in the world” by The Wine Advocate (That’s a stimuli) c. In the shop: o You don’t find the aforement wine, but you start looking at other bottles of wine, and pay attention to words as “Rioja”, “Crianza”, “Reserva”, etc. (Those are cues (pistas)). d. You purchase: o One bottle of Herencia Remondo La Montesa 2009 (that’s your response). Maybe you don’t buy, and that is your response too, but with that response, your learning process is finished. e. You provide o The wine for the dinner and everybody loves it. (Your behavior has been reinforced). There can also be negative reinforcement, e.g., if nobody liked it. BELIEFS: a descriptive thought that a person has about something based on knowledge, opinion, or faith (nothing). Some knowledge that you associate with an object (a brand, a product, a class). Beliefs connect very well with attitudes. Many consumers think that Apple is cool, (what is cool? How can a device be cool?) but many people think that, so that’s enough. Attitudes simplify. I like Logitech, and, although I can find cheaper options, the next time I need something, I will search directly in Logitech, so I will not go through the process of searching for the perfect product. ATTITUDES: they describe a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea. 3 components: 1. Knowledge (beliefs are knowledge) 2. THE BUYER DECISION PROCESS A process with five stages: Nacida para sacar matrículas, experta en tener que matricularme tres veces de lo mismo - coches.net a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6556640 Need Information Evaluation of Purchase Postpurchase recognition search alternatives decision behavior NEED RECOGNITION: the buyer senses a difference between an actual state and some desired state, triggered by internal (you decide by yourself) (you become angry because you are hungry); not so many, Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. because nowadays there are many external stimuli, and external stimuli (you perceive the smell of food and you become hungry, can also be an ad) Marketers want to understand the factors and situations that usually trigger consumer need recognition. INFORMATION SEARCH: when the consumer has a need, there are 3 possible outcomes: - Strong drive, satisfying product at hand… just purchase it. Sometimes you don’t need info: if your iPhone gets stolen, you’re going to buy another one. - Just store the need in memory (heightened attention). You start thinking about buying something. Your clothes are a sign of attention, so you immediately recognize other person with them; if you are considering buying a Toyota Yaris, it becomes your center of attention, and you start seeing them everywhere; then you start looking at who is driving, and it might change your thinking (what is the typical driver? Old people? I don’t want it then) - Let’s search for information on how to solve my need (active search). You want to change car: you start going to car dealers, buying magazines, getting info online… Sources for information: Personal sources: family, friends, neighbors… I’ve seen you drive a Yaris, what can you tell me about it? Are you happy? Commercial: advertising, salespeople, Internet, packaging, displays. Configuring, interaction with the product: I want this this and this, this equipment, this color, etc. and the price would be this. Public sources: mass media, consumer-rating organizations Experiential sources: handling, examining, and using the product. Going to the car dealer, and try the car. Marketers want to understand where consumers get their information and how they trust it depending on the source. EVALUATION OF ALTERNATIVES: if I want a new car because I’m having a baby, I will pay attention to the attribute “large”, but if I’m buying because mine broke, I won’t mind if it is large or not. - How do consumers process information to arrive at brand choices? - Certain needs take consumers to value certain product benefits. - Consumers attach different degrees of importance to each attribute someone would care about how cute the car is, and someone would care about how sportive it is. It is not important to be the best car, but to understand how consumers think. o The difference between “importance” and “saliency”. - Consumers develop brand beliefs. German cars (collective brand) are safe and reliable - Consumers have a utility function for each attribute. Not every attribute of car will have the same value for every customer, because we all have different utility values (all customers are different). Nacida para sacar matrículas, experta en tener que matricularme tres veces de lo mismo - coches.net a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6556640 - Models: o Expectancy value model of consumer choice (composite index of attributes x importance). Consumers make some kind of calculations on their minds. o Conjunctive models: my choice must have this attribute. It is like a filter; you only consider the cars that meet at least 1 criterion, e.g., I want a hybrid car, so I won’t consider non- hybrid cars. This doesn’t happen in real life. Way to sum up information to make our decisions easier. o Disjunctive model: my choice should rank high in this attribute. I want a car that is large, so I want the trunk to be more than 500 liters. Maybe I don’t need the best (largest) but (the Octavia has more space, but you prefer the Honda because it is good enough). Sometimes they mix, specially in complex products. Marketers want to