Marketing Concept A firm will tend to perform well when it: –understands the needs and wants of targeted customers and prospective customers; –delivers.

Marketing ConceptA firm will tend to perform well when it:

– understands the needs and wants of targeted customers and prospective customers;

– delivers superior value by meeting those needs and wants through coordinated activities

– does this while working toward organizational goals

Implications of Marketing Concept

• Need to target segments• Need to understand motivations and

behavior of customers and prospects• Need to create an integrated package of

products, services, communications, channels, and prices

• Need to manage so that meeting customer needs drives profits

Benefits of Customer Orientation

• Cost efficiencies• Premium prices• Insulation in crises• Word of mouth • Share of customer – “one-stop shopping”• Ideas for new products• Employee morale• Drawbacks??

Types of Customers

• Individual Consumer• Households (consumers)• Businesses• Non-profit and government organizations

Other Distinctions• Professionals (consumer & business comb.)• Small businesses (businesses similar to consumers)• Intermediaries

Porter’s Value Chain

Support Activities

Direct Activities

Offering Target

Customers

ProductServiceImageComm.Channl Utils.Price

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PORTER’S VALUE CHAIN

Value Concepts• Value = sum of benefits minus sum of costs

– Implication: value can be increased by raising benefits or reducing costs

• Value is Perceived Value in the eyes of prospects and customers– Implication: vendor’s view of value may be

different than prospects’ / customers’ view– A Reality: perceptions may be malleable, but

ultimately rely on experienced performance

Implications of Value Chain + Definitions

• Segments exist• Value comes from more than product• Markets change concurrently with

technology change => uncertainty• Marketing must be involved in product

design and strategy• Best technology does not always “win,” but• Technology can be the reason you lose

PART IV: CONSUMER DECISION PROCESSPART IV: CONSUMER DECISION PROCESS

Customer decision process

ProblemRecognition

InformationSearch

Alternative Evaluationand Selection

Outlet Selection and Purchase

Post-purchaseProcesses

Effect of Purchase Involvement

• Complexity of decision process varies with purchase involvement– Nominal decision making– Limited decision making– Extended decision making

• Related, but not the same as Product Involvement

Types of Consumer DecisionsTypes of Consumer Decisions

Purchase involvementPurchase involvement is the level of concern for, or interest in, the purchase process.

Triggered by need to consider a particular purchase.

A temporary state influenced by the interaction of individual, product, and situational characteristics.

Types of Decision MakingTypes of Decision Making

1.1. Nominal Decision MakingNominal Decision Making

• Brand Loyal Purchases

• Repeat Purchases

2.2. Limited Decision MakingLimited Decision Making

3.3. Extended Decision MakingExtended Decision Making

The Process of Problem RecognitionThe Process of Problem Recognition

The Process of Problem RecognitionThe Process of Problem Recognition

Types of Consumer ProblemsTypes of Consumer Problems

Active Problem Active Problem

An active problemactive problem is one the consumer is aware of or will become aware of in normal course of events.

Marketing strategyMarketing strategy:

Only require marketer to convince consumers that its brand is the superior solution.

Inactive Problem Inactive Problem

An inactive probleminactive problem is one of which the consumer is not aware.

Marketing strategyMarketing strategy:

Marketer must convince consumers that they have the problem AND that their brand is a superior solution.

Marketing Strategy and Problem Marketing Strategy and Problem RecognitionRecognition

1.1. Discovering Consumer ProblemsDiscovering Consumer Problems

2.2. Responding to Consumer ProblemsResponding to Consumer Problems

3.3. Helping Consumers Recognize ProblemsHelping Consumers Recognize Problems

4.4. Suppressing Problem RecognitionSuppressing Problem Recognition