Principles Of Marketing

Shopping Products & Speciality Products

Shopping Products

Shopping products are less-frequently purchased consumer products and services that customers compare carefully on suitability, quality, price, and style. When buying shopping products and services, consumers spend much time and effort in gathering information and making comparisons. Examples include furniture, clothing, used cars, major appliances, and hotel and motel services. Shopping products marketers usually distribute their products through fewer outlets but provide deeper sales support to help customers in their comparison efforts.

Specialty Products

Speciality products are consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. Examples include specific brands and types of cars, high-priced photographic equipment, designer clothes, and the services of medical or legal specialists. A Lamborghini automobile, for example is a specialty product because buyers are usually willing to travel great distances to buy one. Buyers normally do not compare specialty products. They invest only the time needed to reach dealers carrying the wanted products.

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Segment Marketing

A company that practices segment marketing recognizes that buyers differ in their needs, perceptions, and buying behaviors. The company tries to isolate broad segments that make up a market and adapts its offers to more closely match the needs of one or more segments. Thus, General Motors has designed specific models for different income and age groups. In fact, it sells models for segments with varied combinations of age and income. For instance, GM designed its Buick Park Avenue for older, higher-income consumers. Marriott markets to a variety of segments – business travelers, families, and others – with packages adapted to their varying needs.

Segment marketing offers several benefits over mass marketing. The company can market more efficiently, targeting its products or services, channels, and communications programs toward only consumers that it can serve best. The company can also market more effectively by fine-tuning its products, prices, and programs to the needs of carefully defined segments. The company may face fewer competitors if fewer competitors are focusing on this market segment.

Demographic Segmentation

Demographic segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race and nationality. Demographic factors are the most popular bases for segmenting customer groups, largely because consumer needs, wants, and usage rates often vary closely with demographic variables. Also, demographic variables are easier to measure than most other types of variables. Even when market segments are first defined using other bases, such as personality or behavior, their demographic characteristics must be known in order to assess the size of the target market and to reach it efficiently.

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Consumer buying decision process

Need Recognition

The buying process starts with need recognition – the buyer recognizes a problem or need. The buyer senses a difference between his or her actual state and some desired state.

Information Search

The stage of the buyer decision process in which the consumer is aroused to search for more information; the consumer may simply have heightened attention or may go into active information search.

Alternative Evaluation

The stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set.

Purchase Decision

The stage of the buyer decision process in which the consumer actually buys the product.

Postpurchase Behavior

The stage of the buyer decision process in which consumers take further action after purchase based on their satisfaction or dissatisfaction.

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Brand Equity

Brands vary in the amount of power and value they have in the marketplace. A powerful brand has high brand equity. Brands have higher brand equity to the extent that they have higher brand loyalty, name awareness, perceived quality, strong brand associations, and other assets such as patents, trademarks, and channel relationships.

A brand with strong brand equity is a very valuable asset. Measuring the actual equity of a brand name is difficult. However, according to one estimate, the brand equity of Marlboro is $45 billion, Coca-Cola $43 billion, IBM $18 billion. Disney $15 billion, and Kodak $13 billion. The world’s top brands include super-powers such as Coca-Cola, Campbell, Disney, Kodak, Sony, Mercedes-Benz, and McDonald’s.

High brand equity provides a company with many competitive advantages. A powerful brand enjoys a high level of consumer brand awareness and loyalty. Because consumers expect stores to carry the brand, the company has more leverage in bargaining with resellers.

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Core Concept of Marketing

The selling concept and the marketing concept are sometimes confused. The selling concept takes an inside-out perspective. It starts with the factory, focuses on the company’s existing products, and calls for heavy selling and promotion to obtain profitable sales. It focuses heavily on customer conquest – getting short-term sales with little concern about who buys or why. In contrast, the marketing concept takes an outside-in perspective. It starts with a well-defined market, focuses on customer needs, coordinates all the marketing activities affecting customers, and makes profits by creating long-term customer relationships based on customer value and satisfaction. Under the marketing concept, companies produce what consumers want, thereby satisfying consumers and making profits.

