MARKETING MANAGEMENT · STUDY NOTES
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UNIT I · Simple English · Complete PDF study notes

Marketing Foundations & Consumer Behaviour

Understand what marketing means, what customers need and why people choose one product over another. Every section follows the supplied lecture material, with a clear meaning, useful examples and slide references.

Select a chapter above. Scroll down to read the notes in order.

What this chapter contains

Made for understanding the material from the beginning, not just memorising headings.

Lecture PDF pages88
Study sections32
Important concepts136
01 · Basics of Marketing Management

Marketing: meaning, purpose and scope

Marketing means understanding what people need and offering something useful to them. A business must decide what to sell, what price to charge, where to make it available and how to tell people about it. Advertising and selling are only two parts of marketing.

In one sentence

Marketing creates, communicates and delivers value to customers. Selling and advertising are only parts of this wider process. A business must understand customers, design an offer, set a price, distribute it, and communicate its benefit.

Meaning of marketing

UNDERSTAND THE IDEA

Marketing is the work of understanding what people need, creating an offer that meets those needs, and making that offer available. It includes decisions about the product, price, place and promotion. Selling is one activity within marketing, not the whole process.

IN REAL LIFE

A bakery asks commuters why they skip breakfast and discovers a demand for food that can be collected quickly. It changes the menu and opening time before buying advertisements.

Remember: It changes the menu and opening time before buying advertisements.

Marketing goals and customer satisfaction

UNDERSTAND THE IDEA

Marketing has two linked goals: attract new customers by offering value, and keep existing customers by delivering what was promised. Customer satisfaction happens when the experience meets or exceeds what the buyer reasonably expected.

IN REAL LIFE

A laundry service promises same-day pickup and checks the finished work before delivery. It aims to attract new customers while retaining existing ones.

Remember: It aims to attract new customers while retaining existing ones.

Marketing scope and the marketing mix

UNDERSTAND THE IDEA

The marketing mix is the set of decisions a company controls: Product, Price, Place and Promotion. These choices work together. A good product can still fail if the price is unsuitable or buyers cannot find it.

IN REAL LIFE

A café changes its menu, menu prices, nearby delivery partners and opening announcements together. The four linked choices shape the entire customer offer.

Remember: The four linked choices shape the entire customer offer.

Marketing as a social and managerial process

UNDERSTAND THE IDEA

Marketing involves people exchanging value to meet their needs. It is social because both sides interact and exchange something useful; it is managerial because businesses plan and organise how to create and deliver that value.

IN REAL LIFE

Local farmers organise a weekend market to exchange vegetables for money. Both customers and sellers satisfy needs through exchange.

Remember: Both customers and sellers satisfy needs through exchange.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • What is Marketing?
  • Marketing is the delivery of customer satisfaction at a profit.
  • The Goal of Marketing is: To attract new customer by promising superior
  • value, and to keep current customers by delivering satisfaction.
  • Marketing, more than any other business function, deals with customers.
  • Creating customer value and satisfaction are at the very heart of modern marketing
  • thinking and practice.
  • Some people believe that only large business organizations operating in highly
  • developed economies use marketing, but sound marketing is critical to the success
  • of every organization – whether large or small, for profit or non – profit, domestic or
  • Marketing Defined
  • Many people think of marketing only as selling and advertising.
  • Selling and advertising are only the tip of the marketing ice-berg.
  • Marketing is one of three key core functions that are central to all
  • organizations.
  • Marketers act as the customers’ voice within the firm and marketers are
  • responsible for many more decisions than just advertising or sales:
  • Analyze industries to identify emerging trends.
  • Determine which national and international markets to enter or exit.
  • Conduct research to understand consumer behavior.
  • Design integrated marketing mixes – products, prices, channels of
  • distribution, and promotion programs.
  • Marketing is a social and managerial process by which individuals and groups
  • obtain what they need and want through creating and exchanging products and
  • value with others.
02 · Basics of Marketing Management

Needs, wants and demands

A need is something basic you are missing, like food. A want is the particular thing you would like, such as pizza. A want becomes a demand when you have the money and willingness to buy it. This difference matters because people may want something they cannot afford.

In one sentence

A need is a basic felt deprivation; a want is the culturally shaped form of meeting that need; a demand exists when a want is supported by purchasing power. The distinction helps marketers avoid confusing what people desire with what they will actually buy.

Human needs

UNDERSTAND THE IDEA

A need is something people feel they lack, such as food, safety, belonging or knowledge. Marketing does not invent basic needs. Instead, businesses look for useful ways to satisfy those needs.

IN REAL LIFE

During a heatwave, a school needs safe drinking water. The need exists before any student chooses a brand of bottled water.

Remember: The need exists before any student chooses a brand of bottled water.

Consumer wants

UNDERSTAND THE IDEA

A want is the particular thing someone prefers to satisfy a need. Hunger is a need; wanting dosa rather than a sandwich is a want. Culture, experience and individual taste help shape wants.

IN REAL LIFE

A student prefers chilled coconut water over plain water after cricket practice. The choice reflects taste and surroundings rather than a different basic need.

Remember: The choice reflects taste and surroundings rather than a different basic need.

Purchasing-power-backed demands

UNDERSTAND THE IDEA

A want becomes demand when a person has both the desire and the ability to pay. Many people might want an expensive phone, but only those able and willing to purchase it create effective demand.

IN REAL LIFE

A student wants a premium laptop but waits until a scholarship covers the cost. Only then can the want translate into an actual purchase.

Remember: Only then can the want translate into an actual purchase.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • To explain marketing definition, we examine the
  • following important terms :
  • Needs, wants, and demands
  • Products and services
  • Value, satisfaction and quality
  • Exchange, transactions, and relationships
  • Needs, Wants, and Demands
  • The most basic concept underlying marketing is that of human needs.
  • Human needs are states of felt deprivation.
  • Human have many complex needs:
  • Physical needs for food, clothing, warmth, and safety
  • Social needs or belonging and affection
  • Individual needs for knowledge and self – expression
  • Want are the form taken by human needs as they are shaped by culture and
  • individual personality.
  • People have almost unlimited wants but limited resources.
  • They want to choose products that provide the most value and satisfaction for their
  • When backed by buying power, wants become demands.
  • Consumers view products as bundles of benefits and choose products that give them
  • the best bundle for their money.
03 · Basics of Marketing Management

Products, services and luxury offerings

A product is anything a business offers to meet a need. It can be a physical item, a service or even an experience. What kind of product it is depends on who is buying it and why they will use it.

In one sentence

A product is anything offered to satisfy a need or want, including goods, services and experiences. Consumer and industrial offerings differ mainly in who buys them and for what purpose. Luxury offerings are typically discretionary, premium-positioned and influenced by rising income.

Products and services

UNDERSTAND THE IDEA

A product is anything offered to satisfy a need or want, including goods, services and experiences. Consumer and industrial offerings differ mainly in who buys them and for what purpose. Luxury offerings are typically discretionary, premium-positioned and influenced by rising income. For products and services specifically, the important distinction is: one offering is a physical good while the other is primarily an activity.

IN REAL LIFE

A student purchases a notebook and then pays for a tutoring session. One offering is a physical good while the other is primarily an activity.

Remember: One offering is a physical good while the other is primarily an activity.

Consumer products

UNDERSTAND THE IDEA

A product is anything offered to satisfy a need or want, including goods, services and experiences. Consumer and industrial offerings differ mainly in who buys them and for what purpose. Luxury offerings are typically discretionary, premium-positioned and influenced by rising income. For consumer products specifically, the important distinction is: the final purpose of the purchase determines the category.

IN REAL LIFE

A family buys toothpaste for use at home rather than to resell. The final purpose of the purchase determines the category.

Remember: The final purpose of the purchase determines the category.

Industrial products

UNDERSTAND THE IDEA

A product is anything offered to satisfy a need or want, including goods, services and experiences. Consumer and industrial offerings differ mainly in who buys them and for what purpose. Luxury offerings are typically discretionary, premium-positioned and influenced by rising income. For industrial products specifically, the important distinction is: the asset supports business operations rather than household consumption.

IN REAL LIFE

A restaurant buys an industrial refrigerator for its kitchen. The asset supports business operations rather than household consumption.

Remember: The asset supports business operations rather than household consumption.

Luxury offerings and classifications

UNDERSTAND THE IDEA

A product is anything offered to satisfy a need or want, including goods, services and experiences. Consumer and industrial offerings differ mainly in who buys them and for what purpose. Luxury offerings are typically discretionary, premium-positioned and influenced by rising income. For luxury offerings and classifications specifically, the important distinction is: its marketing emphasises distinctive benefits instead of everyday convenience.

IN REAL LIFE

A boutique sells limited-edition watches to buyers seeking prestige and craftsmanship. Its marketing emphasises distinctive benefits instead of everyday convenience.

Remember: Its marketing emphasises distinctive benefits instead of everyday convenience.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Products and Services
  • Anything that can be offered to a market to satisfy a need or want.
  • The concept of product is not limited to physical objects – anything
  • capable of satisfying a need can be called a product.
  • In addition to tangible goods, products also include services, which
  • are activities or benefits offered for sale that are essentially intangible
  • and do not result in the ownership of anything.
  • Products and Services
  • Products and Services
  • Luxury goods are high-quality, non-essential products and services whose
  • demand increases significantly as consumer income rises. Rather than
  • fulfilling basic survival needs, they are purchased for their exceptional
  • craftsmanship, exclusivity, and ability to signal wealth and social status.
  • A premium product is an item positioned as having superior quality, higher
  • performance, or greater exclusivity than standard market alternatives. While
  • priced higher than basic goods, they remain generally accessible, aiming to
  • provide exceptional value through better materials, advanced features, or
  • brand identity.
  • A niche product is a specialised good or service designed to meet
  • the unique needs, preferences, or demographics of a specific,
  • narrow segment of a market. Rather than trying to appeal to the
  • general public, it caters to a highly defined audience
04 · Basics of Marketing Management

Customer value, satisfaction and quality

Customer value means what a person feels they get compared with what they give up. Satisfaction means how happy they are after using the product. Quality is about how well the product or service performs. These ideas are linked, but they are not the same.

In one sentence

Customer value compares benefits received with costs incurred. Satisfaction depends on how the actual performance compares with expectations. Quality influences both value and satisfaction: it is not simply an expensive finish, but fitness for the customer’s intended use.

Customer value

UNDERSTAND THE IDEA

Customer value compares benefits received with costs incurred. Satisfaction depends on how the actual performance compares with expectations. Quality influences both value and satisfaction: it is not simply an expensive finish, but fitness for the customer’s intended use. For customer value specifically, the important distinction is: a student weighs the extra benefits against the total cost.

IN REAL LIFE

Two tuition centres charge the same fees, but one includes personal feedback and flexible scheduling. A student weighs the extra benefits against the total cost.

Remember: A student weighs the extra benefits against the total cost.

Customer satisfaction

UNDERSTAND THE IDEA

Customer value compares benefits received with costs incurred. Satisfaction depends on how the actual performance compares with expectations. Quality influences both value and satisfaction: it is not simply an expensive finish, but fitness for the customer’s intended use. For customer satisfaction specifically, the important distinction is: the buyer compares what happened with the original expectation.

