Exploring

Your
Chapter IV
MARKET

Markets & Marketing

Market

= those people or organizations

that may be interested in buying a
product or service, have the resources
to buy it, and are permitted by law or
regulation to do so

Marketing

= satisfying the customer at

a profit
The

business function that identifies your

customers and their wants and needs

The

engine that drives ALL business

decisions

Marketing Research
Primary

= research
conducted directly on a
subject or subjects
Secondary = research
carried out indirectly
through other existing
resources

Primary Research Methods

Personal interviews
Telephone surveys
Written surveys

Primary Research Methods

Focus

groups

Afocus

groupis a form of
qualitative research in which
agroupof people are asked
about their perceptions,
opinions, beliefs, and attitudes
towards a product, service,
concept, advertisement, idea,
or packaging.

Observation

Primary Research Methods

Tracking
Tracking

studies also allow

marketers to study changes in the
customer market for their brands,
such as increases and decreases
in category usage, changes in
customer needs, development of
new customer segments, and
changes in customer loyalty and
retention.

Review

of books & records

Secondary Research Methods

Online

searches
Article & book searches
Competitor websites

Visualize Your Customer

Use market research to find out:

Who your potential customers are

Where you can reach them

What they want and need

How they behave

What the size of your potential

market is

Customer Research
Surveys
Focus groups
Research reports

Industry Research
Interviews
Observation
Tracking
Written
Books

sources of statistical data

& articles

Competitor
Trade

websites

associations & chambers of

commerce

Customer Decision-Making
Awareness
Information
Evaluation
Decision

search

of alternatives

to purchase

Evaluation

of purchase

Owning Customer Perception

Features

create benefits.

Feature

= a fact about a product

or service

Benefit

= what the feature can do

to meet a customers needs

Needs,

wants, and demands are

different.

Market Segmentation
strategy

which involves
dividing a broad target
marketinto subsets of
consumers, businesses, or
countries who have, or are
perceived to have, common
needs, interests, and
priorities, and then designing
and implementing strategies
to target them.

Market Segmentation
Market segment = customers who have
similar response to a certain type of
marketing
Segmentation methods
Geographic
Demographic
Psychographic
Behavioral

GEOGRAPHIC
SEGMENTATION
separates

a market into
different geographical
boundaries which can
impact the marketing mix
of product, price,
promotion and channel to
market.

DEMOGRAPHIC
SEGMENTATION
separates

a market by
demographic indicators
including gender, age,
household type, education
level and income.

PSYCHOGRAPHIC
SEGMENTATION
separates

a market by
lifestyle as well as values
and beliefs.

BEHAVIORAL
SEGMENTATION
separates

a market by
shopping and buying behaviors.

Are you an online shopper or do you prefer to

handle products in the store?

How often do you shop? Do you research a

purchase carefully before making a decision,
or do you tend to buy on impulse?

THE CONSUMER BUYING

DECISION PROCESS
BY: Engel,BlackwellandKollat

I. NEED RECOGNITION /
PROBLEM RECOGNITION :
The

need recognition is the first and most

important step in the buying process. If
there is no need, there is no purchase.
This recognition happens when there is a
lag between the consumers actual
situation and the ideal and desired one.

type of needs:
Functional

need: the need is related to a

feature or specific functions of the product
or happens to be the answer to a functional
problem.

Social

need: the need comes from a desire

for integration and belongingness in the
social environment or for social recognition.

Need

for change: the needhas its origin in

a desire from the consumer to change.

II. INFORMATION SEARCH

He

willsearch more or less information

depending on the complexity of the
choices to be made but also his level of
involvement.
Internal

information: this information is

already present in the consumers memory.

External

information: This is information on a

product or brand received from and obtained
by friends or family, by reviews from other
consumers or from the press.

III. ALTERNATIVE
EVALUATION
Once

the information collected, the

consumer will be able to evaluate
the different alternatives that
offer to him, evaluate the most
suitable to his needs and choose the
one he think its best for him.

IV. PURCHASE DECISION

Now

that the consumer has

evaluated the different solutions
and products available for respond
to his need, he will be able to
choose the product or brand that
seems most appropriate to his
needs. Then proceed to the actual
purchase itself.