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Brand Extension

A brand extension involves the use of a successful brand name to launch new or modified products in a new category. Fruit of the Loom took advantage of its very high name recognition to launch new lines of socks, men’s fashion underwear, women’s underwear, athletic apparel, and even baby clothes. Honda uses its company name to cover different products such as its automobiles, motorcycles, snowblowers, lawn mowers, marine engines, and snowmobiles. This allows Honda to advertise that it can fit “six Hondas in a two car garage.”

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Factors influencing consumer behaviour

Consumer purchases are influenced strongly by these four factors.
01. Cultural Factor
02. Social Factor
03. Personal Factor
04. Psychological Factor

01. Cultural Factors that Influence Consumer Behaviour :-

Cultural factor is divided into three sub factors (i) Culture (ii) Sub Culture (iii) Social Class

(i) Culture:-  The set of basic values perceptions, wants, and behaviours learned by a member of society from family and other important institutions. Culture is the most basic cause of a person’s wants and behaviour. Every group or society has a culture, and cultural influences on buying behaviour may vary greatly from country to country.

(ii) Sub Culture :-

  • A group of people with shared value systems based on common life experiences and situations.
  • Each culture contains smaller sub cultures a group of people with shared value system based on common life experiences and situations. Sub culture includes nationalities, religions, racial group and geographic regions. Many sub culture make up important market segments and marketers often design products.

(iii) Social Class:- Almost every society has some form of social structure, social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests and behaviour.

02. Social Factors that Influence Consumer Behaviour :-

A consumer’s behaviour also is influenced by social factors, such as the (i) Groups (ii) Family (iii) Roles and status

(i) Groups :-

  • Two or more people who interact to accomplish individual or mutual goals.
  • A person’s behavious is influenced by many small groups. Groups that have a direct influence and to which a person belongs are called membership groups.
  • Some are primary groups includes family, friends, neighbours and coworkers. Some are secondary groups, which are more formal and have less regular interaction. These includes organizations like religious groups, professional association and trade unions.

(ii) Family:-

  • Family members can strongly influence buyer behaviour. The family is the most important consumer buying organization society and it has been researched extensively. Marketers are interested in the roles, and influence of the husband, wife and children on the purchase of different products and services.

(iii) Roles and Status :-

  • A person belongs to many groups, family, clubs, organizations.
  • The person’s position in each group can be defined in terms of both role and status.
  • For example. M & “X” plays the role of father, in his family he plays the role of husband, in his company, he plays the role of manager, etc. A Role consists of the activities people are expected to perform according to the persons around them.

03. Personal Factors that Influence Consumer Behaviour :-

It includes – i) Age and life cycle stage (ii) Occupation (iii) Economic situation (iv) Life Style (v) Personality and self concept.

(i) Age and Life cycle Stage:-  People change  the goods and services they buy over their lifetimes. Tastes in food, clothes, furniture, and recreation are often age related. Buying is also shaped by the stage of the family life cycle.

(ii) Occupation :- A person’s occupation affects the goods and services bought. Blue collar workers tend to buy more rugged work clothes, whereas white-collar workers buy more business suits. A company can even specialize in making products needed by a given occupational group. Thus, computer software companies will design different products for brand managers, accountants, engineers, lawyers, and doctors.

(iii) Economic situation :- A person’s economic situation will affect product choice

(iv) Life Style :- Life Style is a person’s Pattern of living, understanding these forces involves measuring consumer’s major AIO dimensions. i.e. activities (Work, hobbies, shopping, support etc) interest (Food, fashion, family recreation) and opinions (about themselves, Business, Products)

(v) Personality and Self concept :- Each person’s distinct personality influences his or her buying behaviour. Personality refers to the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment.

04. Psychological Factors that Influence Consumer Behaviour:-

It includes these Factors.  i) Motivation (ii) Perception (iii) Learning (iv) Beliefs and attitudes

(i) Motivation :- Motive (drive) a need that is sufficiently pressing to direct the person to seek satisfaction of the need

(ii) Perception :- The process by which people select, Organize, and interpret information to form a meaningful picture of the world.

(iii) Learning:- Changes in an individuals behaviour arising from experience.

(iv) Beliefs and attitudes :- Belief is a descriptive thought that a person holds about something. Attitude, a person’s consistently favourable or unfavourable evaluations, feelings, and tendencies towards an object or idea

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The Buyer Decision Process

The Buyer Decision Process Consists Of Five Stages.