IN REAL LIFE

An online store promises delivery in two days and delivers on the second day without damage. The buyer compares what happened with the original expectation.

Remember: The buyer compares what happened with the original expectation.

Customer quality and expectations

UNDERSTAND THE IDEA

Customer value compares benefits received with costs incurred. Satisfaction depends on how the actual performance compares with expectations. Quality influences both value and satisfaction: it is not simply an expensive finish, but fitness for the customer’s intended use. For customer quality and expectations specifically, the important distinction is: a consistent standard supports the quality customers expect.

IN REAL LIFE

A hotel promises clean rooms, and staff check the bathroom and linen before each check-in. A consistent standard supports the quality customers expect.

Remember: A consistent standard supports the quality customers expect.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Values, Satisfaction, and Quality
  • Customer value is the difference between the values the customer gains from
  • owning and using a product and the costs of obtaining the products.
  • Customers often do not judge product value and costs accurately or
  • objectively. They act on perceived value.
  • Satisfaction:
  • Customer satisfaction depends on a product’s perceived performance in
  • delivering value relative to a buyer’s expectation.
  • If the product’s performance falls short of the customer’s expectations, the
  • buyer is dissatisfied.
  • Customer satisfaction is closely linked to quality.
  • Quality has a direct impact on product performance.
  • Quality can be defined as “freedom from defects”.
  • TQM programs designed to constantly improve the quality of products,
  • services, and marketing processes.
05 · Basics of Marketing Management

Exchange, transactions and relationships

An exchange happens when two sides give each other something valuable. A transaction is one completed exchange. A relationship grows when a business and its customers keep dealing with each other over time.

In one sentence

Exchange means obtaining something desired by offering something else. A transaction is a particular exchange with agreed terms. Relationship marketing extends attention beyond one sale to ongoing trust and repeat value.

Exchange

UNDERSTAND THE IDEA

Exchange means obtaining something desired by offering something else. A transaction is a particular exchange with agreed terms. Relationship marketing extends attention beyond one sale to ongoing trust and repeat value. For exchange specifically, the important distinction is: each side gives something of value to obtain a desired benefit.

IN REAL LIFE

A tailor repairs a jacket and the customer pays an agreed fee. Each side gives something of value to obtain a desired benefit.

Remember: Each side gives something of value to obtain a desired benefit.

Transactions

UNDERSTAND THE IDEA

Exchange means obtaining something desired by offering something else. A transaction is a particular exchange with agreed terms. Relationship marketing extends attention beyond one sale to ongoing trust and repeat value. For transactions specifically, the important distinction is: the completed exchange becomes a transaction.

IN REAL LIFE

A customer pays ₹80 and receives a sandwich at a food counter. The completed exchange becomes a transaction.

Remember: The completed exchange becomes a transaction.

Relationship marketing

UNDERSTAND THE IDEA

Exchange means obtaining something desired by offering something else. A transaction is a particular exchange with agreed terms. Relationship marketing extends attention beyond one sale to ongoing trust and repeat value. For relationship marketing specifically, the important distinction is: reliable service encourages continuing trust, not just a single purchase.

IN REAL LIFE

A pharmacy remembers repeat customers’ preferred refill schedules without sending unwanted messages. Reliable service encourages continuing trust, not just a single purchase.

Remember: Reliable service encourages continuing trust, not just a single purchase.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Exchange, Transactions, and Relationships
  • The act of obtaining a desired object from someone by
  • offering something in return
  • Transaction :
  • A trade between two parties that involves at least two things
  • of value, agreed – upon conditions a time of agreement, and
  • a place of agreement.
  • Relationship marketing :
  • The process of creating, maintaining, and enhancing strong,
  • value – laden relationships with customers and other
  • stakeholders
06 · Basics of Marketing Management

Markets and the simple marketing system

A market is the group of people who might buy a product and the sellers who serve them. Businesses give customers products and information. Customers give businesses money and feedback. That is the basic marketing system.

In one sentence

A market consists of actual and potential buyers; an industry refers to sellers. Marketing links both through offerings, information, payments and value. This relationship makes buyer demand and producer choices interdependent.

Markets

UNDERSTAND THE IDEA

A market consists of actual and potential buyers; an industry refers to sellers. Marketing links both through offerings, information, payments and value. This relationship makes buyer demand and producer choices interdependent. For markets specifically, the important distinction is: these buyers and sellers form a market for repair services.

IN REAL LIFE

A street of bike-repair shops attracts people who need repairs and are able to pay. These buyers and sellers form a market for repair services.

Remember: These buyers and sellers form a market for repair services.

The simple marketing system

UNDERSTAND THE IDEA

A market consists of actual and potential buyers; an industry refers to sellers. Marketing links both through offerings, information, payments and value. This relationship makes buyer demand and producer choices interdependent. For the simple marketing system specifically, the important distinction is: goods, payment and information move through the marketing system.

IN REAL LIFE

A manufacturer supplies shoes, retailers display them, and buyers provide money and feedback. Goods, payment and information move through the marketing system.

Remember: Goods, payment and information move through the marketing system.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • The set of all actual and potential buyers of a product or service
  • (a collection
  • collection of
  • Communication
  • Products / Services
  • A simple marketing system
07 · Basics of Marketing Management

Marketing processes and what can be marketed

Marketing begins before a product is made. A business studies customers, builds an offer, decides the price, makes it available and communicates its value. Goods, services, events, places, ideas and experiences can all be marketed.

In one sentence

Marketing is not confined to physical goods: organisations market services, events, experiences, people, places, properties, information, organisations and ideas. The marketer identifies an audience, a value proposition and channels to reach that audience.

Marketing process

UNDERSTAND THE IDEA

Marketing is not confined to physical goods: organisations market services, events, experiences, people, places, properties, information, organisations and ideas. The marketer identifies an audience, a value proposition and channels to reach that audience. For marketing process specifically, the important distinction is: the choices follow a connected process rather than isolated selling.

IN REAL LIFE

A juice stall studies commuters, designs drinks, prices the menu, selects its location and advertises opening hours. The choices follow a connected process rather than isolated selling.

Remember: The choices follow a connected process rather than isolated selling.

What can be marketed

UNDERSTAND THE IDEA

Marketing is not confined to physical goods: organisations market services, events, experiences, people, places, properties, information, organisations and ideas. The marketer identifies an audience, a value proposition and channels to reach that audience. For what can be marketed specifically, the important distinction is: marketing is not restricted to physical products.

IN REAL LIFE

A museum promotes an exhibition, a tourist board promotes a region and a company promotes a service. Marketing is not restricted to physical products.

Remember: Marketing is not restricted to physical products.

Marketing an organisation and its offerings

UNDERSTAND THE IDEA

Marketing is not confined to physical goods: organisations market services, events, experiences, people, places, properties, information, organisations and ideas. The marketer identifies an audience, a value proposition and channels to reach that audience. For marketing an organisation and its offerings specifically, the important distinction is: it uses marketing to communicate an organisational mission and a service, not just to sell goods.

IN REAL LIFE

A charity explains its literacy programme to parents and donors at an open day. It uses marketing to communicate an organisational mission and a service, not just to sell goods.

Remember: It uses marketing to communicate an organisational mission and a service, not just to sell goods.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • What is Marketing?
  • Marketing is an organizational function and a set of processes for
  • creating, communicating, and delivering value to customers and for
  • managing customer relationships in ways that benefit the organization
  • and its stakeholders.
  • What is Marketing Management?
  • Marketing management is the art and science of choosing target
  • markets and getting, keeping, and growing customers through
  • creating, delivering, and communicating superior customer value.
  • What is Marketed?
  • Events (Olympic-Sponsors)
  • Experiences (Theme park , Wonderla)
  • Persons (Amitabh)
  • Places (Kerala)
  • Properties (Real Estate)
  • Organizations- HP, Bosch, Strong image
  • Information –Books, schools,
  • Ideas –AIDS awareness ,
08 · Basics of Marketing Management

Marketing management philosophies

Businesses can follow different marketing approaches. Some focus on making products cheaply, some on product quality, and some on selling harder. The marketing approach starts with customer needs. Societal and holistic marketing also consider wider responsibilities.

In one sentence

The production, product, selling, marketing and societal marketing concepts emphasise different managerial priorities. Production stresses availability, product concept quality, selling concept sales pressure, marketing concept customer needs, and societal marketing long-term welfare alongside business results. Holistic marketing considers interconnected relationships and activities.

Production concept

UNDERSTAND THE IDEA

The production, product, selling, marketing and societal marketing concepts emphasise different managerial priorities. Production stresses availability, product concept quality, selling concept sales pressure, marketing concept customer needs, and societal marketing long-term welfare alongside business results. Holistic marketing considers interconnected relationships and activities. For production concept specifically, the important distinction is: its attention is on efficiency and availability.

IN REAL LIFE

A rice producer invests in efficient packaging so the staple can be supplied widely at a low unit cost. Its attention is on efficiency and availability.

Remember: Its attention is on efficiency and availability.

Product concept

UNDERSTAND THE IDEA

The production, product, selling, marketing and societal marketing concepts emphasise different managerial priorities. Production stresses availability, product concept quality, selling concept sales pressure, marketing concept customer needs, and societal marketing long-term welfare alongside business results. Holistic marketing considers interconnected relationships and activities. For product concept specifically, the important distinction is: its strategy assumes that superior features will attract buyers.

IN REAL LIFE

A headphone maker adds richer sound, better materials and improved battery life. Its strategy assumes that superior features will attract buyers.

Remember: Its strategy assumes that superior features will attract buyers.

Selling concept

UNDERSTAND THE IDEA

The production, product, selling, marketing and societal marketing concepts emphasise different managerial priorities. Production stresses availability, product concept quality, selling concept sales pressure, marketing concept customer needs, and societal marketing long-term welfare alongside business results. Holistic marketing considers interconnected relationships and activities. For selling concept specifically, the important distinction is: the focus is on selling existing inventory.

IN REAL LIFE

A store has excess umbrellas after the monsoon and instructs staff to push remaining stock through promotions. The focus is on selling existing inventory.

Remember: The focus is on selling existing inventory.

Marketing concept

UNDERSTAND THE IDEA

The production, product, selling, marketing and societal marketing concepts emphasise different managerial priorities. Production stresses availability, product concept quality, selling concept sales pressure, marketing concept customer needs, and societal marketing long-term welfare alongside business results. Holistic marketing considers interconnected relationships and activities. For marketing concept specifically, the important distinction is: it starts with customer needs rather than the factory's preferred output.

IN REAL LIFE

A healthy-snack business interviews office workers before developing its menu. It starts with customer needs rather than the factory's preferred output.

Remember: It starts with customer needs rather than the factory's preferred output.

Societal marketing concept

UNDERSTAND THE IDEA

The production, product, selling, marketing and societal marketing concepts emphasise different managerial priorities. Production stresses availability, product concept quality, selling concept sales pressure, marketing concept customer needs, and societal marketing long-term welfare alongside business results. Holistic marketing considers interconnected relationships and activities. For societal marketing concept specifically, the important distinction is: the decision considers customers, profits and the wider public interest.

