Chapter 11 - Business

In the context of marketing, buyer behavior includes:

- Buyers purchasing for an organization - Buyers purchasing for their own use

A competitive advantage is something unique that competitors:

- Can do, but choose not to - Cannot do

limited problem solving

- Consumers are familiar with the product, but prefer to compare brands and stores before making a purchase. - ex: consumers compare brands and prices, purchasing dress shoes for your first job interview

routine response behavior

- Consumers frequently purchase products without giving much thought to either the product or the purchase situation. - ex: consumer purchases a soda, purchasing toothpaste

Influences on Business buying decisions

- Informal group that makes purchase decision: Influencer, Purchaser, User, Decider, Gatekeeper - Sellers must identify and understand who plays which role

examining secondary research

- Information that has already been gathered, perhaps by someone else, for a different purpose. - review existing information

true statements about the consumer-decision process

- Marketers know it is less expensive for them to keep existing customers compared to attracting new customers - The consumer decision process is considered to be a rational process - Brand-loyal customers are more likely to simply repurchase a brand they know they're satisfied with - Consumers often make impulse decisions following a simple decision rule

Determine Research Objectives

- Outline what primary data collection should find

resellers

- Procter & Gamble (a producer) sells Pringles potato chips to - Publix supermarket (a retailer), not directly to you

STP: Segmentation, Targeting, and Positioning

- Segmentation: Grouping customers by characteristics - Targeting: Deciding which group to focus upon - Positioning: Understanding customers' perceptions of products

Segmentation Process

- Selection of industry/product category market - Identification of segmentation bases - Profile and analysis of segments - Selection of target market(s) - Development of marketing mix for each identified target market

Business buyer decision process

- Similar to the consumer decision process, but more complex due to Committee processes, budgets, size of the purchase, and demands of other business activities

Information Search

- Stage in the Consumer Decision Process during which a consumer searches for internal or external information. - consults others about the product of interest

institution

- The University of Tampa buys computers for labs - Buys baseball caps for a high school baseball team

straight rebuy

- The business will often automate straight rebuys so that a reorder is placed as soon as the product inventory reaches a certain point, or when it reaches a certain amount of time since the last order such as an order that is placed during the first week of every month. - similar to the consumer's routine response - Walgreen's has a standing order with its distributor to deliver the same number of boxes of facial tissue every week

post-purchase evaluation

- The fifth stage in the Consumer Buying Decision process. Once the product is purchased and used, the consumer will evaluate the adequacy with his original needs. - may experience buyers remorse

problem recognition

- The first stage in the Consumer Buying Decision process. Results when a consumer recognizes a substantial difference between what is perceived as the actual product and the product he/she wants to purchase, which directly impacts the decision making of the customer in the buying process. - realizes a need or want

purchase decision

- The fourth stage in the Consumer Buying Decision process. The process a customer goes through when buying a product. It can be seen as a particular form of a cost-benefit analysis. - decides to postpone or move forward with the purchase

evaluation of alternatives

- The third stage in the Consumer Buying Decision process. During this stage, consumers evaluate all of their product and brand options on a scale of attributes which have the ability to deliver the benefit that the customer is seeking. - compares brands and prices

examples of internal search

- Think about what you already know - Remember the competitors you're already aware of

modified rebuy

- When a business has previously purchased a product but must revisit the product specifications due to a change in circumstances. - The Walgreen's buyer heard reports that this year's flu season was predicted to be a bad one, so she increased the number of boxes of tissues she normally orders

Problem Definition

- a broad statement of the general problem and identification of the specific components of the marketing research problem - clearly state what the research should accomplish

Developing hypothesis

- a possible answer after secondary research - offer educated guesses about what the research will find

new task rebuy

- most complex - The business has never before purchased this good or service and does not have an existing set of product specifications nor a preferred supplier list. - Walgreens recently ordered self checkout point of purchase equipment, a new service being introduced into stores

five-step process that consumers use to make buying decisions

- problem recognition - information search - evaluation of alternatives - purchase decision - post-purchase evaluation

Which one of the following is NOT a type of business buying behavior?

