Principles of Marketing PDF
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Shaliemar Afable
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This document is on the principles of marketing, covering topics such as distribution channels, components, types, and levels. It also includes different organizational market types, reseller buyer behavior, and related vendor marketing tools.
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PRINCIPLES OF MARKETING DISTRIBUTION CHANNEL roducer, wholesaler, retailer, and p...
PRINCIPLES OF MARKETING DISTRIBUTION CHANNEL roducer, wholesaler, retailer, and p consumer. A distribution channel is the network of Level 3 businesses or intermediaries through This level may add the jobber, this level which a good or service passes until it adds the role of the individual who may assemble products from a variety of reaches the final buyer or the end producers, store them, sell them to consumer. Distribution channels can retailers, and act as a middle-man for include wholesalers, retailers, wholesalers and retailers. distributors, and even the Internet. COMPONENTS OF DISTRIBUTION CHANNEL Producer Producers combine labor and capital to create goods and services for consumers. Agent Agents commonly act on behalf of the producertoacceptpaymentsandtransfer the title ofthegoodsandservicesasthey move through distribution. Wholesaler A person or company that sells large quantitiesofgoods,oftenatlowprices,to retailers. Retailer A person or business that sells goods to the public in small quantities for immediate use or consumption End Consumer A person who buys a product or service. TYPES OF DISTRIBUTION CHANNEL Direct A direct channel allows the consumer to make purchases from the manufacturer Indirect An indirect channel allows the consumer to buy the goods from a wholesaler or retailer. H ybrid distribution channels use both direct channels and indirect channelsid Distribution Channel Levels Level 0 Thisisadirect-to-consumermodelwhere the producer sells its product directly to the end consumer Level 1 A producer sells directly toaretailerwho sells the product to the end consumer. Level 2 Including twointermediaries,thislevelis one of the longest because it includes the Principles of Marketing 37037| BSCA 1-B | Ms. Geraldine D. Raydanas TYPES OF ORGANIZATIONAL MARKETS Reseller Buyer Behavior Industrial Market Reseller organizations have buying centers consists of all the individuals and whose participants interact to make a organizations that acquire goods and variety of buying decisions services that enter into the production of other products and services that are sold , Vendor Marketing Tools Used with Resellers rented ,or sup p lie to others Cooperative advertising, where thevendor Reseller Market agrees to pay a portion of the reseller's consists of all the individuals and advertising costs for the vendor's product. organizations that acquire goods for the Preticketing,wherethevendorplacesatag purpose of re selling or renting them to on each product listing its price , others at a profit manufacturer, size ,identificationnumber, Government Market and color; the set tags help the reseller or Consists of governmental units reorder merchandise as it is being sold. federal,state,andlocalthatpurchaseorrent goods and services for carrying out the INDUSTRIAL BUYER BEHAVIOR main functions of government. making process by which formal organizations make purchases of products Major Influences on Industrial Buyers and services Environmental Factors Industrial buyers are heavily influenced by Major Types of Buying Situations factors in the current and expected Straight Rebuy economicenvironment,suchasthelevelof In a straight rebuy, the buyer reorders primary demand, the economic outlook, something without any modifications and the cost of money Modified Rebuy Organizational Factors the buyer wants to modify product Thesefactorsincludeinternalaspectsofthe specifications, prices, term s, or suppliers buying organization that shape purchasing New Task decisions and strategies Acompanybuyinganewproductorservice Interpersonal Factors for the first time faces a new task The buying center usually includes many participants; eachaffectsandisaffectedby Five Roles in the Purchase Decision Process the others. In many cases, the industrial Users marketerwillnotknowwhatkindsofgroup is the individual or groupwhowillactually dynamics take place during the buying use the purchase d p rod uct or services process Influencers Individual Factors is the individual or group that provides Each participant in the buying decision inform at ion and opinions that can process brings in personal motives, influence the buying decision perceptions, and preferences. These are Buyers affected by age , income , education, people with formal authority t o select the professionalidentification,personality,and supplier and arrange terms of purchase. attitudes toward risk. Buyers have Deciders difference buying styles peoplewhohaveformalorinformalpowert o select and approve the final suppliers. Other Characteristics of Organizational Markets Gatekeepers Direct Purchasing peoplewhocontroltheflowof information Organizational buyers often buy directly to others fromproducersratherthanthroughmiddle men, especially for items that are Stages of Buying Process technically complex or expensive 1. Problem Recognition Reciprocity 2. General Need Description Organizationalbuyersoftenselectsuppliers 3. Product Specification who also buy