understand how consumers evaluate alternatives. PURCHASE DECISION: after evaluation, the preferred brand is most likely to be purchased but, it can also be postponed. The decision can be influenced by other people and/or situational determinants (influencers, parents, friends…). Perceived risk poses several threats in this stage, if you started a complex buying behavior, and you couldn’t make your mind clear, maybe you just abandon because it is too risky. (e.g., how are the batteries of the electric car going to age, are they working the same in 5 years?) Maybe you don’t reach a decision: not that product on the market, or not affordable. Marketers want to understand why consumers engage in exchange, and how those exchanges are created, resolved, or avoided. POST PURCHASE BEHAVIOR: comparison between expectations and perceived performance. The size of the gap determines levels of satisfaction and dissatisfaction. Cognitive dissonance: discomfort caused by post-purchase conflict. When I buy a car, maybe I start regretting it when I buy it. Money risk, social risk (what would others think if I buy this car, would the change the way they see me?, should I have bought the Toyota instead of the Honda?. This is independent of the consumer using the product: it can happen before you try the product. Eventually, you will use the car; if you’re satisfy, you could buy again, if not, not, you’re happy, you’ll tell friends, family (mouth to mouth) and also if you’re dissatisfied (bad word of mouth). We don’t want to live with the feeling that you make a mistake, so we try to convince ourselves by telling others how good our purchase was. A lot of things happen after you buy (not only satisfaction) The double speed magnitude: WOM If consumers are not buying a product because they do not perceive a need for it, Marketing might launch advertising messages that trigger the need and show how the product solves customer’s problems. Companies are not selling as much as they expected. If customers know about the product but are not buying because they hold unfavorable attitudes towards the brand, the marketer must find ways either to change the product or to change consumer perceptions. Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. a64b0469ff35958ef4ab887a898bd50bdfbbe91a-6556640 3. TYPES OF BUYING DECISION BEHAVIOR A toothpaste is not a tennis racket, an expensive camera, or a new car. Complex decisions involve more buying participants and more buyer deliberation. Classification High involvement Low involvement Significant differences between Complex buying behavior Variety-seeking buying behavior Reservados todos los derechos. No se permite la explotación económica ni la transformación de esta obra. Queda permitida la impresión en su totalidad. brands Few differences between brands Dissonance-reducing buying Habitual buying behavior behavior Purchase involvement means that consumers will devote some time and effort to look for info, process it and get it right. You involve when you perceive risk (if you don’t perceive risk at all, why would you bother) There are markets in which we don’t know the difference between brands COMPLEX BUYING BEHAVIOR: high involvement in a purchase, and significant differences among brands. The product is expensive, risky, purchased infrequently, and high self-expressive. Typical example: buying of real-state, cars, computer. DISSONANCE-REDUCING BUYING BEHAVIOR: high involvement and few differences between brands. The product is expensive, infrequent to purchase, and with not big difference among brands (you may not now brands, e.g., ceramics). Important dives: good price (if you think they are all the same, you’ll choose the cheapest), convenience (I need water, I buy whatever is available), brand recognition → reduces dissonance. Porcelanosa is more expensive because it is the one that people know; the fact that the only one you know is the most expensive reinforcers the thought of the tiles been good. e.g., TILES. HABITUAL BUYING BEHAVIOR: low involvement and little brand difference. The brand choice can be a habit more than a preference. It is more about familiarity than brand conviction. Price and sale promotions are very strong drives (they give me a reason to change). The one I usually buy is good enough, so I will keep buying it. I buy what I know. Example: kitchen paper towels. VARIETY-SEEKING BUYING BEHAVIOR: low involvement and significant perceived differences between brands. Consumers do a lot of brand-switching because of boredom, and/or for the fun of trying something different. I will use one or the other. Change just for the fun of it. Books, movies. Is it better to have many variety or non? Mercadona: strategy is selling their own brand. TYPICAL STRATEGIES: - Brand leaders try to promote habitual behavior by dominating shelf-space, advertising and avoiding out-of-stock conditions. If you want my Doritos and my lays, you have to take all these products, and I want 10 miters of shelf. Using power in distribution channels. Advertising: Reconfirming customers that they are buying right. Out of stock opens the possibility to discover something new, which can even be better than the one that you habitually buy. - Brand challengers will encourage variety seeking by offering lower prices, deals, coupons, free samples and advertising centering on the fun of trying something new. Nacida para sacar matrículas, experta en tener que matricularme tres veces de lo mismo - coches.net