IN REAL LIFE

A beverage company redesigns plastic packaging even though customers mainly ask for convenience. The decision considers customers, profits and the wider public interest.

Remember: The decision considers customers, profits and the wider public interest.

Holistic marketing concept

UNDERSTAND THE IDEA

The production, product, selling, marketing and societal marketing concepts emphasise different managerial priorities. Production stresses availability, product concept quality, selling concept sales pressure, marketing concept customer needs, and societal marketing long-term welfare alongside business results. Holistic marketing considers interconnected relationships and activities. For holistic marketing concept specifically, the important distinction is: its marketing activities function as one coordinated system.

IN REAL LIFE

A chain aligns supplier relationships, staff training, customer service and promotion around the same promise. Its marketing activities function as one coordinated system.

Remember: Its marketing activities function as one coordinated system.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • MARKETING MANAGEMENT PHILOSOPHIES
  • The role that marketing plays within a company varies according to the
  • overall strategy and philosophy of each firm.
  • There are five alternative concepts under which organizations conduct
  • their marketing activities:
  • Production concept
  • Product concept
  • Selling concept
  • Marketing concept
  • Societal marketing concepts
  • The Holistic Marketing Concept
09 · Basics of Marketing Management

Trends and changes in marketing

Marketing changes when technology, competition and customer habits change. Online shopping and easier access to information give people more ways to compare brands. Businesses must understand these changes rather than use the same methods forever.

In one sentence

Newer marketing emphasises the customer across departments, segmented offerings, data, networks, outsourced capabilities and changing competitive conditions. These trends affect how firms organise decisions, not merely what advertisements they create.

Marketing in the new economy

UNDERSTAND THE IDEA

Newer marketing emphasises the customer across departments, segmented offerings, data, networks, outsourced capabilities and changing competitive conditions. These trends affect how firms organise decisions, not merely what advertisements they create. For marketing in the new economy specifically, the important distinction is: customers expect immediate information and easier buying.

IN REAL LIFE

A family-run retailer lists real-time stock online and accepts digital orders. Customers expect immediate information and easier buying.

Remember: Customers expect immediate information and easier buying.

Changing markets and competition

UNDERSTAND THE IDEA

Newer marketing emphasises the customer across departments, segmented offerings, data, networks, outsourced capabilities and changing competitive conditions. These trends affect how firms organise decisions, not merely what advertisements they create. For changing markets and competition specifically, the important distinction is: it revisits how customers now want to shop.

IN REAL LIFE

A local supermarket learns that mobile delivery apps are taking some of its routine orders. It revisits how customers now want to shop.

Remember: It revisits how customers now want to shop.

Company and marketer responses

UNDERSTAND THE IDEA

Newer marketing emphasises the customer across departments, segmented offerings, data, networks, outsourced capabilities and changing competitive conditions. These trends affect how firms organise decisions, not merely what advertisements they create. For company and marketer responses specifically, the important distinction is: the business adjusts its offer and customer communication.

IN REAL LIFE

A restaurant shifts to online ordering as consumer preferences change. The business adjusts its offer and customer communication.

Remember: The business adjusts its offer and customer communication.

Emerging markets

UNDERSTAND THE IDEA

Newer marketing emphasises the customer across departments, segmented offerings, data, networks, outsourced capabilities and changing competitive conditions. These trends affect how firms organise decisions, not merely what advertisements they create. For emerging markets specifically, the important distinction is: it considers local buying power and distribution access.

IN REAL LIFE

A consumer brand tests smaller affordable packs in an under-served district. It considers local buying power and distribution access.

Remember: It considers local buying power and distribution access.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Trends in marketing
  • Everyone in the organization does marketing
  • Organizing by customer segments
  • Identifying new segments
  • Emphasis on intangible assets
  • Building brands through performance and integrated communications
  • Online marketing
  • Selling to well defined markets
  • Focusing on customer lifetime value
  • Building customer share
  • Glocal strategies
  • Focus on stakeholders
10 · Basics of Marketing Management

Marketing management tasks

Marketing managers study opportunities, choose customers to serve and plan the product, price, distribution and promotion. They also build relationships, measure results and make changes when something is not working.

In one sentence

Marketing management includes understanding markets, generating insights, designing offers, delivering value, building brands, communicating, building relationships and sustaining growth. See the slide for the lecturer’s precise checklist.

Marketing management activities

UNDERSTAND THE IDEA

Marketing management includes understanding markets, generating insights, designing offers, delivering value, building brands, communicating, building relationships and sustaining growth. See the slide for the lecturer’s precise checklist. For marketing management activities specifically, the important distinction is: managing marketing means analysing and coordinating several decisions.

IN REAL LIFE

A hotel manager reviews occupancy, promotions, online reviews and room rates every week. Managing marketing means analysing and coordinating several decisions.

Remember: Managing marketing means analysing and coordinating several decisions.

Marketing in the hotel industry

UNDERSTAND THE IDEA

Marketing management includes understanding markets, generating insights, designing offers, delivering value, building brands, communicating, building relationships and sustaining growth. See the slide for the lecturer’s precise checklist. For marketing in the hotel industry specifically, the important distinction is: it designs packages, prices and service information around their different purposes.

IN REAL LIFE

A hotel identifies guests who book for work and those who book for holidays. It designs packages, prices and service information around their different purposes.

Remember: It designs packages, prices and service information around their different purposes.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Marketing Management Tasks
  • Developing Marketing Strategies and tasks(micro & macro)
  • Capturing Marketing Insights
  • Connecting with Customers
  • Building Strong Brands
  • Shaping the market offerings
  • Delivering value
  • Communicating Value
  • Creating successful Long-term growth

Consumer markets and the buyer-behaviour model

Consumer behaviour means understanding how people decide what to buy. We look at what influences them, what happens in their minds before buying and what they do afterwards. Businesses use this knowledge to serve customers better.

In one sentence

Consumer markets comprise individuals and households buying for personal consumption. In the buyer model, marketing and environmental stimuli enter the buyer’s black box; individual characteristics and decision processes then produce purchase responses. The model explains why identical advertising can create different reactions.

Buyer behaviour model: environment → buyer’s black box → responses
Original lecture diagram · PDF page 4. Buyer behaviour model: environment → buyer’s black box → responses · Open page

Consumer markets

UNDERSTAND THE IDEA

A consumer market consists of people and households buying goods or services for their own use. A family buying groceries belongs to the consumer market, whereas a restaurant purchasing ingredients for its business does not.

IN REAL LIFE

A couple buys a washing machine for their household. The purchase serves personal use rather than a firm's operations.

Remember: The purchase serves personal use rather than a firm's operations.

Consumer buying behaviour

UNDERSTAND THE IDEA

Consumer buying behaviour is how individuals and households decide what to buy, why they buy it, how often they buy it and how they respond after buying it. Both personal characteristics and the outside environment affect these choices.

IN REAL LIFE

Two shoppers choose different shoes because one values durability and the other values style. The same store and prices can produce different decisions.

Remember: The same store and prices can produce different decisions.

Stimulus-response buyer behaviour model

UNDERSTAND THE IDEA

Consumer markets comprise individuals and households buying for personal consumption. In the buyer model, marketing and environmental stimuli enter the buyer’s black box; individual characteristics and decision processes then produce purchase responses. The model explains why identical advertising can create different reactions. For stimulus-response buyer behaviour model specifically, the important distinction is: marketing stimuli pass through the buyer's personal decision process.

IN REAL LIFE

A customer sees a price cut for a phone but still chooses a competitor because of family advice. Marketing stimuli pass through the buyer's personal decision process.

Remember: Marketing stimuli pass through the buyer's personal decision process.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Consumer Markets and Buyer Behavior
  • Consumer buyer behavior is the buying behavior of final
  • consumers—individuals and households that buy goods and
  • services for personal consumption.
  • Consumer markets are made up of all the individuals and
  • households that buy or acquire goods and services for
  • personal consumption.
  • Model of Consumer Behavior
  • The Model of Buyer Behavior
  • Characteristics Affecting Consumer Behavior
  • Factors Influencing Consumer Behavior

Cultural and social influences

People do not make buying decisions alone. Culture, family, friends and social groups shape what they like and trust. For example, someone may try a restaurant because their friends recommend it.

In one sentence

Culture, subculture and social class shape learned preferences. Reference groups, family, opinions, online networks, roles and status influence which products feel suitable or desirable. Social influence can alter evaluation before a person makes the purchase.

Four families of factors affecting consumer behaviour
Original lecture diagram · PDF page 5. Four families of factors affecting consumer behaviour · Open page

Cultural factors

UNDERSTAND THE IDEA

Culture, subculture and social class shape learned preferences. Reference groups, family, opinions, online networks, roles and status influence which products feel suitable or desirable. Social influence can alter evaluation before a person makes the purchase. For cultural factors specifically, the important distinction is: cultural practices shape what customers find suitable.

IN REAL LIFE

A grocery chain adjusts festive gift packs for local customs during a major festival. Cultural practices shape what customers find suitable.

Remember: Cultural practices shape what customers find suitable.

Subcultures

UNDERSTAND THE IDEA

Culture, subculture and social class shape learned preferences. Reference groups, family, opinions, online networks, roles and status influence which products feel suitable or desirable. Social influence can alter evaluation before a person makes the purchase. For subcultures specifically, the important distinction is: people inside a larger culture can share distinct preferences.

IN REAL LIFE

A clothing retailer stocks region-specific traditional outfits in selected branches. People inside a larger culture can share distinct preferences.

Remember: People inside a larger culture can share distinct preferences.

Social class

UNDERSTAND THE IDEA

Culture, subculture and social class shape learned preferences. Reference groups, family, opinions, online networks, roles and status influence which products feel suitable or desirable. Social influence can alter evaluation before a person makes the purchase. For social class specifically, the important distinction is: spending and preferences vary with more than income alone.

IN REAL LIFE

A furniture showroom offers several quality and price ranges to shoppers from different economic backgrounds. Spending and preferences vary with more than income alone.

Remember: Spending and preferences vary with more than income alone.

Reference groups

UNDERSTAND THE IDEA

Culture, subculture and social class shape learned preferences. Reference groups, family, opinions, online networks, roles and status influence which products feel suitable or desirable. Social influence can alter evaluation before a person makes the purchase. For reference groups specifically, the important distinction is: a group influences the buyer's evaluation.

IN REAL LIFE

A school student chooses running shoes after seeing the sports team's preferred brand. A group influences the buyer's evaluation.

Remember: A group influences the buyer's evaluation.

Opinion leaders

UNDERSTAND THE IDEA

Culture, subculture and social class shape learned preferences. Reference groups, family, opinions, online networks, roles and status influence which products feel suitable or desirable. Social influence can alter evaluation before a person makes the purchase. For opinion leaders specifically, the important distinction is: the coach's specialist opinion affects purchase consideration.

IN REAL LIFE

A respected cycling coach recommends a safer helmet model to younger riders. The coach's specialist opinion affects purchase consideration.

Remember: The coach's specialist opinion affects purchase consideration.

Influencer marketing

UNDERSTAND THE IDEA

Culture, subculture and social class shape learned preferences. Reference groups, family, opinions, online networks, roles and status influence which products feel suitable or desirable. Social influence can alter evaluation before a person makes the purchase. For influencer marketing specifically, the important distinction is: followers hear a message through a person they already follow.