from them 4. Supplier Search Leasing 5. Proposal Solicitation Organizational buyers are increasingly 6. Supplier Selection leasing equipment instead of buying it 7. Order Routine Specification outright 8. Performance Review NOTES: o create effective marketing strategies, T marketers need a deep understanding of how these stimuli are processed within the organization to generate purchasing responses Shaliemar Afable Principles of Marketing 37037| BSCA 1-B | Ms. Geraldine D. Raydanas Organizational Trends in the Purchasing Area E mphasis on Public Accountability Government buyers are accountable to the U pgraded Purchasing public, which means they need to ensure Purchasing departments have often that purchases meet publicneedsandoffer occupiedalowpositioninthemanagement value for money hierarchy, even though they often manage more than half of the company cost. Factors Influencing Government Buyer Behavior Centralized Purchasing Economic Conditions In companies with many divisions, much The overall economic environment and purchasing is carried out by the separate government budgets influence what and divisions because of their differing needs. how much government agencies can buy. Long Term Contracts Political Environment Industrial buyers are increasingly seeking Government policies, political priorities, long-term contracts with suppliers. and changes in leadership can affect Purchasing Performance Evaluation purchasing decisions. Some companies are setting up incentive Legal and Regulatory Frameworks system to reward purchasing managersfor Governmentprocurementissubjecttolaws especiallygoodpurchasingperformance,in and regulations thatdictatehowpurchases much the same way that sales people are made and who can supply goods and receive bonuses for especially good selling services. performance Social and Environmental Considerations Increasingly,governmentagenciesconsider Government Buyer Behavior social and environmental impacts when makingprocessesandpurchasingactionsof making purchasing decisions, opting for government entities. Governments buy sustainable and socially responsible goods and services for public use and to options. fulfill various public functions Technological Factors Technological advancements can drive the Participants in Government Buyer Behavior need for new purchases or upgrades to existing systems and infrastructure. Federal Level This is the primary government buying organization. In the Philippines, it is the Government Procurement Policy Board (GPPB), which is responsible for establishing procurement policies, rules, and regulations. State Level This level is significant but not as high as the federal level. It falls under the Local Government Unit (LGU), which includes ProvincialGovernments,CityandMunicipal Governments, and Barangay Governments Local Levels These are similar to the state level but operatewithinthestateitself.Forinstance, Barangay Governments create regulations for local projects, such as cleanup drives, that are closer to their community ey Characteristics of Government Buyer K Behavior Formal Procedures Governmentpurchasesofteninvolveformal procedures and are governed by specific rules and regulations to ensure transparency and fairness. Budget Constraints Government agencies operate within set budgets and must justify their spending, which influences their purchasing decisions. Complex Decision Making Units Decisions are often made by committees or multiple stakeholders, making the process more complex compared to individual consumer decisions. Shaliemar Afable Principles of Marketing 37037| BSCA 1-B | Ms. Geraldine D. Raydanas Market Market Targeting A market refers to a group of potential Target marketing is when the market customers or consumers who have a specific identifies and focuses marketing effortson need or want, the ability to purchase aspecificgroupofconsumersmostlikelyto products or services to satisfy that need or purchase a product or service. Want. Types of Target Marketing Three Types of Market Market Coverage Strategies Mass Marketing The firm can adopt one of three market Thesellermassproduces,massdistributes, coverage strategies, known as andmass promotes one product to all undifferentiated marketing, Differentiate buyers. marketing and concentrated marketing Product Variety Marketing Choosing a Market Coverage Strategy the seller produces two or more products is the evaluation of the marketplace and that have different features,styles, quality, determinationofhowmuchofityoushould and sizes. cover with your promotional strategy of a Target Marketing product or business. the seller identifies market segments, Identifying Attractive Market Segment selects one or more of these segments,and refers to a subset of potential customers develops products and marketing mixes within a broader market that a company tailored to each segment. identifies as having significant profit potential. Market Segmentation Marketsconsistofbuyers,andbuyersdiffer in one or more ways. They may differ in 3 Market Coverage Strategies their wants, resources, locations, buying Undifferentiated Marketing attitudes and buying practices. A marketing strategy that aims to reachas large an audience as possible. Bases for Segmenting Consumer Market Differentiated Marketing Geographic segmentation An approachtomarketingthatappealstoa Calls for dividing the market into different niche market or different types of geographical units such as nations, states, customers. A strategy of