  1. Need Recognition

  2. Information Search

  3. Evaluation Of Alternatives

  4. Purchase Decision

  5. Post Purchase Behaviour

01. Need Recognition :-

The first stage of the buyer decision process in which the consumer recognizes a problem a need.

e.g. The need can be triggered by internal stimuli when one of the person’s normal needs – hangers, thirst, Sex – rises to a level – high enough to become a drive. The need can be triggered by external stimuli.

02. Information Search :-

The stage of the buyer decision process in which the consumer is around to search for more information. The consumer may simply have heightened attention or may go into active information search. The consumer can obtain information from any of several sources. I.e. personal sources (family, friends, neighbours ) commercial sources (advertising sales peoples dealers, packaging, displays). Public sources (mass media etc.)

Experiential sources (handling, examining, using the product).

03. Evaluation of Alternatives:

The stage of the buyer decision process in which the consumer uses information to evaluate alternative bounds in the choice set.

04 Purchase Decision :-

The stage of buyer decision process in which the consumer actually buys the product.

Two factors can come between the purchase intention and the purchase decision. The first factor is attitudes of others.

The second factor is unexpected situational factor.

05. Post Purchase Behaviour :

The stage of the buyer decision process in which consumers take further action after purchase based on their satisfaction or dissatisfaction.

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The Buyer Decision Process for new products? Or New Product adoption process?

New Product :-

A good, services or idea that is perceived by some potential customers as new.

Adoption Process :-

The mental process through which an individual Passes from first hearing about an innovation to final adoption.

Consumer go through five stages in the process of adopting new product.

  1. Awareness

  2. Interest

  3. Evaluation

  4. Trial

  5. Adoption

01. Awareness :- The consumer becomes aware of the product but lacks information about it.

02. Interest :- The consumer seeks information about the new product.

03. Evaluation :- Consumer consider whether trying the new product makes sense.

04. Trail :- The consumer tries the new product on a small scale to improve his or her estimate of its value.

05. Adoption :- Consumer decides to makes full and regular use of the new product.

This model suggests that the new products marketer should think about how to help consumer move through these stages.

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Product Life – Cycle

Product Life – Cycle The course of a products sales and profits over its lifetime. It involves five distinct stages.

  1. Product Development

  2. Introduction

  3. Growth

  4. Maturity

  5. Decline

After launching the new product, management wants the product to enjoy a long and happy life. Although it does not expect the product to sell forever, the company wants to earn a decent profit to cover all effort and risk that went into launching it, Management is aware that each Product will have a life cycle, although the exact shape and length is not known in advance.

01. Product development :-

Begins when the company finds and develops a new product idea . During product development, sales are zero and the company’s investment costs mount.

02. Introduction Stage :-

The introduction stage starts when the new products in first launched. In which the new product is first distributed and made available for purchase.

In this stage as compared to other stages profits are negative or low because of the low sales and high distribution and promotion expenses. Much money is needed to attract distributors and built their inventors.

03. Growth Stage :-

The product life cycle stage in which a product’s sales start climbing quickly.

If the new product satisfied the market, it will enter a growth stage, in which sales will start climbing quickly. The early adopters will continue to buy and later buyers will start following their lead, especially if they hear favourable word of mouth

04. Maturity Stage :-

The stage in the product life cycle in which sales growth slows or levels off.

At some point, a products sales growth will slow down, and the product will enter a maturity stage. This maturity stage normally lasts longer them the previous stages, and it possess strong challenges to marketing management. Most products are in the maturity stage of the life cycle. And therefore, most of marketing management deals with the mature product.

05. Decline Stage :-

The product life cycle stage in which a product’s Sales decline the sales of most product forms and brands eventually dip. The decline may be slow, as in the case of oatmeal cereal. As in the case of phonographs records.

Sales may plunge to zero. Or they may drop to a low level where they continue for many years. This is the decline stage.

Not all product follow this product life cycle. Some products are introduced and die quickly, other stay in the mature stage for along, long time some enter the decline stage and are then cycled back into the growth through strong promotion or repositioning.

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