IN REAL LIFE

A small skincare brand hires a creator whose audience values simple routines. Followers hear a message through a person they already follow.

Remember: Followers hear a message through a person they already follow.

Family and social roles

UNDERSTAND THE IDEA

Culture, subculture and social class shape learned preferences. Reference groups, family, opinions, online networks, roles and status influence which products feel suitable or desirable. Social influence can alter evaluation before a person makes the purchase. For family and social roles specifically, the important distinction is: different family members influence the decision in different ways.

IN REAL LIFE

Parents and children discuss which refrigerator size will suit their home. Different family members influence the decision in different ways.

Remember: Different family members influence the decision in different ways.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Characteristics Affecting Consumer Behavior
  • Cultural Factors
  • Culture is the set of basic values, perceptions, wants, and behaviors
  • learned by a member of society from family and other important
  • institutions.
  • Subcultures are groups of people within a culture with shared value
  • systems based on common life experiences and situations.
  • Social classes are society’s relatively permanent and ordered divisions
  • whose members share similar values, interests, and behaviours.
  • Measured as a combination of occupation, income, education, wealth,
  • and other variables
  • Characteristics Affecting Consumer Behavior
  • Groups and Social Networks
  • Reference groups
  • Opinion leaders
  • Word-of-mouth influence
  • Influencer marketing
  • Online social networks
  • Influencer marketing: CoverGirl’s
  • “I Am What I Make Up” campaign
  • uses a diverse team of influential
  • brand ambassadors who explain
  • authentically in their own words
  • what the slogan means to them.
  • Characteristics Affecting Consumer Behavior
  • Social Factors
  • Family is the most important
  • consumer-buying organization
  • Role and status can be
  • defined by a person’s position

Personal influences: age, lifestyle and personality

Personal factors are things about the buyer, such as age, income, lifestyle, job and personality. Two people may see the same product but choose differently because their everyday lives are different.

In one sentence

Occupation, life stage, economic situation, lifestyle, personality and self-concept shape buying decisions. Lifestyle describes activities, interests and opinions, so people with similar incomes may still buy very differently.

Age and life-cycle

UNDERSTAND THE IDEA

Occupation, life stage, economic situation, lifestyle, personality and self-concept shape buying decisions. Lifestyle describes activities, interests and opinions, so people with similar incomes may still buy very differently. For age and life-cycle specifically, the important distinction is: different life stages create different buying needs.

IN REAL LIFE

A retailer promotes small study desks to college students and larger dining tables to new families. Different life stages create different buying needs.

Remember: Different life stages create different buying needs.

Occupation and economic situation

UNDERSTAND THE IDEA

Occupation, life stage, economic situation, lifestyle, personality and self-concept shape buying decisions. Lifestyle describes activities, interests and opinions, so people with similar incomes may still buy very differently. For occupation and economic situation specifically, the important distinction is: occupation and disposable income influence the purchase.

IN REAL LIFE

A freelance photographer spends more on a camera than a casual holiday traveller. Occupation and disposable income influence the purchase.

Remember: Occupation and disposable income influence the purchase.

Lifestyle

UNDERSTAND THE IDEA

Occupation, life stage, economic situation, lifestyle, personality and self-concept shape buying decisions. Lifestyle describes activities, interests and opinions, so people with similar incomes may still buy very differently. For lifestyle specifically, the important distinction is: their daily routines and preferences lead to different choices.

IN REAL LIFE

Two customers with similar incomes choose a bicycle and a motorbike for commuting. Their daily routines and preferences lead to different choices.

Remember: Their daily routines and preferences lead to different choices.

Personality and self-concept

UNDERSTAND THE IDEA

Occupation, life stage, economic situation, lifestyle, personality and self-concept shape buying decisions. Lifestyle describes activities, interests and opinions, so people with similar incomes may still buy very differently. For personality and self-concept specifically, the important distinction is: the product feels consistent with how the customer sees themselves.

IN REAL LIFE

A customer who values minimalism chooses a plain watch over a flashy one. The product feels consistent with how the customer sees themselves.

Remember: The product feels consistent with how the customer sees themselves.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Characteristics Affecting Consumer Behavior
  • Personal Factors
  • Occupation affects the goods and
  • services bought by consumers.
  • Age and Life Stage affect tastes in
  • food, clothes, furniture, ad
  • Economic situations include
  • trends in spending, personal
  • income, savings, interest rates.
  • Appealing to occupation segments:
  • CAT makes rugged, durable phones
  • for the construction and heavy
  • Characteristics Affecting Consumer Behavior
  • Personal Factors
  • Lifestyle is a person’s
  • pattern of living as
  • expressed in his or her
  • psychographics.
  • Personality refers to the
  • unique psychological
  • characteristics that
  • distinguish a person or
  • Brand personality: MINI markets to personality
  • segments of people who are “adventurous,
  • individualistic, open-minded, creative, tech-savvy,
  • and young at heart”— anything but normal—just
  • like the car.

Psychological influences and Maslow’s hierarchy

People buy for different reasons. Motivation is the reason a person wants something. Perception is how they understand what they see. Learning comes from experience. Beliefs and attitudes shape what they think about a brand. Maslow arranges human needs from basic survival to personal growth.

In one sentence

Motivation energises behaviour; perception filters how information is interpreted; learning changes future behaviour; and beliefs and attitudes guide evaluations. Maslow arranges needs from physiological and safety through belonging, esteem and self-actualisation. These categories help explain motives, not predict every purchase mechanically.

Motivation

UNDERSTAND THE IDEA

Motivation energises behaviour; perception filters how information is interpreted; learning changes future behaviour; and beliefs and attitudes guide evaluations. Maslow arranges needs from physiological and safety through belonging, esteem and self-actualisation. These categories help explain motives, not predict every purchase mechanically. For motivation specifically, the important distinction is: an unsatisfied need provides the motive for action.

IN REAL LIFE

A student shops for a comfortable chair because back pain interrupts study. An unsatisfied need provides the motive for action.

Remember: An unsatisfied need provides the motive for action.

Maslow hierarchy of needs

UNDERSTAND THE IDEA

Motivation energises behaviour; perception filters how information is interpreted; learning changes future behaviour; and beliefs and attitudes guide evaluations. Maslow arranges needs from physiological and safety through belonging, esteem and self-actualisation. These categories help explain motives, not predict every purchase mechanically. For maslow hierarchy of needs specifically, the important distinction is: different needs can become more urgent in different circumstances.

IN REAL LIFE

A student prioritises meals and safe housing before paying for an expensive club membership. Different needs can become more urgent in different circumstances.

Remember: Different needs can become more urgent in different circumstances.

Perception

UNDERSTAND THE IDEA

Motivation energises behaviour; perception filters how information is interpreted; learning changes future behaviour; and beliefs and attitudes guide evaluations. Maslow arranges needs from physiological and safety through belonging, esteem and self-actualisation. These categories help explain motives, not predict every purchase mechanically. For perception specifically, the important distinction is: people interpret a message differently.

IN REAL LIFE

Two customers read the same advertisement, but only one thinks the design signals reliability. People interpret a message differently.

Remember: People interpret a message differently.

Learning

UNDERSTAND THE IDEA

Motivation energises behaviour; perception filters how information is interpreted; learning changes future behaviour; and beliefs and attitudes guide evaluations. Maslow arranges needs from physiological and safety through belonging, esteem and self-actualisation. These categories help explain motives, not predict every purchase mechanically. For learning specifically, the important distinction is: past experience changes future behaviour.

IN REAL LIFE

After repeated satisfactory grocery deliveries, a customer begins ordering from the same app automatically. Past experience changes future behaviour.

Remember: Past experience changes future behaviour.

Beliefs and attitudes

UNDERSTAND THE IDEA

Motivation energises behaviour; perception filters how information is interpreted; learning changes future behaviour; and beliefs and attitudes guide evaluations. Maslow arranges needs from physiological and safety through belonging, esteem and self-actualisation. These categories help explain motives, not predict every purchase mechanically. For beliefs and attitudes specifically, the important distinction is: these judgments influence later choices.

IN REAL LIFE

A shopper believes one brand is durable and has a favourable attitude toward it. These judgments influence later choices.

Remember: These judgments influence later choices.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Characteristics Affecting Consumer Behavior
  • Psychological Factors
  • Beliefs and attitudes
  • Characteristics Affecting Consumer Behavior
  • Psychological Factors
  • A motive (or drive) is a need that is sufficiently pressing to
  • direct the person to seek satisfaction of the need.
  • Motivation research refers to qualitative research designed
  • to probe consumers’ hidden, subconscious motivations.
  • Characteristics Affecting Consumer Behavior
  • Maslow’s Hierarchy of Needs
  • Characteristics Affecting Consumer Behavior
  • Psychological Factors
  • Perception is the process by which people select, organize,
  • and interpret information to form a meaningful picture of the
  • Perceptual Processes
  • Selective attention is the tendency for people to screen out most of the
  • information to which they are exposed.
  • Selective distortion is the tendency for people to interpret information in
  • a way that will support what they already believe.
  • Selective retention is the tendency to remember good points made about
  • a brand they favor and forget good points made about competing brands.
  • Characteristics Affecting Consumer Behavior
  • Psychological Factors
  • Learning is the change in an individual’s behavior arising from
  • experience and occurs through the interplay of:
  • Drives, Stimuli, Cues, Responses, Reinforcement
  • A belief is a descriptive thought that a person has about
  • something based on:
  • An attitude describes a person’s relatively consistent
  • evaluations, feelings, and tendencies toward an object or

Five roles in a buying decision

The person who pays is not always the person who decides. In one purchase, someone may suggest the idea, someone may influence the choice, someone may decide, someone may pay and someone may use the product.

In one sentence

The initiator suggests the purchase, the influencer affects opinions, the decider chooses, the buyer pays or purchases, and the user consumes or uses the offering. These roles can belong to one person or several people.

Initiator

UNDERSTAND THE IDEA

The initiator suggests the purchase, the influencer affects opinions, the decider chooses, the buyer pays or purchases, and the user consumes or uses the offering. These roles can belong to one person or several people. For initiator specifically, the important distinction is: someone starts the idea before others influence the final purchase.

IN REAL LIFE

A child first suggests that the family replace its old bicycle. Someone starts the idea before others influence the final purchase.

Remember: Someone starts the idea before others influence the final purchase.

Influencer

UNDERSTAND THE IDEA

The initiator suggests the purchase, the influencer affects opinions, the decider chooses, the buyer pays or purchases, and the user consumes or uses the offering. These roles can belong to one person or several people. For influencer specifically, the important distinction is: that advice changes the buying discussion.

IN REAL LIFE

A friend knowledgeable about laptops recommends better battery life. That advice changes the buying discussion.

Remember: That advice changes the buying discussion.

Decider

UNDERSTAND THE IDEA

The initiator suggests the purchase, the influencer affects opinions, the decider chooses, the buyer pays or purchases, and the user consumes or uses the offering. These roles can belong to one person or several people. For decider specifically, the important distinction is: the decider makes the final choice even when others help.