differentiated regions, counties, cities, or neighborhoods. marketingwouldcreatedifferentmarketing Demographic Segmentation campaigns to optimize brand awareness for consists of dividing themarketintogroups the various customer bases of your target based on demographic variables such as audience. age, sex, family size, family life cycle, Concentrated Marketing income, occupation, education, religion, A strategy where a company focuses on race, and nationality. serving a specific customer group. Psychographic Segmentation buyers are divided into different groups Market Positioning based on social class, lifestyle, or is the strategicprocessofdetermininghow personality characteristics. a brand or product is viewed inthemarket Behavior Segmentation in comparison to rivals. buyers are divided into groups based on their knowledge, attitude, use, or response Types of Targeting to a product. Positioning Strategies Positioning strategies describe companies Bases for Segmenting Industrial Market conscious attempts to shape consumers The Industrial market can be segmented perceptions of their brands or products. using many of the same variables used in Choosing and Implementing a Positioning consumer market segmentation. Strategy In order to develop a distinctive and Requirements for Effective Segmentation appealing brand image, choosing and executing a positioning strategy involves MEASURABILITY doing a market analysis, deciding on a The degree to which the size and unique stance that complements purchasing power of the segment can be competitive advantages and consumer measured. needs, and continuously expressing this ACCESSIBILITY position through marketing initiatives The degree to which the segment can be reached and served. SUBSTANTIALITY Thedegreetowhichthesegmentsarelarge or profitable enough. ACTIONABILITY Thedegreetowhicheffectiveprogramscan be designed for attracting and serving the segments. Shaliemar Afable Principles of Marketing 37037| BSCA 1-B | Ms. Geraldine D. Raydanas Marketers Beliefs Marketers have to be extremely careful in Are the perceptionsconsumershaveabout analyzing consumer behavior a product based on their experiences or Theyneedtoknowwhatpeopleareinvolved information they have in the buying decision and what role each Product Development personplays.Formanyproducts,itisfairly By understanding what consumers believe easy to identify the decision maker about your product, you can tweak it to meet their expectations better Consumer Buying Roles Advertising Strategies Consumer attitudes directly influence ad Initiator strategies. If people see a brandasfunand The person who first suggests or thinks of refreshing, ads would likely reflect those the idea of buying a particular product or qualities service. Brand Image Influencer Consumer beliefs impact brand image. A person whose advice and views carry Positive attitudes towards a product some weight in making a final buying enhance the brand's reputation. decision Decider The person who ultimately makes the Purchase Decision buying decision or any part of it- whether Before making a purchase, consumers to buy, what to buy, how or when to buy typicallyidentifyaneedorpainpoint,then Buyer useDECISIONresearch,peerreviews,social The person who makes the actual purpose media, and other resources to determine User which products mighthelpthemsolvethat The person who consumes or uses the pain point. product or service Post-Purchase Decision Types of Buying Decision Behavior If the product matches expectations, the Routinely Response Behavior consumer is satisfied: if it exceeds them, The simplest type of buying behavior, the consumer is highly satisfied; if it falls where consumers purchase low-cost, short, the consumer is dissatisfied frequently bought items with minimal decision-making Buyer Decision Process Towards New Products Limited Problem Solving New Product Limited problem solving occurs when define as a good, service, or idea that is buyers encounter an unfamiliar brand perceived by some potential customers as within a familiar product class new Extensive Problem Solving Adoption Process buyers face complex decisions for define as “the mental process through expensive,infrequentlypurchasedproducts which an individual passes from first in an unfamiliar product class. hearing about an innovation to final adoption” Stages in Buying Decision Process Adoption Problem Recognition define as the decision by an individual to consumer identify the problem they would become a regular user of the product like to solve Information Search Stages in the Adoption Process consumer search for the product and Awareness services that will solve their problem The consumer becomes aware of the Evaluation of Alternatives product but lacks information about it We have seen how the consumer uses Interest informationtoarriveatasetoffinalbrand? The consumer is stimulated to seek How does the consumer choosealternative information about the product brands? Realization The consumer considers whether it would Consumer Brand Relief make sense to try the product Consumer brand beliefs encompass the Trial perceptionsandviewpointsthatconsumers The consumer tries the product on a small hold towards a product or service. These scale to improve his or her estimate of his beliefs and attitudes are formed through value various factors like experiences, advertising, word-of-mouth, and cultural backgrounds Attitudes Refers to how customers feel or evaluate a product or service Shaliemar Afable