V. POST-PURCHASE
BEHAVIOR

Once the product is purchased and used,

the consumer will evaluate the adequacy
with his original needs (those who caused
the buying behavior). And whether he has
made the right choice in buying this product
or not.

He will feel either a sense of satisfaction

for the product (and the choice). Or, on the
contrary, a disappointment if the product
has fallen far short of expectations.

An example of Consumer
Buying Decision Process:
STAGE

1 NEED
RECOGNITION:
Its

sunday night. Youre hungry

(internal physiological stimuli)
and there is nothing in the
fridge. You will order food
(statement of need).

 STAGE
You

2 INFORMATION SEARCH

already have ordered to the

Indian restaurant in your street last
month (internal information). A
friend recommended a pizzeria in
your neighborhood (external
information from environment). And
this morning youve found a flyer for
a sushi restaurant in your mailbox
(external information from
advertising).

 STAGE

3 ALTERNATIVE
EVALUATION:
You

have a bad opinion of the

Indian restaurant since youve been
sick the last time (inept set). The
pizzeria is both recommended by
your friend and also happens to be a
well-known brand (positive
perception evoked set). As for the
sushi restaurant, it got good reviews
on Tripadvisor (positive perception
evoked set).

 STAGE

4 PURCHASE
DECISION:
After

evaluating the
possibilities, youve decided to
choose the well-known pizza
delivery chain. In addition, a
new episode of your favorite
TV show is broadcasted tonight
on TV.

STAGE

5 POST-PURCHASE
BEHAVIOR:
The

pizza was good (positive

review). But you know there was
too many calories and you regret a
little bit (mixed feelings about
yourself). The next time you will
choose the sushi restaurant. There
is less fat in sushi than pizza (next
purchase behavior)!

Product Life Cycle (PLC)

Stages
1.
2.
3.
4.

Introduction
Growth
Maturity
Decline

Where is your product/service in the PLC? Is

your market saturated?

Introduction Stage

Consumer awareness and acceptance of

the product are low.

Sales gradually increase due to promotion

and marketing activities.

Cost of development and marketing

activities are high.

Low profit or even incurs loss.

Buyers are individuals who want to be the

first in the community to own the
product.

Growth Stage
Sales

rapidly rise as the product

becomes popular.

Profits

for the firm and industry

increase.

Product

distribution is expanded.

Promotion

still plays a vital role in

marketing the product.

Maturity Stage
Sales

are still rising at the

beginning of this stage but the rate
of increase has declined.

The

sales curve will reach its peak

while profits begin to fall.

Price

competition increases which

forces inefficient competitors to
get out of the industry.

Decline Stage
There

is a sharp fall in sales volume

while profit curve becomes almost
flat or horizontal.
There is also a decline in the
number of competitors.
You can only survive if you will
specialize in marketing your
product.
Once the product is no longer
profitable, it will be eliminated
from the market.

Market Positioning

Distinguish your product/service from

others offered to your market segment.

Goal is to clearly communicate how your

product/service differs from competitors.

Sample positioning statement:

(General Motors) is the (leading US
automobile maker) that (provides
affordable cars) to (American families).

SWOT Analysis
It

studies the financial resources,

physical facilities, management
capabilities, the market, production
process, information system, sources of
supply, and social environment.

It

is a tool of evaluating the strengths,

weaknesses, opportunities and threats
associated with a particular product or
service.

INDICATORS OF SWOT:

STRENGTHS:
Cheap

and abundant raw materials

Sufficient

funds

Availability
Presence

of Technology

of Skilled Workers

Management

and technical expertise of

the entrepreneur

Good
Ease

quality/service

of production

Small

capital

INDICATORS OF SWOT:

WEAKNESSES:
High

Prices

Poor

Quality/Service

Weak
Lack

Management

of Skilled Workers

Irregular

supply

Unattractive
High

design

Costs of Production

INDICATORS OF SWOT:

OPPORTUNITIES:
Big

demand for the product or

service

Favorable

government
policy/support

Scarcity

of the product/service

Poor

quality of existing product or

service

Absence

of product/service

Possibilities

of good profits

INDICATORS OF SWOT:

THREATS:
Shortage

of raw materials at a given

time
Entry

of many competitors

Increasing

costs of production

Expectation

of unfavorable
government laws, such as taxes

Deteriorating
Emergence

peace and order

of unfair demands of
workers through union activities

Thank you for listening