A business owner buying a product to use at home for his/her family's use

Successful marketing strategy example

Good-belly- probiotic juice products: - Identified a need in the marketplace for dairy-free, soy-free, and vegan products - Developed a product to meet that customers needs - Delivered value to identified target market

Effective product positioning requires ALL BUT which ONE of the following: Multiple target markets In the minds of its target market A unique place Relative to competitors

Multiple target markets

government

New York city purchases snow removal equipment

Marketing research process

Problem definition Secondary research Setting research objectives Developing hypotheses Design research method Exploratory, descriptive, casual Data collection Data analysis Results and recommendations Follow up

A business buy is considered to be _____ due to the interactions of the various buying center members.

complex

descriptive research

counting numbers of respondents who have certain characteristics or behaviors

design research method

determine the type of data of needed and the manner in which it should be gathered

in the _____ stage of the consumer decisions process, the buyer has gathered a sufficient amount of information and begins to compare the different brands and options available to them

evaluation of alternatives

the purchaser is frequently the highest-level management person involved in the business buyer decision

false

when compared to consumer purchases, business purchases are usually less complex

false

A buying center within a business is considered to be a(n) _______ group

informal

The purpose of marketing research for a business is to collect ______ to reduce _____ in decision making.

information; risk

types of business buying decisions

new task buy, modified rebuy, straight rebuy

false statement about the consumer-decision process

All consumers follow the step by step process of the consumer decision process exactly

Companies that embrace the marketing concept:

Are market-oriented

Types of Business transactions

Business to Business: - One business sells products to another business: - Canon sells copiers to FedEx - Cigna sells health insurance to target for its employees Business to Consumer: - Business sells products to consumers - Canon sells cameras to individuals directly from its website - Cigna sells health insurance to individuals through a 1-800 number

reseller

Buys baseball caps to be carried in a sporting goods store

government

Buys baseball caps to be worn by police officers during the summer

producer

Buys thread to be used in manufacturing baseball caps

follow up

Check back with the stakeholder to ensure recommendations have been addressed

communicate results

Clearly deliver the data analysis and recommendations to the appropriate stakeholder(s)

types of customers

Consumers: - End users of products - Purchase products for their own use Business buyers: - Purchase products to either resell or use in producing another

The total market

Existing Customers Potential Customers Purchasing Criteria: Ability, Willingness, Authority

analyze data

Determine what the information means

Toyota identified different needs in the car market and developed distinct products and marketing mixes to appeal to multiple identified market segments. Toyota employs this type of targeting strategy:

Differentiated

Positioning

Establishing a unique place In the MINDS of the target market Relative to competitors

collect data

Execute the method to gather data

Producers

Manufacturers - Apple produces iPhones Service providers - Google provides a search engine

The consumer decision process

Step 1: problem recognition Step 2: information search Step 3: evaluation of alternatives Step 4: purchase decision Step 5: post-purchase evaluation

Marketing Research

The function that links the consumer, customer and public to the marketer through information—information used to identify and define marketing opportunities and problems; generate, refine and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.

extended problem solving

The purchase decisions carries a high level of risk and is one that the consumer is willing to invest both time and effort. - ex: consumer sees the decision as high risk, buying your first car

differentiated

The total market is divided into market segments with more than one segment selected to target

concentrated

The total market is divided into market segments with only one segment being selected to target

undifferentiated

The total market is treated the same with no segmentation

The first effort potential buyers make when considering a purchase is:

To consider what they already know

a ______ targeting strategy is one for which the market chooses to avoid the segmentation process and treats the total market as a single segment

Undifferentiated

the _____ strategy was common 100 years ago but it is rarely viable today

Undifferentiated targeting

target market

an identified market segment on which a company will focus its marketing efforts

consumers

are end users of a product who purchase it for their own use

B2C means

business to consumer transaction

The most important reason a business chooses to engage in product positioning is to achieve:

competitive advantage

To be _______, an organization must deliver ______.

competitive; value

the ____ step in the segmentation process focuses on decision which factors are relevent in understanding buyer behavior in the market of interest

identification of segmentation bases

Marketers know that it is _____ costly to satisfy existing customer than to attract new customers

less

_________ oriented companies recognize that they cannot effectively meet the needs of everyone in the total market.

market

purchasing of business services by institutions or any other business buyer us also called

outsourcing

The acronym STP stands for segmentation, targeting, and ______.

positioning

When Mini Cooper portrays its brand as the vehicle that is more fun to drive than a VW Beetle or a Ford Focus, it is practicing product _________

positioning

Marketing research can be used to better understand both opportunities and _____

problems

types of business buyers

producers, resellers, government, institutions

business buyers

purchase products with the intention of either using that product in the production of another product or reselling it for a profit

Types of Consumer Decisions

routine response behavior, limited problem solving, extensive problem solving

The most important function of marketing is to _______ customers.

satisfy

the result of the ______ process should be the selection of one or more target markets

segmentation

The END result of market segmentation should be selection of (a) ______.

target market(s)

A ______ market is an identified market ______ on which a company will focus its marketing efforts.

target; segment

described as one of the biggest purchasers of goods and services

the government

Business buyers purchase products to be used in carrying out their business functions while consumers purchase product for ________

themselves

business purchases and consumer purchases follow different processes

true