IN REAL LIFE

A parent chooses which washing machine the household will purchase. The decider makes the final choice even when others help.

Remember: The decider makes the final choice even when others help.

Buyer

UNDERSTAND THE IDEA

The initiator suggests the purchase, the influencer affects opinions, the decider chooses, the buyer pays or purchases, and the user consumes or uses the offering. These roles can belong to one person or several people. For buyer specifically, the important distinction is: making the transaction is distinct from deciding or using it.

IN REAL LIFE

One family member goes online and pays for the chosen refrigerator. Making the transaction is distinct from deciding or using it.

Remember: Making the transaction is distinct from deciding or using it.

User

UNDERSTAND THE IDEA

The initiator suggests the purchase, the influencer affects opinions, the decider chooses, the buyer pays or purchases, and the user consumes or uses the offering. These roles can belong to one person or several people. For user specifically, the important distinction is: the person using the product may not be its buyer.

IN REAL LIFE

A parent buys a schoolbag that a child uses every day. The person using the product may not be its buyer.

Remember: The person using the product may not be its buyer.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • The Buying Decision Process
  • The marketer should understand the buying behavior and
  • Identify who makes the buying decision
  • Types of buying decisions and
  • The steps in the buying process
  • Buying Roles – Five roles people might play in a buying decision
  • ►Initiator – A person who first suggests the idea of buying the particular product
  • ►Influencer – A person whose view or advice influences the decision.
  • ►Decider – A person who decides on any component of a buying decision:
  • whether to buy, what to buy, how to buy, or where to buy.
  • ►Buyer – The person who makes the actual purchase.
  • ►User – A person who consumes or uses the product or service

Four types of buying behaviour

Not every purchase needs the same amount of thought. Choosing a snack can be quick. Choosing an expensive laptop can take days. Buyer behaviour depends on how important the purchase feels and how different the brands seem.

In one sentence

The buying-behaviour matrix combines degree of involvement with differences among brands. High involvement with significant brand differences creates complex behaviour; high involvement with few differences produces dissonance-reducing behaviour. Low involvement creates habitual or variety-seeking behaviour depending on brand differences.

Complex buying behaviour

UNDERSTAND THE IDEA

The buying-behaviour matrix combines degree of involvement with differences among brands. High involvement with significant brand differences creates complex behaviour; high involvement with few differences produces dissonance-reducing behaviour. Low involvement creates habitual or variety-seeking behaviour depending on brand differences. For complex buying behaviour specifically, the important distinction is: high involvement and meaningful brand differences encourage careful evaluation.

IN REAL LIFE

A family compares expensive cars on safety, finance, reliability and maintenance before purchasing. High involvement and meaningful brand differences encourage careful evaluation.

Remember: High involvement and meaningful brand differences encourage careful evaluation.

Dissonance-reducing buying behaviour

UNDERSTAND THE IDEA

The buying-behaviour matrix combines degree of involvement with differences among brands. High involvement with significant brand differences creates complex behaviour; high involvement with few differences produces dissonance-reducing behaviour. Low involvement creates habitual or variety-seeking behaviour depending on brand differences. For dissonance-reducing buying behaviour specifically, the important distinction is: the purchase is important, but brand differences seem limited.

IN REAL LIFE

A couple buys a costly mattress after finding similar offers and later wonders if another shop was better. The purchase is important, but brand differences seem limited.

Remember: The purchase is important, but brand differences seem limited.

Habitual buying behaviour

UNDERSTAND THE IDEA

The buying-behaviour matrix combines degree of involvement with differences among brands. High involvement with significant brand differences creates complex behaviour; high involvement with few differences produces dissonance-reducing behaviour. Low involvement creates habitual or variety-seeking behaviour depending on brand differences. For habitual buying behaviour specifically, the important distinction is: low involvement and few perceived brand differences make the choice routine.

IN REAL LIFE

A customer takes the usual packet of salt from the supermarket shelf without comparing labels. Low involvement and few perceived brand differences make the choice routine.

Remember: Low involvement and few perceived brand differences make the choice routine.

Variety-seeking buying behaviour

UNDERSTAND THE IDEA

The buying-behaviour matrix combines degree of involvement with differences among brands. High involvement with significant brand differences creates complex behaviour; high involvement with few differences produces dissonance-reducing behaviour. Low involvement creates habitual or variety-seeking behaviour depending on brand differences. For variety-seeking buying behaviour specifically, the important distinction is: switching reflects a desire for variety rather than dissatisfaction.

IN REAL LIFE

A shopper changes snack flavours each week even though the previous snack was fine. Switching reflects a desire for variety rather than dissatisfaction.

Remember: Switching reflects a desire for variety rather than dissatisfaction.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Types of Buying Decision Behavior
  • Complex buying behavior
  • Dissonance-reducing buying behavior
  • Habitual buying behavior
  • Variety-seeking buying behavior
  • Types of Buying Decision Behavior
  • Four Types of Buying Behavior
  • Source: Adapted from Henry Assael, Consumer Behavior and Marketing Action
  • (Boston: Kent Publishing Company, 1987), p. 87. Used with permission of the author.

Five-stage buyer decision process

Buying usually begins when someone notices a need. They may search for information, compare choices, decide what to buy and judge the purchase afterwards. The five stages help marketers understand the whole decision.

In one sentence

The stages are need recognition, information search, evaluation of alternatives, purchase decision and post-purchase behaviour. External events, perceived risk and others’ attitudes can affect the journey. After purchase, satisfaction influences reviews, loyalty and future decisions.

INTERACTIVE EXPLANATIONFollow the decision

The five-stage buying process

NeedSearchCompareBuyAfterwards

The person notices a problem or need that may require a purchase.

Need recognition

UNDERSTAND THE IDEA

The stages are need recognition, information search, evaluation of alternatives, purchase decision and post-purchase behaviour. External events, perceived risk and others’ attitudes can affect the journey. After purchase, satisfaction influences reviews, loyalty and future decisions. For need recognition specifically, the important distinction is: recognising the problem starts the buying process.

IN REAL LIFE

A student notices that a broken backpack cannot carry textbooks safely. Recognising the problem starts the buying process.

Remember: Recognising the problem starts the buying process.

Information search

UNDERSTAND THE IDEA

The stages are need recognition, information search, evaluation of alternatives, purchase decision and post-purchase behaviour. External events, perceived risk and others’ attitudes can affect the journey. After purchase, satisfaction influences reviews, loyalty and future decisions. For information search specifically, the important distinction is: the buyer gathers options and useful information.

IN REAL LIFE

Before buying a laptop, a student reads independent reviews and checks official product specifications. The buyer gathers options and useful information.

Remember: The buyer gathers options and useful information.

Alternative evaluation

UNDERSTAND THE IDEA

The stages are need recognition, information search, evaluation of alternatives, purchase decision and post-purchase behaviour. External events, perceived risk and others’ attitudes can affect the journey. After purchase, satisfaction influences reviews, loyalty and future decisions. For alternative evaluation specifically, the important distinction is: the available alternatives are assessed before selection.

IN REAL LIFE

A buyer lists phone models and compares battery life, warranty and price. The available alternatives are assessed before selection.

Remember: The available alternatives are assessed before selection.

Purchase decision

UNDERSTAND THE IDEA

The stages are need recognition, information search, evaluation of alternatives, purchase decision and post-purchase behaviour. External events, perceived risk and others’ attitudes can affect the journey. After purchase, satisfaction influences reviews, loyalty and future decisions. For purchase decision specifically, the important distinction is: preference becomes a purchasing action.

IN REAL LIFE

After comparing models, a customer orders the selected phone using a trusted seller. Preference becomes a purchasing action.

Remember: Preference becomes a purchasing action.

Postpurchase behaviour

UNDERSTAND THE IDEA

The stages are need recognition, information search, evaluation of alternatives, purchase decision and post-purchase behaviour. External events, perceived risk and others’ attitudes can affect the journey. After purchase, satisfaction influences reviews, loyalty and future decisions. For postpurchase behaviour specifically, the important distinction is: experiences after purchase influence satisfaction and future actions.

IN REAL LIFE

A customer tests a newly purchased laptop and contacts support about a faulty charger. Experiences after purchase influence satisfaction and future actions.

Remember: Experiences after purchase influence satisfaction and future actions.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • The Buyer Decision Process
  • The Buyer Decision Process
  • 1.Need Recognition
  • Need recognition is the first stage of the buyer decision process, in which
  • the consumer recognizes a problem or need triggered by:
  • Internal stimuli
  • External stimuli
  • 2. Information Search
  • Information search is the stage of the buyer decision process in which the
  • consumer is motivated to search for more information.
  • Sources of information:
  • Personal sources
  • Commercial sources
  • Public sources
  • Experiential sources
  • The Buyer Decision Process
  • 3. Evaluation of Alternatives
  • Alternative evaluation is the stage of the buyer decision process in
  • which the consumer uses information to evaluate alternative brands in
  • the choice set
  • 4. Purchase Decision
  • Purchase decision is the buyer’s decision about which brand to
  • 5. Post purchase Behaviour
  • Post purchase behaviour is the stage of the buyer decision process in
  • which consumers take further action after purchase, based on their
  • satisfaction or dissatisfaction.
18 · Consumer Behaviour

The customer journey

The customer journey is everything a person experiences while dealing with a business. It can begin before buying and continue after the sale. Looking at each step helps the business notice what is easy, what is confusing and what needs to improve.

In one sentence

A customer journey describes experiences with a brand before, during and after a purchase. Marketing is therefore more than a single transaction: touchpoints such as search, service, delivery and support collectively shape perception.

Customer journey stages

UNDERSTAND THE IDEA

A customer journey describes experiences with a brand before, during and after a purchase. Marketing is therefore more than a single transaction: touchpoints such as search, service, delivery and support collectively shape perception. For customer journey stages specifically, the important distinction is: the customer's relationship spans several steps, not only payment.

IN REAL LIFE

A visitor discovers a restaurant through a map, checks its menu, visits and later reviews the meal. The customer's relationship spans several steps, not only payment.

Remember: The customer's relationship spans several steps, not only payment.

Touchpoints and customer experience

UNDERSTAND THE IDEA

A customer journey describes experiences with a brand before, during and after a purchase. Marketing is therefore more than a single transaction: touchpoints such as search, service, delivery and support collectively shape perception. For touchpoints and customer experience specifically, the important distinction is: each contact influences the overall guest experience.

IN REAL LIFE

A hotel improves booking emails, front-desk greeting and checkout reminders. Each contact influences the overall guest experience.

Remember: Each contact influences the overall guest experience.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • The Customer Journey
  • Customer journey: the sum of the ongoing experiences consumers
  • have with a brand that affect their buying behavior, engagement, and
  • brand advocacy over time.
  • By understanding the customer journey, marketers can work to create
  • brand experiences that will result in positive purchase behavior,
  • engagement, and brand advocacy over time.

Adoption of innovations and adopter categories

When a new product appears, not everyone tries it at the same time. Some people are first to experiment, others wait for proof, and some change only when the product becomes common. The adoption process explains how people move from hearing about a product to using it.

In one sentence

The adoption process moves through awareness, interest, evaluation, trial and adoption. Consumers differ in their willingness to adopt new products. The slide’s adopter curve identifies innovators, early adopters, early mainstream, late mainstream and lagging adopters with the familiar diffusion proportions.

