Professional Documents
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CHAPTER TOPICS
1. 2. What is consumer behaviour? Influences on consumer behaviour Approaches to studying buyer behaviour Consumer psychologywhat makes consumers tick? Behaviourist and cognitive approaches What is marketing? The marketing concept The marketing mix The role of marketing in organisations Evolution of the marketing concept Organisational buying Importance of marketing research Market segmentation The impact of technology on buying behaviour and consumption in Australia
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What is marketing?
A definition of marketing should be used here, with key concepts highlighted: Marketing involves all those activities a company undertakes in the process of getting its goods and services into the hands of buyers (both consumers and organisational buyers) (text, p. 8). A wide range of organisations engage in marketing. These organisations can be marketing products, services or ideas. Businesses, government bodies, sporting organisations and not-for-profits can employ marketing principles. Obviously a key objective of marketing is to make a profit. However, other outcomes can include donations, participation in an event, or changing attitudes toward particular issues. The marketing concept The marketing concept states that the objective of the company should be to find and fill consumer needs while making a profit. But to satisfy needs, marketers must first understand what needs exist. That is why it is important for marketers to understand consumer behaviour. The marketing mix The marketing mix is a group of four critical elements and decision areas that marketers can manipulate to meet consumer needs. These four elements are: 1. Productincludes product design, features, brand, packaging, labelling, product mix breadth and depth. 2. Priceentry strategy, pricing points for each product line, discounts and allowances, value perception. 3. Placementlogistics of making products available to consumers, including intermediaries to be used, level of distribution and roles of intermediaries. Consumer Behaviour by Karen Webb
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Organisational buying
Most manufacturers have at least two consumers to considerend user consumers and business buyers. The business market is defined as all the organisations that buy goods and services to use in the production of other products and services or for the purpose of reselling or renting them to others at a profit. 1 Business buyers use different products and services to produce their final products, either as inputs, as part of the production process, or in the running of their business. End users (consumers) are important to consider, because their demand drives demand for business buyers. The influences that act on business demand are different to those of consumers, even though people are still making the decisions. The process that is used to make a purchase decision is also different to that of consumers. Business-tobusiness buying (B2B) will be discussed throughout the course, rather than treated as a stand-alone topic. After all, the volume of B2B far outweighs the volume of business to consumer transactions. Importance of marketing research Consumer research that has been undertaken by theorists all over the world is important in developing theories of consumer behaviour which can then be used by marketers. Market research can assist marketers in making strategic marketing decisions. Consumer behaviour research is typically modelled on areas of psychology and sociology. The idea is to understand consumer opinions, factors that influence decisions, the processes used to make different types of decisions, and even the development of models to predict behaviour. The two broad types of research that can be undertaken are quantitative and qualitative. Quantitative research is typically exploratory, uses small samples, and examines the underlying reasons for behaviour. Measures used to collect qualitative research include focus groups, in-depth interviews and projective techniques.
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Market segmentation
Market segmentation is used by marketers to divide the total potential market into smaller, homogeneous segments. Consumer and organisational markets are segmented using different criteria. Segmentation allows marketers to understand how different groups of consumers are motivated by different needs, and allows them to target those consumers more appropriately. Segmentation bases are dealt with in more detail in Chapter 2. These concepts are critical for students to grasp upfront because consumers can be grouped because of similar characteristics, but each segment has distinct characteristics that impacts on the way those consumers behave with different stimuli. Marketers can then alter their marketing strategy, and different elements of the marketing mix, to meet the segments needs better. Positioning is the way in which a company or brand is perceived by consumers. It is important that companies actively position their offerings through manipulation of the different marketing mix elements, rather than positioning happening by accident! The image a consumer holds of a company is not easily changed.
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Technology is changing the way we live. Our home entertainment options, the way we prepare meals, how we study and work, are all affected by technological advancements. Marketers need to utilise these new technologies, not just to differentiate their offerings, but to survive. Online shopping, the Internet and e-mail are obvious examples of advancements available to the majority of consumers. Relationship building, networking, and partnering with business alliances help make marketing activities more efficient and competitive. All aspects of marketing, from developing marketing strategy and the marketing mix, to market research, service support, product development, and actual transactions, are all affected by technology.
DISCUSSION EXERCISES
1. Consider the following types of organisations. What products/services or ideas are marketed? Briefly outline the key marketing mix elements used by marketers of these organisations: a) Kelloggs cornflakes b) World Vision child sponsorship c) The Australian Labor Party d) Breast Cancer Council e) Pizza Hut. You are the manager of a new line of spray-on bandaids for everyday scrapes and cuts. Describe how an understanding of consumer behaviour is useful to you in terms of: a) how the market could be segmented b) the influences on consumers purchase decisions c) societal issues. Visit the supermarket and choose a particular product category to research. Observe consumers and what they look for in purchasing their products. Do they know what brand they are looking for? Do they look at the ingredients? Is price the main determinant? Try to examine at least 25 consumers. Is this qualitative or quantitative data? Why? Discuss the different types of consumers that might be attracted to the following restaurants: a) Chinese restaurant b) fast food restaurant like McDonalds c) la carte restaurant in exclusive hotel. Look up any home page for a company. View the type of information and services that are available on the web page. How has technology changed the way this company does business?
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