Introduction to Business Chapter 3 PDF

Course: Introduction to Business Course Code: BSIB1101 College of Economics & Business Administration Chapter 03 MARKETING Image : https://www.intandemcommunications.co.uk/article/what-is-marke...

Course: Introduction to Business Course Code: BSIB1101 College of Economics & Business Administration Chapter 03 MARKETING Image : https://www.intandemcommunications.co.uk/article/what-is-marketing/ Contents 1. Marketing 2. Core Marketing Concepts 3. Marketing Function 4. Marketing Management Orientations 5. Marketing Mix 6. Role of Marketing Mix in Marketing Strategy 7. Consumer Behavior Recommended Reading: https://ebookcentral.proquest.com/lib/momp/detail.action?docID=30111 85&query=consumer+behaviour+and+marketing 1.Marketing Meaning ▪ Marketing is about identifying and meeting human and social needs. ▪ One of the shortest good definitions of marketing is ― meeting needs profitably. When eBay recognized that people were unable to locate some of the items they desired most, it created an online auction clearinghouse. When IKEA noticed that people wanted good furnishings at substantially lower prices, it created knockdown furniture. ▪ These two firms demonstrated marketing savvy and turned a private or social need into a profitable business opportunity 1.Marketing Definition Image Source: https://www.omnikick.com/customer-acquisition-strategy/ 2.Core Marketing Concepts 1. Needs, Wants & Demand 2. Marketing Offers 3. Value and Satisfaction 4. Exchange, Transactions & Relationships 2.Core Marketing Concepts 1. Needs, Wants & Demand Needs Needs are basic requirements of any individual Not created by marketing people. Wants Described in terms of products that will satisfy needs while human needs are limited and General , wants are unlimited and specific Demand When human wants are : backed by purchasing power and willingness to buy, they become demands. https://www.dreamstime.com/illustration/consumer-needs.html 7 Activity : Identify Customer Needs, wants, and Demands 2. Mobile 1. BentleyPhone Car for to Billionaire 3. HouseBusinessman for travelling and communicate with requires a private jet shelter family prestige and friends A. NEEDS plane for self-use B. Wants C. Demands Customer 2.Core Marketing Concepts 2. Marketing Offers ▪ Combinations of : ▪ products, services, information, or experiences ▪ offered to a market to satisfy a need or want. ▪ The largest share of marketing offers consists of : ▪ physical (tangible) products ▪ which include ▪ non-durable goods (fast moving consumer goods or FMCG) and ▪ consumer durables 9 2.Core Marketing Concepts 3. Customer Value and Satisfaction Customer Value : ▪ The difference between ▪ the worth the customer gains from buying and using a product and ▪ the cost of buying the product. ▪ The main task of marketing, becomes value-creation and value delivery. Customer Satisfaction: ▪ When Customer Expectations are fulfilled. ▪ Satisfied customers will : ▪ buy the product again and ▪ tell the others about their good buying experiences. ▪ Dissatisfied customer : ▪ switch to a competitor's products and ▪ discourage others from buying the product. 1 2.Core Marketing Concepts 4. Exchange, Transactions & Relationships Exchange ▪ It is the act of : ▪ obtaining an object which one needs from another ▪ by offering some other thing in return Market ▪ Refers to the different groups of consumers for a product or service. ▪ A market is the set of actual and potential buyers of a product. 1 3.Marketing Function Marketing as a Function ▪ A process by which : ▪ individuals / group ▪ obtain what they need and want ▪ by creating and exchanging ▪ products and values with others. ▪ Managing markets to : ▪ bring about profitable exchange relationship ▪ by creating value satisfying needs and wants. 1 3.Marketing Function Marketing Activities – MARKET RESEARCH 1) Searching For Customers Distribution Channel 2) Product Development 3) Market Research 4) Communication 5) Sales Promotion 6) Distribution Channel Management 7) Service Source Image: https://blog.hubspot.com/service/customer-support 3.Marketing Function Marketing Management ▪ It is the art and science of : ▪ choosing target markets and ▪ building profitable relationship with them. ▪ It involves : ▪ getting, keeping and growing customers ▪ through creating, delivering, and communicating superior value ▪ Marketing management involves : ▪ managing demand, which in turn, involves managing customer relationships Image Source: https://www.istockphoto.com/photo/marketing-management-business- concept-gm847923756-139090489 14 4. Marketing Management Orientations or Concepts 1. The Production Concept 2. The Product Concept 3. The Selling Concept 4. The Marketing Concept 5. The Customer Concept 6. The Societal Marketing Concept 15  4. Marketing Management Orientations or Concepts 1. The Production Concept: PRODUCT CONCEPT ▪ Consumers will favor products that are available and highly affordable. ▪ Improvement in production and distribution efficiency PRODUCTION CONCEPT will be the focus for managements under this concept. 