Product adoption process

UNDERSTAND THE IDEA

The adoption process moves through awareness, interest, evaluation, trial and adoption. Consumers differ in their willingness to adopt new products. The slide’s adopter curve identifies innovators, early adopters, early mainstream, late mainstream and lagging adopters with the familiar diffusion proportions. For product adoption process specifically, the important distinction is: the buyer moves from awareness to a longer-term adoption decision.

IN REAL LIFE

A farmer hears about a new irrigation tool, asks questions, tries one unit and then buys more. The buyer moves from awareness to a longer-term adoption decision.

Remember: The buyer moves from awareness to a longer-term adoption decision.

Innovators

UNDERSTAND THE IDEA

The adoption process moves through awareness, interest, evaluation, trial and adoption. Consumers differ in their willingness to adopt new products. The slide’s adopter curve identifies innovators, early adopters, early mainstream, late mainstream and lagging adopters with the familiar diffusion proportions. For innovators specifically, the important distinction is: they accept more uncertainty when trying something new.

IN REAL LIFE

A small group of technology enthusiasts experiments with a newly released wearable before mainstream reviews exist. They accept more uncertainty when trying something new.

Remember: They accept more uncertainty when trying something new.

Early adopters

UNDERSTAND THE IDEA

The adoption process moves through awareness, interest, evaluation, trial and adoption. Consumers differ in their willingness to adopt new products. The slide’s adopter curve identifies innovators, early adopters, early mainstream, late mainstream and lagging adopters with the familiar diffusion proportions. For early adopters specifically, the important distinction is: their adoption can influence others.

IN REAL LIFE

A respected runner buys a new fitness watch soon after release and shares a careful review. Their adoption can influence others.

Remember: Their adoption can influence others.

Early majority

UNDERSTAND THE IDEA

The adoption process moves through awareness, interest, evaluation, trial and adoption. Consumers differ in their willingness to adopt new products. The slide’s adopter curve identifies innovators, early adopters, early mainstream, late mainstream and lagging adopters with the familiar diffusion proportions. For early majority specifically, the important distinction is: they adopt once evidence becomes more reassuring.

IN REAL LIFE

A customer waits until several colleagues successfully use a new payment app. They adopt once evidence becomes more reassuring.

Remember: They adopt once evidence becomes more reassuring.

Late majority

UNDERSTAND THE IDEA

The adoption process moves through awareness, interest, evaluation, trial and adoption. Consumers differ in their willingness to adopt new products. The slide’s adopter curve identifies innovators, early adopters, early mainstream, late mainstream and lagging adopters with the familiar diffusion proportions. For late majority specifically, the important distinction is: social and practical pressure supports later adoption.

IN REAL LIFE

A shopkeeper begins using a digital billing tool after nearby competitors and suppliers have already switched. Social and practical pressure supports later adoption.

Remember: Social and practical pressure supports later adoption.

Laggards

UNDERSTAND THE IDEA

The adoption process moves through awareness, interest, evaluation, trial and adoption. Consumers differ in their willingness to adopt new products. The slide’s adopter curve identifies innovators, early adopters, early mainstream, late mainstream and lagging adopters with the familiar diffusion proportions. For laggards specifically, the important distinction is: the business changes after most comparable shops already have.

IN REAL LIFE

A long-established shop adopts online payments only when cash transactions become difficult. The business changes after most comparable shops already have.

Remember: The business changes after most comparable shops already have.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • The Buyer Decision Process for New Products
  • The adoption process is the
  • mental process an individual goes
  • through from first learning about
  • an innovation to final regular use.
  • Stages in the adoption
  • process include:
  • The adoption process: To help get
  • tentative consumers over the
  • buying decision hump, Beyond
  • Meat invited consumers to “try
  • some free—zip, zero, zilch” at their
  • local grocery store.
  • The Buyer Decision Process for New Products
  • Individual Differences in Innovativeness
  • Early Adopters
  • Early Mainstream
  • Late Mainstream
  • Lagging Adopters
  • The Buyer Decision Process for New Products
  • Adopter Categories Based on Relative Time of Adoption of Innovations

Business markets and the business buyer model

Business buying happens when an organisation buys something for work, production or resale. It is different from a person shopping for home because more people, rules and budgets are often involved.

In one sentence

Business buyers purchase for production, resale or organisational use. Compared with consumer markets, organisational buying typically involves fewer larger buyers, derived demand, professional purchasing and more formal decisions. The business-buyer model adds organisational processes and the buying centre.

Consumer vs business markets

UNDERSTAND THE IDEA

Business buyers purchase for production, resale or organisational use. Compared with consumer markets, organisational buying typically involves fewer larger buyers, derived demand, professional purchasing and more formal decisions. The business-buyer model adds organisational processes and the buying centre. For consumer vs business markets specifically, the important distinction is: the market differs in purpose and purchasing process.

IN REAL LIFE

A student buys five pens for herself while a school orders five thousand for classes. The market differs in purpose and purchasing process.

Remember: The market differs in purpose and purchasing process.

Business market characteristics

UNDERSTAND THE IDEA

Business buyers purchase for production, resale or organisational use. Compared with consumer markets, organisational buying typically involves fewer larger buyers, derived demand, professional purchasing and more formal decisions. The business-buyer model adds organisational processes and the buying centre. For business market characteristics specifically, the important distinction is: organisational markets have different purchasing patterns from household markets.

IN REAL LIFE

An automobile parts factory orders specialised fasteners from a limited set of approved vendors. Organisational markets have different purchasing patterns from household markets.

Remember: Organisational markets have different purchasing patterns from household markets.

Business buyer behaviour model

UNDERSTAND THE IDEA

Business buyers purchase for production, resale or organisational use. Compared with consumer markets, organisational buying typically involves fewer larger buyers, derived demand, professional purchasing and more formal decisions. The business-buyer model adds organisational processes and the buying centre. For business buyer behaviour model specifically, the important distinction is: organisational stimuli pass through several people and controls.

IN REAL LIFE

A company receives an equipment quotation, reviews specifications with engineers and asks finance to approve spending. Organisational stimuli pass through several people and controls.

Remember: Organisational stimuli pass through several people and controls.

Derived demand

UNDERSTAND THE IDEA

Business buyers purchase for production, resale or organisational use. Compared with consumer markets, organisational buying typically involves fewer larger buyers, derived demand, professional purchasing and more formal decisions. The business-buyer model adds organisational processes and the buying centre. For derived demand specifically, the important distinction is: business demand ultimately reflects demand further down the chain.

IN REAL LIFE

A packaging manufacturer gets more orders because a food brand's consumer sales have grown. Business demand ultimately reflects demand further down the chain.

Remember: Business demand ultimately reflects demand further down the chain.

Professional purchasing

UNDERSTAND THE IDEA

Business buyers purchase for production, resale or organisational use. Compared with consumer markets, organisational buying typically involves fewer larger buyers, derived demand, professional purchasing and more formal decisions. The business-buyer model adds organisational processes and the buying centre. For professional purchasing specifically, the important distinction is: buying is handled by people formally responsible for the decision.

IN REAL LIFE

A procurement officer evaluates competing printer suppliers against technical, service and price requirements. Buying is handled by people formally responsible for the decision.

Remember: Buying is handled by people formally responsible for the decision.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Business Markets and Buyer Behavior
  • Business buyer behavior refers to the buying behavior of
  • the organizations that buy goods and services for use in the
  • production of other products and services that are sold,
  • rented, or supplied to others.
  • The business buying process is the process where
  • business buyers determine which products and services are
  • needed to purchase, and then find, evaluate, and choose
  • among alternative brands.
  • The Business Buyer Decision Process
  • Difference between Business and Consumer Market
  • Market Structure and Demand
  • Nature of the Buying Unit
  • Types of Decisions and the Decision Process
  • Business Markets
  • I. Market Structure and Demand
  • Fewer but larger buyers
  • Derived demand
  • Inelastic demand
  • Fluctuating demand
  • Business Markets
  • II. Nature of the Buying Unit
  • Business buyers usually face more complex buying decisions than do
  • consumer buyers. Compared with consumer purchases, a business
  • purchase usually involves:
  • More decision participants
  • More professional purchasing effort
  • More buyer and seller interaction
  • Business Markets
  • III. Types of Decisions and the Decision Process
  • Business buyers usually face more complex buying decisions
  • than consumer buyers.
  • Supplier development is the systematic development of
  • networks of supplier-partners to ensure an appropriate and
  • dependable supply of products and materials for use in making
  • products or reselling them to others.
  • Business Buyer Behavior
  • A Model of Business Buyer Behavior
21 · Consumer Behaviour

Major business buying situations

Business purchases can be new or repeated. A company buying an item for the first time may research many options. When buying a familiar item again, it may repeat the old order or change some conditions.

In one sentence

A straight rebuy repeats a familiar order; a modified rebuy revises the product or supplier terms; a new-task purchase involves a first-time problem and more information gathering. The situation affects purchasing effort and the number of participants.

Straight rebuy

UNDERSTAND THE IDEA

A straight rebuy repeats a familiar order; a modified rebuy revises the product or supplier terms; a new-task purchase involves a first-time problem and more information gathering. The situation affects purchasing effort and the number of participants. For straight rebuy specifically, the important distinction is: the routine order uses an established specification.

IN REAL LIFE

A hospital reorders its usual paper supplies from the approved vendor without major changes. The routine order uses an established specification.

Remember: The routine order uses an established specification.

Modified rebuy

UNDERSTAND THE IDEA

A straight rebuy repeats a familiar order; a modified rebuy revises the product or supplier terms; a new-task purchase involves a first-time problem and more information gathering. The situation affects purchasing effort and the number of participants. For modified rebuy specifically, the important distinction is: the repeat purchase is modified in important details.

IN REAL LIFE

A hotel renews its laundry contract but asks existing suppliers for improved pickup terms. The repeat purchase is modified in important details.

Remember: The repeat purchase is modified in important details.

New-task purchase

UNDERSTAND THE IDEA

A straight rebuy repeats a familiar order; a modified rebuy revises the product or supplier terms; a new-task purchase involves a first-time problem and more information gathering. The situation affects purchasing effort and the number of participants. For new-task purchase specifically, the important distinction is: the organisation faces a new buying problem.

IN REAL LIFE

A college purchases its first campus-wide access-control system and researches vendors extensively. The organisation faces a new buying problem.

Remember: The organisation faces a new buying problem.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Business Buyer Behavior
  • Major Types of Buying Situations
  • Straight rebuy is a buying situation in which the buyer routinely
  • reorders something without any modifications.
  • Modified rebuy is a buying situation in which the buyer wants to modify
  • product specifications, prices, terms, or suppliers.
  • New task is a buying situation in which the buyer purchases a product
  • or service for the first time.

Buying centre and B2B influences

In a company, one person may notice a need, another may suggest a supplier, and someone else may approve the purchase. This group is called the buying centre. Its decisions can also be affected by the economy, the organisation and each person involved.

In one sentence

A buying centre includes users, influencers, buyers, deciders and gatekeepers. Environmental, organisational, interpersonal and individual factors all influence decisions. Knowing who controls information and approval is as important as identifying the company.

