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CHAPTER 11

CHAPTER 11. Understanding Marketing Processes and consumer behavior. WHAT IS MARKETING?. Marketing ( التسويق ) is defined as the process of: Planning and executing the conception (idea) ( تخطيط وتنفيذ مفهوم ) (having an idea for a product or service and making it a reality)

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CHAPTER 11

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  1. CHAPTER 11 Understanding Marketing Processes and consumer behavior Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  2. WHAT IS MARKETING? Marketing (التسويق)is defined as the process of: • Planning and executing the conception (idea) (تخطيط وتنفيذ مفهوم) (having an idea for a product or service and making it a reality) • Pricing (setting a price consumers will pay) • Promotion (الترقيه) (advertising the product to tell people about it) • Distribution (توزيع) (placing the product in stores where people will see it – and want to buy it) • Of ideas, goods, and services to create exchanges (تبادلات) (buying and selling) that satisfy individual (people) and organizational (company) objectives. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  3. PROVIDING VALUEAND SATISFACTION (1) What attracts buyers to one product and not another? • Value (القيمه) compares a product’s benefits with its costs • A satisfied buyer believes the benefits (الفاءدات) gained from purchasing the product are greater than the cost of purchasing the product (satisfied buyer = Benefits>Cost) Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  4. PROVIDING VALUEAND SATISFACTION (2) Satisfaction (or utility) is the ability of a product to satisfy a human want or need • Marketing tries to provide four forms of satisfaction or utility: • Time – when is the product purchased • Place – where is the product purchased • Ownership – the terms of sale of the product • Form – the features of the product Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  5. MARKETING: GOODS, SERVICES, AND IDEAS The marketing of products can be divided into four main categories: • Consumer goods • Industrial (الصناعية) goods • Services • Ideas Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  6. GOODS • Consumer goods are products that we buy for personal use (استعمال الشخصي): Example: Cars, Telephones, Clothes, Medicines • Companies that sell products to consumers for personal use are engaged in consumer marketing • Industrial goods are products used by companies to produce other products: Example: Aluminum, Plastic, Steel Construction equipment (معدات البناء) • Companies that sell products to other manufacturers are engaged in industrial marketing • Services are intangible (الحاجة المعنوية) goods (things you cannot see and touch) such as: Example: Time with a lawyer, Expertise of a financial planner, Insurance for your car, hairdresser, gym • Companies that sell services are engaged in service marketing • Marketers also promoted ideassuch as: Example: Driving safely, health problems caused by smoking, keep Bahrain tidy. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  7. RELATIONSHIP (العلاقة) MARKETING • Marketing sometimes focuses on one purchase – we need or want the product, and we go and buy it. This is a single transaction (معاملة واحدة) – one purchase from one company. • Relationship marketing tries to build long-lasting relationships with customers - to keep the customer coming back again and again so that there are many transactions – many purchases from the same company…..(Example: centerpoint card, Jawad loyalty card, sky wards card, gifts) Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  8. THE MARKETING ENVIRONMENT • Marketing programs of companies can be influenced (تأثر) by the company’s external environment (البيئة الخارجية)– things outside the company that can influence the marketing program • Sometimes these outside factors can be opportunities(الفرص) (good things) and sometimes they can be threats (التهديدات) (bad things) • These external factors are: • Political-legal, • Social-cultural, • technological, • economic, • competitive environments. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  9. EXTERNAL FACTORS INFLUENCING MARKETING (1) • Political and Legal Environment (البيئة السياسية والقانونية): Government regulations can influence a company’s business: • A law banning smoking cigarettes in malls and restaurants would influence tobacco companies. • A law banning using mobile phones in cars would influence mobile phone providers. • Social and Cultural Environment (البيئة الاجتماعية والثقافيه): Values, beliefs and ideas (القيم والمعتقدات والأفكار) of consumers influence what they buy: • Today, more people want to join fitness clubs to keep good health – so more fitness clubs have opened • More women drive cars – so car manufacturers have made the interiors of cars more pleasing to women Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  10. EXTERNAL FACTORS INFLUENCING MARKETING (2) • Technological Environment (بيئة تكنولوجيه): New technologies affect how products are marketed • New products are available such as the satellite dish, internet shopping. • A new product – the CD – can make an old product – the audiotape – obsolete (الباليه) • Economic Environment (البيئة الاقتصادية): The economic conditions in a country influence the way consumers buy goods • If the economic conditions in the country are good (high employment, low inflation) – consumers spend money • If the economic conditions in the country are not good (high unemployment, high inflation) – consumers do not spend money. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  11. EXTERNAL FACTORS INFLUENCING MARKETING (3) • Competitive Environment (بيئة تنافسية): A marketing program tries to make one product seem more attractive (جذاب) than another product. The goal of the marketer is to make the consumer spend his or her money on their company’s product – not on a similar product produced by another company – a competitor. • The consumer has money to purchase one item – so BHS is going to try to make their products seem more attractive so that the consumer spends money in BHS – not in Debenhams Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  12. THE MARKETING MIX • When marketing managers plan their marketing campaigns, they rely on the “Four P’s” of marketing: • Product, Pricing, Promotion, Place (المنتجات والتسعير والترويج والمكان) (P 255 / 4th & P 294 / 5th) Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  13. Marketing Mix • Product Marketing begins with a product – a good, service, or idea designed to fill a consumer need (or want!) Product differentiation (المفاضله بين المنتجات) describes the way manufacturers try to make the image or features (ميزات) of their product appear different – and better – than other similar products • Example: Manufacturers of cars may advertise their products in a way that makes them seem safer, faster, or better designed than other makes of cars. • Pricing Pricing a product is selecting the most appropriate (مناسب) price at which to sell it. • The product must be priced high enough that the company making the product will make a profit. The product cannot be priced too high – if it is too high, consumers will not buy it. A “middle” price has to be found – one that makes a profit for the manufacturer and is also acceptable to the consumer. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  14. MARKETING MIX • Place Place refers to the distribution(توزيع) of the product – placing the product for sale in the proper outlet – perhaps a retail store. • Products must be transported from the manufacturer to the retail store – by plane, by road, by rail. • Products may also have to be stored in a warehouse before being sold and the correct inventory has to be decided. • Promotion (الترقيه) is the way in which manufacturers communicate information about their products to consumers. • Examples: Advertising, Personal Selling, Sales Promotions, and Public Relations Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  15. CHOOSINGTHE MARKETING MIX • Product – The basic design of the product + • Price – How much the consumer will pay + • Place – Where and when the product is available + • Promotion – Product image and visibility = • Customer satisfaction and business profitability Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  16. Promotion: ADVERTISING Advertising (الاعلان) is any paid non-personal communication used to identify a product. To advertise products, companies use: • Newspapers • Magazines • TV • Radio • Billboards • Internet Web Sites Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  17. Promotion: PERSONAL SELLING • This is person-to-person selling – the sales representative of one company visits the purchasing agent or another company to inform the purchasing agent about the product • Personal selling to consumers is done through sales clerks in stores, insurance salesmen for car and home insurance, and real estate agents when buying land or houses • These are used to encourage consumers to buy products – they are used to “promote” sales Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  18. Promotion: PUBLIC RELATIONS (العلاقات العامة) • Public relations are used to build goodwill and a favorable attitude (وحسن النية وبناء موقف إيجابي) towards the company or product. • Companies hope that by building goodwill towards their company, consumers will buy more of their products • Companies such as Batelco sponsor sports teams (في رعايه الفرق الرياضية) to help young people become involved in sporting activities. • McDonald’s funds “Ronald McDonald Houses” – houses where the parents of sick children can stay at no cost while their children are in the hospital in a different city from where their own home is located. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  19. TARGET MARKETING AND MARKET SEGMENTATION • All people do not want or need the same products and services, therefore we target market (هدف التسويق). • Target marketing – groups of people with similar wants and needs. • Identifying the target market is usually the first step in developing a marketing strategy (وضع استراتيجية تسويق). • Example: Clothes – we all need clothes – but we want different types of clothes – teenagers want different clothes from their parents. Teenagers are one target market; parents are another. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  20. MARKET SEGMENTATION (تجزئة السوق) • This refers to taking a target market – teenagers – and dividing (تقسيم) the total market into customer types or “segments”. • Clothing manufacturers make different types of clothes to appeal to the tastes of different types of teenagers. • Cars are another good example – there are many different types of cars from a small Honda Civic to a large Range Rover. They are all cars – but very different types of cars – and they attract different types of customers. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  21. UNDERSTANDINGCONSUMER BEHAVIOR • What makes us buy one product and not buy another? • Why do we buy a Nokia phone and not an Eriksson phone? • Consumer behavior (سلوك المستهلك) is the study of the decision process by which customers come to purchase and consume products (P 261 / 4th & P 299 / 5th) Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  22. INFLUENCES ONCONSUMER BEHAVIOR (1) • What influences (تأثيرات) our behavior when we buy a product? • Is it our own motivations, abilities, and attitudes – the need to impress others by driving a large, expensive car? (Psychological influences (التأثيرات النفسية)) • Is it our lifestyle – a mother with three young children will find it easier to drive the children in a jeep instead of a small car. (Personal influences (التأثيرات الشخصيه)) • Is it the opinion of our family and friends who recommend a certain car because they have had good experience with that car? (Social influences (التأثيرات الاجتماعية)) • Is it because all of our family and friends own similar cars – and we want to “fit” into the group? (Cultural influences (التأثيرات الثقافيه)) Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  23. Brand Loyalty and THE CONSUMERBUYING PROCESS • Brand Loyalty ((العلامه التجارية ولاء)) means that consumers regularly purchase the same products because they are satisfied with the performance of the product. Marketers study the consumer buying process (عملية شراء المستهلك) to find out what influences a consumer: • From the time the consumer decides he or she needs a product • To the time the consumer buys the product • Until the time the consumer uses (or consumes) the product • Imagine you decide to buy a new mobile phone. What would interest marketers in how you made your decision as to which mobile phone to buy? Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  24. The Consumer Buying Process[1] 24 1. Problem/need recognition (المشكلة / الحاجة الى الاعتراف): the first step where the consumer recognizes a problem or need. Example: after exercise, you may realize that you are thirsty (need to buy water). 2. Information seeking (البحث عن المعلومات): the second step is to search for information, not always extensive search, but in major purchases (like buying a car) most people seek information from personal sources, public sources, and experiences. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  25. The Consumer Buying Process[2] 25 3. Evaluation of alternatives (تقييم البدائل): by analyzing product attributes (color, price, quality) you can will compare products before deciding which one best meets your record. 4. Purchase decision (قرار الشراء): “buy” decisions are based on rational motives, and emotional motives. • Rational motives (دوافع الرشيد): reasons for purchasing a product that are based on a logical evaluation of product attributes. (cost, quality, usefulness) • Emotional motives (دوافع عاطفيه): Reasons for purchasing a product that are based on nonobjective factors. (sociability, imitation of others). Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  26. The Consumer Buying Process[3] 26 5. Post purchase evaluation (بعد شراء التقييم): what the consumer feel after the sale is important. Marketers want the customers to be happy after buying the product so they can buy them again. consumers do not want to go through complex decisions process for every purchase, they often repurchase products they have used and like. unsatisfied consumer are not likely to buy the product again, and they will more broadcast their bad experience rather than satisfied consumers. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  27. WHAT IS A PRODUCT? • When consumers purchase a product – ideas, goods, or services – they actually purchase much more than the product itself. