MARKETING

1. MARKETING Essential Standard 3.00 Objective 3.02 Understand buying behaviors.

2. Topics • Marketing Strategy • Consumer Decision-Making Process • Major Sources of Consumer Information • Shopping Locations

3. What does a marketing strategy* do? • provides vital information on how a business will meet its goals of • satisfying customers and • making sales and profits. (*Strategy is a plan of action designed to help you reach goals) • Two Steps: • Target Market • Marketing Mix

4. Steps in a Marketing Strategy • Two steps to a marketing strategy: • First, Identify a target market • A target market consists of a group of people that have similar needs and wants. • Examples: • Homeowners who decorate homes • People with domestic pets • Parents concerned about children’s nutrition • Children who participate in athletics • Second, Create a marketing mix • A marketing mix consist of a blending of the marketing elements (product, price, place-distribution, and promotion) • Example: advertisements in home décor magazines give discounts for paint • Coupons for discounts on new pet food, apparel, toys • Free samples of children’s foods • Contests for free athletic equipment

5. Applying A Market Strategy • Part 1 • Determine your target market. This is the group that you want to reach with your market strategy. • Part 2 • Use the marketing mix to implement your strategy by making decisions about: • What your business is going to make/sell (Product/service) • What prices will be (Price) • How you will deliver to customers (Place-Distribution) • How you will make customers aware of your product/service (Promotion) A successful marketing strategy satisfies the wants and needs of the target market. It also provides profit to the company.

6. What is a Target Market? • A specific group of consumers that have similar wants and needs. • 4 types of segmentation: • Demographic (age, gender, income, ethnicity) • Geographic (location) • Psychographic (values, attitudes, & lifestyles) • Behavioral (why customers buy the product)

7. Why is the blend of the Marketing Mix (4Ps) Important? • blending of the marketing mix - product, place (distribution), price, and promotion • Why? • To satisfy the wants and needs of the target market • To provide profit for the company

8. Consumer Decision Making Steps in the consumer decision-making process: • Recognize a need or want • Gather information • Select and evaluate alternatives • Make a purchase decision • Determine the effectiveness of the decision

9. Decision-Making • Extensive • Occurs when there is a high level of perceived risk, a product or service is very expensive or has a high value to the customer. • Limited • Occurs when a customer buys products that he or she has purchased before but not regularly. • Routine • Occurs when little information is needed about the product being purchased.

10. Questions Consumers AskRelated to Purchasing Decisions • Do I really need the item now? • Instant gratification • Which store should I consider? • choices • What quality do I expect? • What price am I willing to pay? • Should I pay cash or use credit? • Will have to do without something else I truly need if I buy this item? • How long am I willing to wait for this item? • Delayed gratification • Is this an emotional or rational purchase?

11. Why People Buy • Emotional Motives • Reasons to purchase based on feelings, beliefs, and attitudes • Example: You purchase a gift and card on Mother’s Day triggered by feelings of love and affection • Rational Motives • Reasons to purchase guided by logic and facts • Example: If you want to buy a cost effective car; then consider fuel costs, repair costs of various models, maybe a hybrid.

12. Major Sources of Consumer Information

13. Product Testing Organizations Providing Consumer Info • Test products and services to detect benefits, problems • Examples • Underwriter Laboratories • Association of Home Appliance Manufacturers • Consumers Union (Independent testing organizations)

14. Media Sources Providing Consumer Information • Provide specific information about products and services. • Types of media sources: • Print Examples • Magazines- Consumer Reports, Kiplinger’s Finance Magazine, Consumer’s Digest, Good Housekeeping • Newspapers – news and commentary articles about consumer issues, public information • Broadcast Organizations Examples • Radio- public information, news issues • Television- public information, news issues • Internet

15. Government Agencies Who Provide Information to Consumers • Inform consumers and handle consumer questions. • Types • Federal • USDA, FDA, HUD, CPSC, FTC, FCC, FCC, CDC (Center for Disease Control) • State • Attorney General, Justice Dept, Dept of Commerce • Local • Health Department, Department of Aging • What are some ways that government agencies protect people?

16. Business Sources of Consumer Information • Business sources are available as a public service and to sell products and services. • Types • Product labels provide helpful information about nature of product, how to care for product, where product was made, and the size of the product. • Customer Service Departments focus on assisting customers. • Better Business Bureau (BBB) provide facts about products or services. www.charlotte.bbb.org

17. Major Sources of Consumer Information • What kinds of information have you obtained from an advertisements? • How did you use the information obtained from the advertisement? • What product label have you used? • How was the information obtained from the product label used? • Poison – nutrition – warnings – warranty - directions

18. Personal Contacts Providing Consumer Information “Word of mouth” Advertising • Do you trust information provided by other people who have bought and used a product? • Can be helpful in making a decision about a product.

