Foundations of Marketing David Jobber and John Fahy

1. © The McGraw-Hill Companies, 2009 1 Foundations of Marketing David Jobber and John Fahy

2. © The McGraw-Hill Companies, 2009 2

3. © The McGraw-Hill Companies, 2009 Customer Types Organisational Customers Purchase: For use in the operation of a business or organisation. To manufacture other products For resale to others Private Consumers Purchase: For personal or household use

4. © The McGraw-Hill Companies, 2009 4 Understanding Customers

5. © The McGraw-Hill Companies, 2009 Who Buys?The Buying Decision Making Process

6. © The McGraw-Hill Companies, 2009 Phillips Juicer Advertisement clearly targets parents of young children who are concerned about their nutrition and health Note: Replace ad with Exhibit 3.1 (Cow and Gate Growing up Milk) Note: Replace ad with Exhibit 3.1 (Cow and Gate Growing up Milk)

7. © The McGraw-Hill Companies, 2009 7 How do they buy?The Consumer Decision-Making Process Note: Changed ‘ post-purchase evaluation of alternatives’ to ‘post-purchase evaluation of the decision’. Note: Changed ‘ post-purchase evaluation of alternatives’ to ‘post-purchase evaluation of the decision’.

8. © The McGraw-Hill Companies, 2009 8 How do they buy?The Organizational Decision-Making Process

9. © The McGraw-Hill Companies, 2009 9

10. © The McGraw-Hill Companies, 2009 Bang & Olufsen Advertisement provides Highlights both rational and emotional factors likely to influence purchase Note: Replace ad with exhibit 3.4 (SEAT Ibiza)Note: Replace ad with exhibit 3.4 (SEAT Ibiza)

11. © The McGraw-Hill Companies, 2009 11

12. © The McGraw-Hill Companies, 2009 Bravia Campaign Advertisement Demonstrates the visual power of colour and conveys the key brand proposition Note: Insert Exhibit 3.5 (Easy Cruise)Note: Insert Exhibit 3.5 (Easy Cruise)

13. © The McGraw-Hill Companies, 2009 13 Behavioural Learning Theories: Classical conditioning: is the process of using an established relationship between a stimulus and a response to cause learning Operant conditioning: individual respond to the stimulus that offers the most satisfactory rewards and subsequently the behaviour is repeated. The more rewarding the response, the more likelihood of a repeat purchase

14. © The McGraw-Hill Companies, 2009 14 Behavioural Theories and Marketing Classical conditioning uses an established relationship between stimulus and response to cause learning – In advertising humour is known to elicit a pleasant response and is used in the belief that these pleasant feeling will be a condition of the product. Operant conditioning is reinforcement through rewards – The use of free samples is based on these principles

15. © The McGraw-Hill Companies, 2009 Red Bull Advertisement uses humour to appeal to its target market of young adults Note: Replace ad with exhibit 3.4 (SEAT Ibiza)Note: Replace ad with exhibit 3.4 (SEAT Ibiza)

16. © The McGraw-Hill Companies, 2009 16 Maslow 5 categories of motivation: Physiological Safety Belongingness and love Self-actualisation Esteem and status

17. © The McGraw-Hill Companies, 2009 17 Influences on Organizational Purchasing Behaviour

18. © The McGraw-Hill Companies, 2009 18 Product Types in Organisational Buying:

19. © The McGraw-Hill Companies, 2009 19 Developments in Organizational Purchasing Practice Just-in-time purchasing Online purchasing Centralised purchasing Relationship Marketing Reverse marketing Leasing Note: Replaced ‘electronic marketplaces’ with ‘online purchasing’ and inserted ‘relationship marketing’ as ‘relationship marketing is no longer being given a section of its own.Note: Replaced ‘electronic marketplaces’ with ‘online purchasing’ and inserted ‘relationship marketing’ as ‘relationship marketing is no longer being given a section of its own.

20. © The McGraw-Hill Companies, 2009 20 Chapter Summary There are key differences between consumer and organizational buying. There are 5 roles in the buying decision making group: initiator, influencer, decider, buyer, user. The level of involvement is a purchase situation will affect the number of stages a consumer goes through before making a purchase decision. In consumer purchasing choice criteria can be categorised as: technical, social, economic and personal. The main influence on consumer buying behaviour are: the buying situation, personal and social influences. The main influence on organizational buying behaviour are: the buy class, the product type, and the importance of the purchase. There have been key innovations in purchasing practice.