2. The Product Concept: ▪ Consumers will favor products that offer the most in quality, performance, and innovative features. ▪ Continuous improvements in product and quality are essential for companies that follow this concept. Image Image Source: Source: https://images.app.goo.gl/WQLY8G2Gri34vvnH8 https://images.app.goo.gl/CrR8v2cYuk2AHBnGA 16 4. Marketing Management Orientations or Concepts 3. The Selling Concept : ▪ Consumers will not buy enough of the company's MARKETING CONCEPT products unless it undertakes large scale selling tactics and heavy promotion efforts. 4. The Marketing Concept: ▪ Achieving the company's objectives depends on: ▪ understanding the needs and wants of target markets and ▪ delivering the desired satisfaction in a better way than what the competitors are doing. SELLING CONCEPT Image Source: https://images.app.goo.gl/cHSaL4oSmphr3hgR8 17  Selling v/s Marketing S.No Selling Marketing 1 Focus on Seller Needs Focus on Buyer’s Needs 2 Converts Existing Goods into Profit Converts Customer needs into products 3 Cost determines the prize Market determines the prices 4 Customer is the last link in Customer is the most important Business 5. Business is the Goods producing Business is the customer Satisfying Process. process. Image Source: https://images.app.goo.gl/j1E6mc6swjXPdB1L6 18  Contrasting of selling concept and the marketing concept: https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwjmrcChtvzhAhXI0KQKHbBgDEMQjRx6BAg BEAU& url=https%3A%2F%2Fwww.pinterest.com%2Fpin%2F626211523162907805%2F&psig=AOvVaw0EnuLEYJ9nDkOIug9Jgx5o&ust=1556871982271916 19 4. Marketing Management Orientations or Concepts 5. The Customer Concept ▪ Achieving profitable growth through : ▪ capturing a larger share of each customer's expenditures by: ▪ building high customer loyalty and ▪ focusing on customer lifetime value. 6. The Societal Marketing Concept ▪ Organizations should deliver superior value to the customers in a way that maintains or improves the consumer's and the society's wellbeing. ▪ Calls on marketers to balance three considerations in setting their marketing policies: company profits, consumer wants, and society's interests or human welfare 20 5. Marketing Mix (Four P’s of Marketing) ▪ It is the set of controllable, tactical, marketing tools that the firm blends to produce the response it wants in the target market. ▪ The marketing mix consists of the variables, 21 5. Marketing Mix (Four P’s of Marketing) 1. Product : ▪ Goods and services offered by a company to the target market to satisfy needs and wants. 2. Price: ▪ The money value that the consumers have to pay to buy the product or service. 3. Promotion: ▪ Activities of personal selling, advertising, and communicating product benefits and attributes to target consumers to persuade them to purchase... 4. Place: ▪ Physical distribution activities through which the product moves from the factory to the customer. ▪ Channels of distribution, logistics, warehousing, transport, etc. come under the place variable. 22 6. Role of Marketing Mix in Marketing Strategy ▪ Marketing mix has an important role to play in : ▪ Marketing Planning ▪ Marketing Strategy. ▪ Using the marketing mix variables, the organization tackles the environment variables. ▪ The organization can : ▪ choose, alter and control its marketing mix variables, ▪ according to the environmental variables. ▪ The marketing mix is the most visible part of the marketing strategy of an organisation. Image Source: https://images.app.goo.gl/2McjfCjUr4ahxzV2A 23 6. Role of Marketing Mix in Marketing Strategy Scanning the Marketing Environment: ▪ Marketing activities do not take place in a vacuum, isolated from all external forces. ▪ "A company's marketing environment consists of : ▪ internal and external forces ▪ that affect management's ability to build and maintain successful relationships with target customers. ▪ The marketing environment is composed of : 1. Micro-environment 2. Macro- environment. https://images.app.goo.gl/fHbyy1Uw8LG79xft8 24 6. Role of Marketing Mix in Marketing Strategy Image Source: https://blog.oxfordcollegeofmarketing.com/2014/11/0 4/the-impact-of-micro-and-macro-environment- factors-on-marketing/ 6. Role of Marketing Mix in Marketing Strategy The Micro-environment ▪ Consists of the following controllable actors close to the company that affect its ability to serve its customers : 1. The Company 2. The Suppliers 3. The Marketing intermediaries 4. The Customer markets 5. The Competitors 6. The Public SUPPLIERS https://images.app.goo.gl/m4YyQSqkPWCw4Hfj9 26 6. Role of Marketing Mix in Marketing Strategy The Macro Environment ▪ Forces that shape opportunities and pose threats to the company. SOCIO-CULTUTAL POLITICAL ECOLOGICAL ENVIRONMENT ENVIRONMENT ENVIRONMENT TECHNOLOGICAL OF OF ENVIRONMENT ▪ These uncontrollable factors consist of - LEGAL ENVIRONMENT OF OF BUSINESS BUSINESS OF BUSINESS 1. Demographic BUSINESS 2. Economic 3. Natural / Ecological 4. Technological 5. Political 6. Legal 7. Cultural. 