Buying centre participants

UNDERSTAND THE IDEA

A buying centre includes users, influencers, buyers, deciders and gatekeepers. Environmental, organisational, interpersonal and individual factors all influence decisions. Knowing who controls information and approval is as important as identifying the company. For buying centre participants specifically, the important distinction is: several people take different roles in one purchase.

IN REAL LIFE

IT staff recommend laptops, finance sets a budget and the director authorises the purchase. Several people take different roles in one purchase.

Remember: Several people take different roles in one purchase.

Interpersonal influences

UNDERSTAND THE IDEA

A buying centre includes users, influencers, buyers, deciders and gatekeepers. Environmental, organisational, interpersonal and individual factors all influence decisions. Knowing who controls information and approval is as important as identifying the company. For interpersonal influences specifically, the important distinction is: relationships and authority shape buying-centre decisions.

IN REAL LIFE

A senior engineer's recommendation receives more attention than a junior employee's preference. Relationships and authority shape buying-centre decisions.

Remember: Relationships and authority shape buying-centre decisions.

Organisational influences

UNDERSTAND THE IDEA

A buying centre includes users, influencers, buyers, deciders and gatekeepers. Environmental, organisational, interpersonal and individual factors all influence decisions. Knowing who controls information and approval is as important as identifying the company. For organisational influences specifically, the important distinction is: policies and structures constrain buying behaviour.

IN REAL LIFE

A company requires three price quotations before authorising equipment purchases. Policies and structures constrain buying behaviour.

Remember: Policies and structures constrain buying behaviour.

Environmental influences

UNDERSTAND THE IDEA

A buying centre includes users, influencers, buyers, deciders and gatekeepers. Environmental, organisational, interpersonal and individual factors all influence decisions. Knowing who controls information and approval is as important as identifying the company. For environmental influences specifically, the important distinction is: conditions outside the firm affect the decision.

IN REAL LIFE

A supplier shortage forces a manufacturer to review alternative sources. Conditions outside the firm affect the decision.

Remember: Conditions outside the firm affect the decision.

Individual B2B influences

UNDERSTAND THE IDEA

A buying centre includes users, influencers, buyers, deciders and gatekeepers. Environmental, organisational, interpersonal and individual factors all influence decisions. Knowing who controls information and approval is as important as identifying the company. For individual b2b influences specifically, the important distinction is: personal risk tolerance still matters in organisational decisions.

IN REAL LIFE

Two purchasing officers differ in their willingness to adopt a new supplier. Personal risk tolerance still matters in organisational decisions.

Remember: Personal risk tolerance still matters in organisational decisions.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Business Buyer Behavior
  • Participants in the Business Buying Process
  • Buying center consists of all the individuals and units that play a role in
  • the business purchase decision-making process.
  • Business Buyer Behavior
  • Participants in the Business Buying Process
  • Users are those that will use the product or service.
  • Influencers help define specifications and provide information for
  • evaluating alternatives.
  • Buyers have formal authority to select the supplier and arrange terms
  • of purchase.
  • Deciders have formal or informal power to select and approve final
  • Gatekeepers control the flow of information.
  • Business Buyer Behavior
  • Major Influences on Business Buyer Behavior

Eight stages of business buying

A business purchase can move through several steps: recognise a need, describe what is required, look for suppliers, ask for proposals, choose a supplier, place the order and review the result. The exact steps depend on the kind of purchase.

In one sentence

The process generally includes problem recognition, general need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification and performance review. Real purchases may revisit or skip steps, especially for routine reorders.

Problem recognition in business buying

UNDERSTAND THE IDEA

The process generally includes problem recognition, general need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification and performance review. Real purchases may revisit or skip steps, especially for routine reorders. For problem recognition in business buying specifically, the important distinction is: the organisation recognises a purchasing need.

IN REAL LIFE

An office's old printers repeatedly break down. The organisation recognises a purchasing need.

Remember: The organisation recognises a purchasing need.

General need description

UNDERSTAND THE IDEA

The process generally includes problem recognition, general need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification and performance review. Real purchases may revisit or skip steps, especially for routine reorders. For general need description specifically, the important distinction is: it defines requirements before naming a model.

IN REAL LIFE

A school describes the capacity and safety it needs in a new bus. It defines requirements before naming a model.

Remember: It defines requirements before naming a model.

Product specification

UNDERSTAND THE IDEA

The process generally includes problem recognition, general need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification and performance review. Real purchases may revisit or skip steps, especially for routine reorders. For product specification specifically, the important distinction is: the buying requirement becomes precise enough for comparison.

IN REAL LIFE

Engineers write measurable technical specifications for a replacement motor. The buying requirement becomes precise enough for comparison.

Remember: The buying requirement becomes precise enough for comparison.

Supplier search

UNDERSTAND THE IDEA

The process generally includes problem recognition, general need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification and performance review. Real purchases may revisit or skip steps, especially for routine reorders. For supplier search specifically, the important distinction is: a buyer searches for possible sources of supply.

IN REAL LIFE

A hospital identifies qualified vendors for sterilisation equipment. A buyer searches for possible sources of supply.

Remember: A buyer searches for possible sources of supply.

Proposal solicitation

UNDERSTAND THE IDEA

The process generally includes problem recognition, general need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification and performance review. Real purchases may revisit or skip steps, especially for routine reorders. For proposal solicitation specifically, the important distinction is: the buyer invites formal offers.

IN REAL LIFE

A university sends a request for quotations to shortlisted laboratory suppliers. The buyer invites formal offers.

Remember: The buyer invites formal offers.

Supplier selection

UNDERSTAND THE IDEA

The process generally includes problem recognition, general need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification and performance review. Real purchases may revisit or skip steps, especially for routine reorders. For supplier selection specifically, the important distinction is: it chooses the vendor most suitable to its needs.

IN REAL LIFE

A hotel scores laundry suppliers on service quality, price and capacity. It chooses the vendor most suitable to its needs.

Remember: It chooses the vendor most suitable to its needs.

Order routine specification

UNDERSTAND THE IDEA

The process generally includes problem recognition, general need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification and performance review. Real purchases may revisit or skip steps, especially for routine reorders. For order routine specification specifically, the important distinction is: the decision becomes a formal order.

IN REAL LIFE

A company issues a purchase order with quantity, delivery schedule and terms. The decision becomes a formal order.

Remember: The decision becomes a formal order.

Performance review

UNDERSTAND THE IDEA

The process generally includes problem recognition, general need description, product specification, supplier search, proposal solicitation, supplier selection, order-routine specification and performance review. Real purchases may revisit or skip steps, especially for routine reorders. For performance review specifically, the important distinction is: the buyer evaluates the supplier's performance.

IN REAL LIFE

After three months, a hospital audits whether a supplier met promised delivery and service levels. The buyer evaluates the supplier's performance.

Remember: The buyer evaluates the supplier's performance.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • The Business Buying Process
  • Stages of the Business Buyer Decision Process
  • The Business Buying Process
  • Problem recognition occurs when someone in the company
  • recognizes a problem or need.
  • Internal stimuli - Need for new product or production equipment
  • External stimuli - Idea from a trade show or advertising
  • General need description describes the characteristics and
  • quantity of the needed item.
  • Product specification describes the technical criteria.
  • Value analysis is an approach to cost reduction where
  • components are studied to determine if they can be redesigned,
  • standardized, or made with less costly methods of production.
  • The Business Buying Process
  • Supplier search involves compiling a list of qualified suppliers to find the
  • best vendors.
  • Proposal solicitation is the process of requesting proposals from qualified
  • Supplier selection is when the buying center creates a list of desired
  • supplier attributes and negotiates with preferred suppliers for favorable
  • terms and conditions.
  • Order-routine specifications includes the final order with the chosen
  • supplier and lists all of the specifications and terms of the purchase.
  • Performance review involves a critique of supplier performance to the
  • order-routine specifications.

E-procurement and B2B digital marketing

E-procurement means using online systems to find suppliers, place orders and manage purchases. B2B digital marketing means using digital channels to reach other businesses, not just individual shoppers.

In one sentence

E-procurement uses electronic channels to identify suppliers, place orders and manage purchase processes. Digital B2B marketing engages decision makers through useful information, professional networks and targeted communication. Cost, speed and information sharing are important advantages.

E-procurement

UNDERSTAND THE IDEA

E-procurement uses electronic channels to identify suppliers, place orders and manage purchase processes. Digital B2B marketing engages decision makers through useful information, professional networks and targeted communication. Cost, speed and information sharing are important advantages. For e-procurement specifically, the important distinction is: buying and order information are exchanged electronically.

IN REAL LIFE

A manufacturer places repeat material orders through a secure supplier portal. Buying and order information are exchanged electronically.

Remember: Buying and order information are exchanged electronically.

Online purchasing

UNDERSTAND THE IDEA

E-procurement uses electronic channels to identify suppliers, place orders and manage purchase processes. Digital B2B marketing engages decision makers through useful information, professional networks and targeted communication. Cost, speed and information sharing are important advantages. For online purchasing specifically, the important distinction is: it buys through a digital channel.

IN REAL LIFE

A small office orders standard stationery using a business marketplace. It buys through a digital channel.

Remember: It buys through a digital channel.

B2B digital marketing

UNDERSTAND THE IDEA

E-procurement uses electronic channels to identify suppliers, place orders and manage purchase processes. Digital B2B marketing engages decision makers through useful information, professional networks and targeted communication. Cost, speed and information sharing are important advantages. For b2b digital marketing specifically, the important distinction is: business buyers evaluate an offer online before speaking to sales.

IN REAL LIFE

A software supplier publishes product specifications for business procurement teams. Business buyers evaluate an offer online before speaking to sales.

Remember: Business buyers evaluate an offer online before speaking to sales.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • E-Procurement and Online Purchasing
  • Online purchasing
  • Company-buying sites
  • Online procurement is standard
  • procedure for most companies today,
  • letting business marketers connect with
  • customers online to sell products and
  • services, provide customer support
  • services, and maintain ongoing customer
  • relationships.
  • E-Procurement and Online Purchasing
  • Access to new suppliers
  • Lowers costs
  • Speeds order processing and delivery
  • Enhances information sharing
  • Improves sales
  • Facilitates service and support
  • Disadvantages
  • Erodes relationships as buyers search for new suppliers
  • Business-to-Business Digital and Social Media Marketing
  • B-to-B digital and social media marketing is using digital and social
  • media marketing approaches to engage business customers and
  • manage customer relationships anywhere, any time.
  • Container shipping giant Maersk
  • Line engages business customers
  • through a boatload of digital and
  • social media. “The goal is . . . to get
  • closer to our customers.”
25 · Consumer Behaviour

Institutional and government markets

Schools, hospitals, charities and government offices also buy goods and services. They usually have clear budgets, formal procedures and responsibilities that affect how they choose suppliers.

In one sentence

Institutional buyers include hospitals, schools, prisons and other organisations serving people in their care. Government buyers purchase goods and services for public functions and may follow formal procurement procedures. Their objectives can differ from ordinary consumer profit motives.