19. The Complaint Process 1. Contact place of purchase *provide evidence of purchase and problem 2. Contact company headquarters *phone, email or write letter providing fact about situation. Be specific on what action you want them to take. 3. Involve an appropriate consumer agency *local, state, or federal agency 4. Take legal action *alternative dispute resolutions, class action lawsuit, small claims court, hire a lawyer Consumer Rights & Responsibilities – Remedy, Service

20. Shopping Locations Competitive markets and technology provide consumers with a variety of shopping locations. Where are your favorite locations to shop?

21. Market Economy = Dollars vote Basic economic decisions are based on the actions of buyers and sellers in the market. • Price • The amount of money given or asked for, when goods or services are bought or sold. • Marketplace • Any place where individuals buy and sell goods and services • What does it mean to barter? • Do you negotiate for what you want to buy?

22. Traditional Retailers nicknamed “bricks and mortar” • Department Stores • Supermarkets • Discount Stores • Specialty Stores • Convenience Store

23. Types of Merchandisers - Department Stores • Different departments within a store sell a variety of products – men’s, women’s, children’s clothing, home furnishings, jewelry • Goods are moderately priced, but not lowest • Salespeople available to assist • Special services available (gift wrapping, delivery) • Elaborate merchandise displays • Offer charge cards, registries for wedding/baby gifts • Examples: Macy’s, Nordstrom’s, Saks Fifth Avenue, Belk

24. Types of Merchandisers- Supermarket- Safeway, Walmart Large, full service store offers large variety of brands & products -items such as books, hardware, sporting goods, clothing, pharmacy, grocery, photography, general merchandise, at reasonable or low prices • Often nationwide stores • Practical displays • Limited service is available

25. Types of Merchandisers- Specialty stores • Sell only one kind of merchandise • clothing stores, athletic goods stores, home appliance stores, hardware stores • services vary, selling methods and prices vary • Examples: Limited, GAP, Foot Locker, Kay Jewelers, Pier One, Dick’s Sporting Goods

26. Types of Merchandisers- Discount Stores • Discount Stores- Highlight their offering of lower prices for products- still profit since have high volume with low profit margin % • Examples? Walmart, Target

27. Types of Merchandisers- Convenience Stores • Usually located in highly accessible areas; main highways, intersections, near subdivisions • Provide popular items • Higher prices • Offer longer operating hours • Examples? • Circle K, 7-11, stores at gas stations

28. Contemporary Retailers • Specialty Superstores • Superstores • Warehouse Club • Factory Outlets • Non-Store Shopping

29. Types of Merchandisers- Contemporary Retailers • Specialty Superstores • Provide wide variety of limited products at low prices • What are some examples? • Office Max, Home Depot, Best Buy • Superstores • Provide a wide variety products in the retail services such as food, RX, clothing, banking, bakery, auto, sporting goods, and electronics. • What are some examples? • Super Walmart, Super Target, SuperKmart

30. Types of Merchandisers- Contemporary Retailers • Warehouse Club • No frills • Service • Sales associates to help • Few aesthetics- displays • Limited selection • Focusing on: • sale of large quantities • practical prices • What are some examples? Sam’s Club, BJ’s

31. Types of Merchandisers- Contemporary Retailers – Factory Outlets • Operated by manufacturer • carry only that manufacturer’s brand or an affiliated manufacturer • Discounted prices • Provide high-quality products at lower prices • Products come direct from factory • Cut out middleman; less cost • Products sometimes have flaws • “seconds”- not 1st quality, • pulled from inventory during quality control function of production • Examples: Easy Spirit, Carter’s, Peaches and Cream, Corning , Loft

32. Types of Merchandisers- Non-Store Shopping • Allows purchasing of goods and services by telephone, computer, television, fax, or door-to-door. • Example: Vending Machines • Vending machines provide products through automation • What are some examples of vending machine shopping opportunities? • Food products, small packages of essentials for travelers • More and more products are available from vending machines • On college campuses…even ice cream vending machines • In Japan - toys, flowers, toilet paper, eggs http://www.fwi.co.uk/Articles/2010/04/20/120860/Egg-vending-machine-a-hit.htm www.flickr.com/photos/hartsell/4870530853/

33. Types of Merchandisers- Non-Store Shopping • What are some examples of non-store shopping opportunities? • Vending machines • Telephone shopping • Online shopping • Door to door • QVC on television • Catalog ordering • Computerized non-store retailers often called “Etailers”. • Electronic Retailers • Look up “Etailers” on Wikipedia. Write a definition in your notes.

34. Factors Affecting Decision-Making • Rank from 1-9 the factors affecting your purchasing decisions • Price: sales, clearance, your budget • Location: Convenience of store location, layout • Services: gift wrap, layaway, full customer service, # of checkout lines, credit cards accepted • Perceived value of product, store • Advertising and promotions • Peers: “Keeping up with Jones” • Brand loyalty: have to have this brand • Emotional motive: impulsive buying • Rational motive: reasoned out, planned, budget