27 7. CONSUMER BEHAVIOUR ▪ Consumer behavior or buyer behavior is defined as : ▪ the behavior that consumers display in ▪ searching for, ▪ purchasing, ▪ using, ▪ evaluating and disposing of ▪ products and services ▪ that they expect will satisfy their needs 7. CONSUMER BEHAVIOUR Customer Categories 1. The Household buyer ▪ Buys goods and services for : ▪ own personal use, ▪ use of the household, ▪ as a gift for a friend or relative. ▪ The products bought for final use of individuals. 2. The Organizational buyer ▪ Products, equipment and services are bought to : ▪ run organizations, or for further production. ▪ i.e. profit and non-profit companies, government agencies (state or national), and institutions (schools, colleges, hospitals, hotels) 7. CONSUMER BEHAVIOUR Buying Roles Several roles people might play in a buying decision. 1. The Initiator ▪ Who first suggests / thinks of the idea of buying particular product /service. 2. An Influencer ▪ Whose views and advice carry some weight in making the final decision. 3. The Decider ▪ Who ultimately determines any part of, or the entire buying decision-whether to buy, what to buy, how to buy or where to buy. 4. The Buyer ▪ Who makes the actual purchase. 5. The User ▪ Who consume or use the product or service. 30 7. CONSUMER BEHAVIOUR Types of Buyer Behavior 1. Complex Buying Behavior: ▪ This type of behavior is encountered : ▪ when consumers are buying an expensive, infrequently bought product. ▪ They are highly involved in : ▪ the purchase process and consumers’ research before committing to a high-value investment. E.g. buying a house or a car. 2. Dissonance Reducing Buyer Behavior: ▪ The consumer is highly involved in the purchase process but has difficulties determining the differences between brands. ▪ ‘Dissonance’ can occur when the consumer worries that they will regret their choice. E.g. buying a diamond ring 3. Habitual Buying Behavior: ▪ Low consumer involvement and the absence of significant brand differences. ▪ Go to the store and reach for the brand (E.g. Salt). 3. Variety Seeking Buying Behavior: ▪ Consumers to do a lot of brand switching. ▪ Brand switching occurs for the sake of variety rather than dissatisfaction Image Source: https://images.app.goo.gl/TfM1ennNCZajiTuU7 31 7. CONSUMER BEHAVIOUR Buying Decision-Making Process - 1 2 3 4 5 7. CONSUMER BEHAVIOUR Buying Decision-making Process 1. Need Recognition: ▪ The buying decision process starts with the buyer's recognition of a problem or need. ▪ Need can be triggered by internal or external stimuli. 2. Information Search: ▪ A consumer searches for information about the product / service through different sources. ▪ Sources are personal sources (family, friends, neighbors), commercial sources (advertising, sales persons, dealers, display, etc.), public sources (mass media), and experimental sources (handling, examining and using the product Image Source: http://uscmkt450.com/cb_Decision_Making.html 34 Buying Decision-making Process 3. Evaluation of Alternatives: ▪ The consumer evaluates the alternatives based on : ▪ product attributes, ▪ weightage for important attributes, ▪ brand image, ▪ utility function ▪ evaluation procedure. Image Source: https://images.app.goo.gl/TfM1ennNCZajiTuU7 Buying Decision-making Process - 4. Purchase Decision ▪ After the brand choice, the consumer forms : ▪ a purchase intention followed by : ▪ the purchase decision, ▪ vendor decision, ▪ quantity decision, ▪ timing decision ▪ payment method decision. 5. Post-Purchase Behavior ▪ After purchasing the product, ▪ the consumers will experience some level of satisfaction or dissatisfaction. ▪ The product falls short of the buyer's expectation,: ▪ the buyer will be disappointed and dissatisfied. ▪ Meets expectations,: ▪ the buyer will be satisfied. ▪ Exceeds expectations, : ▪ the buyer will be delighted. 7. CONSUMER BEHAVIOUR Five stages in the adoption process - ▪ The buyers go through the five stages in the adoption process for a new product. 1. Awareness: The buyer becomes aware of the new product, but does not have information about it. 2. Interest: The buyer shows interest and seeks information about the new product. 3. Evaluation: The buyer considers whether trying a new product will be worthwhile. 4. Trial: The buyer tries the new product as a sample to see how it is and whether it is worth using it regularly. 5. Adoption: The buyer decides to become a regular customer of the new product. Image Source: https://images.app.goo.gl/TfM1ennNCZajiTuU7 End of Chapter 3…  CONTACT INFORMATION: Name of Staff : Dr. Abdul Kadir Khan Office: BS059 Email: [email protected] VERSION HISTORY Version No Date Approved Changes incorporated 01 Sem. (I) 2022/2023 39