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  28. PRODUCTFEATURES and Benefits • Product features (ميزات) are the qualities that a company builds in to its products. • Product benefits (الفاءدات) are what use of the product gives you Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  29. VALUE PACKAGE (قيمة الصفقة) • Today’s consumer sees a product as a “bundle” or “group” of attributes (الصفات) (features and benefits) that together form the “value package” • Buyers expect to receive products with greater value – products with more features and benefits at a reasonable cost • Some of these possible attributes for the purchase of a personal computer are listed on the next side Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  30. PERSONAL COMPUTERVALUE PACKAGE • Choices in monitors, keyboards, and processing capabilities • Choices in colour • Attractive software packages • Attractive prices • Fast delivery • Warranties (guarantees) • Technical support • Prestige of owning a “state-of-the-art” computer system Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  31. CLASSIFYING (تصنيف)GOODS & SERVICES • One way to classify products (to put them into groups) is according to expected buyers. • There are two groups of buyers: • Buyers of consumer products (المنتجات الاستهلاكيه) • Buyers of industrial products (المنتجات الصناعية) Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  32. CLASSIFYINGCONSUMER PRODUCTS Consumer products are usually divided into three groups: • Convenience (راحة) Goods & Convenience Services • Shopping Goods and Shopping Services • Specialty (التخصص) Goods and Specialty Services Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  33. CONVENIENCE GOODSAND CONVENIENCE SERVICES • These convenience (easy) products and services are purchased and consumed often • They are inexpensive, purchased often (sometimes daily) and with little thought: groceries and newspapers and take-away foods • Consumers will buy these goods at the first available store which sells them Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  34. SHOPPING GOODSAND SHOPPING SERVICES • These are products and services which cost more money and are purchased less often • These are goods such as TVs, CD players, washing machines, home furniture and services such as car insurance. • Consumers “comparison shop (مقارنة متجر)” for these products – they look at different brand names and go to different stores to get the best value for their money. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  35. SPECIALTY GOODSAND SPECIALTY SERVICES • These are goods and services which consumers view as extremely important purchases. • They are products which are purchased rarely and are usually very special to the consumer. They are expensive products and services such as: wedding dresses, gold jewelry, and services like wedding receptions at hotels. • Before shopping for these goods or services, consumers usually know exactly the type of product they want – and will accept no other product. Consumers will spend a great deal of time and a lot of money to get the exact product they want. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  36. CLASSIFYINGINDUSTRIAL PRODUCTS • Industrial products are divided into two types: • Expense items and capital items • These two items are divided by cost and how they will be used Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  37. EXPENSE ITEMS • Expense items are materials and services that are consumed quickly and regularly (within one year) by firms which produce other products or services. • Soft drink manufacturers such as Pepsi buy aluminum cans – the company makes Pepsi but needs to buy cans to hold the drink. The company’s product is not cans – it is Pepsi. The cans are an expense incurred to make and sell the Pepsi. • The expense item is used up in producing the product the company sells – the cans are used up when selling the soft drink Pepsi. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  38. CAPITAL ITEMS • Capital items are permanent (دائم) (long-lasting) and expensive items which will be used by the company for many years. • These capital goods include buildings (offices and factories), fixed equipment (shelving and freezers in a grocery store, baking ovens in a bakery, the equipment which makes the Pepsi drink in the factory) and accessory equipment (busses in the National Transportation Company, computers in NBOB’s office building, aircraft at Gulf Air). • Capital services may include food services for employees and building and equipment maintenance. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  39. THE PRODUCT MIX • The product mix is the group of products a company makes available for sale – consumer products, industrial products, or both. • The textbook uses the example of the Black & Decker company. • This company makes toasters, kettles, vacuum cleaners, and electric drills – a variety of different products made by the same company. (P 267 / 4th & P 306 / 5th) Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

  40. PRODUCT LINES • Many companies begin business selling one product only • Over time, they find that the one product does not fill the needs of every consumer – and so they introduce other similar products to meet the needs of different consumers….. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall

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