Institutional markets

UNDERSTAND THE IDEA

Institutional buyers include hospitals, schools, prisons and other organisations serving people in their care. Government buyers purchase goods and services for public functions and may follow formal procurement procedures. Their objectives can differ from ordinary consumer profit motives. For institutional markets specifically, the important distinction is: the buyer serves an institutional mission, not personal consumption.

IN REAL LIFE

A public hospital buys supplies under strict care-quality and budget requirements. The buyer serves an institutional mission, not personal consumption.

Remember: The buyer serves an institutional mission, not personal consumption.

Government purchasing markets

UNDERSTAND THE IDEA

Institutional buyers include hospitals, schools, prisons and other organisations serving people in their care. Government buyers purchase goods and services for public functions and may follow formal procurement procedures. Their objectives can differ from ordinary consumer profit motives. For government purchasing markets specifically, the important distinction is: the purchase follows public procurement rules.

IN REAL LIFE

A municipal office conducts a documented tender for road-maintenance materials. The purchase follows public procurement rules.

Remember: The purchase follows public procurement rules.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Institutional and Government Markets
  • Institutional markets consist of schools, hospitals, nursing homes, and
  • prisons that provide goods and services to people in their care.
  • Government markets tend to favour domestic suppliers, require them to
  • submit bids, and normally award the contract to the lowest bidder.

Segmentation and geographic/demographic variables

Segmentation means dividing a large market into smaller groups of people with something in common. Geographic segmentation groups people by place. Demographic segmentation groups them by facts such as age, income, occupation or family size.

In one sentence

Segmentation divides an extensive market into groups with different needs, characteristics or behaviour. Consumer markets can be segmented geographically, demographically, psychographically and behaviourally. A useful segment must connect to a meaningful marketing decision.

Segmentation Targeting Positioning framework

UNDERSTAND THE IDEA

Segmentation divides an extensive market into groups with different needs, characteristics or behaviour. Consumer markets can be segmented geographically, demographically, psychographically and behaviourally. A useful segment must connect to a meaningful marketing decision. For segmentation targeting positioning framework specifically, the important distinction is: the three decisions work in sequence.

IN REAL LIFE

A chain divides shoppers into groups, selects daily commuters and promotes speed as its advantage. The three decisions work in sequence.

Remember: The three decisions work in sequence.

Market segmentation

UNDERSTAND THE IDEA

Market segmentation means dividing a large group of customers into smaller groups that share a useful characteristic. This helps a business design a more relevant product and message instead of treating everyone as if they want the same thing.

IN REAL LIFE

A tutoring centre separates school students from working adults seeking certification. The groups have distinct requirements.

Remember: The groups have distinct requirements.

Geographic segmentation

UNDERSTAND THE IDEA

Segmentation divides an extensive market into groups with different needs, characteristics or behaviour. Consumer markets can be segmented geographically, demographically, psychographically and behaviourally. A useful segment must connect to a meaningful marketing decision. For geographic segmentation specifically, the important distinction is: the distinction follows location.

IN REAL LIFE

A footwear brand promotes monsoon-ready shoes in rainy regions. The distinction follows location.

Remember: The distinction follows location.

Demographic segmentation

UNDERSTAND THE IDEA

Segmentation divides an extensive market into groups with different needs, characteristics or behaviour. Consumer markets can be segmented geographically, demographically, psychographically and behaviourally. A useful segment must connect to a meaningful marketing decision. For demographic segmentation specifically, the important distinction is: the distinction follows measurable population characteristics.

IN REAL LIFE

A bank markets student accounts by age and education stage. The distinction follows measurable population characteristics.

Remember: The distinction follows measurable population characteristics.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Segmentation, Targeting and Positioning
  • Market Segmentation
  • Market segmentation requires dividing a market into smaller
  • segments with distinct needs, characteristics, or behaviors
  • that might require separate marketing strategies or mixes.
  • Market Segmentation
  • Segmenting consumer markets
  • Segmenting business markets
  • Segmenting international markets
  • Requirements for effective segmentation
  • Market Segmentation
  • Segmenting Consumer Markets
  • Geographic segmentation
  • Demographic segmentation
  • Psychographic segmentation
  • Behavioral segmentation
  • Market Segmentation
  • Segmenting Consumer Markets
  • Geographic segmentation divides the market into different geographical
  • units such as nations, regions, states, counties, cities, or even
  • neighborhoods.
  • Demographic segmentation divides the market into segments based
  • on variables such as age, life-cycle stage, gender, income, occupation,
  • education, religion, ethnicity, and generation.

Psychographic and behavioural segmentation

Psychographic segmentation looks at how people live, what they value and what interests them. Behavioural segmentation looks at what they do, such as how often they buy or what benefits they want.

In one sentence

Psychographic segmentation uses lifestyle, personality and social class. Behavioural segmentation considers occasions, desired benefits, user status, usage rate and loyalty. Different variables can overlap when building a target segment.

Psychographic segmentation

UNDERSTAND THE IDEA

Psychographic segmentation uses lifestyle, personality and social class. Behavioural segmentation considers occasions, desired benefits, user status, usage rate and loyalty. Different variables can overlap when building a target segment. For psychographic segmentation specifically, the important distinction is: the group is defined by lifestyle and interests.

IN REAL LIFE

A travel company offers trekking holidays to people attracted to outdoor adventure. The group is defined by lifestyle and interests.

Remember: The group is defined by lifestyle and interests.

Behavioural segmentation

UNDERSTAND THE IDEA

Psychographic segmentation uses lifestyle, personality and social class. Behavioural segmentation considers occasions, desired benefits, user status, usage rate and loyalty. Different variables can overlap when building a target segment. For behavioural segmentation specifically, the important distinction is: the group is defined by purchasing behaviour.

IN REAL LIFE

A food app offers rewards to customers ordering every week. The group is defined by purchasing behaviour.

Remember: The group is defined by purchasing behaviour.

Benefit segmentation

UNDERSTAND THE IDEA

Psychographic segmentation uses lifestyle, personality and social class. Behavioural segmentation considers occasions, desired benefits, user status, usage rate and loyalty. Different variables can overlap when building a target segment. For benefit segmentation specifically, the important distinction is: customers differ in the benefit they want.

IN REAL LIFE

A cosmetics brand separates buyers seeking sun protection from those seeking moisturising benefits. Customers differ in the benefit they want.

Remember: Customers differ in the benefit they want.

Usage-rate segmentation

UNDERSTAND THE IDEA

Psychographic segmentation uses lifestyle, personality and social class. Behavioural segmentation considers occasions, desired benefits, user status, usage rate and loyalty. Different variables can overlap when building a target segment. For usage-rate segmentation specifically, the important distinction is: customers are grouped by how much they use.

IN REAL LIFE

A mobile network offers packages for light and very heavy data users. Customers are grouped by how much they use.

Remember: Customers are grouped by how much they use.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Market Segmentation
  • Segmenting Consumer Markets
  • Age and life-cycle stage segmentation divides a market
  • into different age and life-cycle groups.
  • Gender segmentation divides a market into different
  • segments based on gender.
  • Income segmentation divides a market into different
  • income segments
  • Market Segmentation
  • Segmenting Consumer Markets
  • Psychographic segmentation divides a market into different segments
  • based on social class, lifestyle, or personality characteristics.
  • Lifestyle segmentation: Panera caters to a healthy eating lifestyle
  • segment of people who want more than just good-tasting food—they
  • want food that’s good for them, too.
  • Behavioral segmentation divides a market into segments based on
  • consumer knowledge, attitudes, uses of a product, or responses to a
  • Market Segmentation
  • Behavioral Segmentation
  • Benefits sought
  • Loyalty status
  • Benefit segmentation: Schwinn
  • makes bikes for every benefit
  • segment. For example, its e-bikes
  • “help make the morning commute or
  • ride around town a little bit easier.”

Business and international segmentation

Businesses can also divide organisational buyers into groups based on industry, size, location and buying needs. International segmentation considers differences between countries and regions.

In one sentence

Business markets add industry, company size, technology, purchasing approaches and other organisational variables. International segmentation also considers economic, geographic, political/legal and cultural differences.

Business segmentation variables

UNDERSTAND THE IDEA

Business markets add industry, company size, technology, purchasing approaches and other organisational variables. International segmentation also considers economic, geographic, political/legal and cultural differences. For business segmentation variables specifically, the important distinction is: institutional differences shape selling.

IN REAL LIFE

A printer supplier separates universities, hospitals and small offices by organisation size and application. Institutional differences shape selling.

Remember: Institutional differences shape selling.

International segmentation variables

UNDERSTAND THE IDEA

Business markets add industry, company size, technology, purchasing approaches and other organisational variables. International segmentation also considers economic, geographic, political/legal and cultural differences. For international segmentation variables specifically, the important distinction is: cross-country factors guide its grouping.

IN REAL LIFE

A food company adjusts flavours for markets with different preferences and regulations. Cross-country factors guide its grouping.

Remember: Cross-country factors guide its grouping.

Intermarket segmentation

UNDERSTAND THE IDEA

Business markets add industry, company size, technology, purchasing approaches and other organisational variables. International segmentation also considers economic, geographic, political/legal and cultural differences. For intermarket segmentation specifically, the important distinction is: a segment may cross national boundaries.

IN REAL LIFE

A global shoe brand identifies similar fitness-focused consumers living in different countries. A segment may cross national boundaries.

Remember: A segment may cross national boundaries.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Market Segmentation
  • Segmenting Business Markets
  • Consumer and business marketers use many of the same variables to
  • segment their markets.
  • Additional variables include:
  • Customer operating characteristics
  • Purchasing approaches
  • Situational factors
  • Personal characteristics
  • Market Segmentation
  • Segmenting International Markets
  • Geographic location
  • Economic factors
  • Political and legal factors
  • Cultural factors
29 · Consumer Behaviour

Requirements for effective segmentation

A useful market segment must be possible to understand, large or valuable enough to serve, reachable through suitable channels, different from other groups and practical for the company to act on.

In one sentence

Segments should be measurable, accessible, substantial, differentiable and actionable. This checks whether market groups are real, reachable, economically worthwhile, distinct and serviceable.

Measurable segments

UNDERSTAND THE IDEA

Segments should be measurable, accessible, substantial, differentiable and actionable. This checks whether market groups are real, reachable, economically worthwhile, distinct and serviceable. For measurable segments specifically, the important distinction is: the size of the target group can be assessed.

IN REAL LIFE

A retailer estimates how many households live in an apartment district before opening a branch. The size of the target group can be assessed.

Remember: The size of the target group can be assessed.

Accessible segments

UNDERSTAND THE IDEA

Segments should be measurable, accessible, substantial, differentiable and actionable. This checks whether market groups are real, reachable, economically worthwhile, distinct and serviceable. For accessible segments specifically, the important distinction is: a segment is useful only when reachable.

IN REAL LIFE

A brand chooses a group it can actually reach through local stores and delivery. A segment is useful only when reachable.

Remember: A segment is useful only when reachable.

Substantial segments

UNDERSTAND THE IDEA

Segments should be measurable, accessible, substantial, differentiable and actionable. This checks whether market groups are real, reachable, economically worthwhile, distinct and serviceable. For substantial segments specifically, the important distinction is: a segment needs adequate commercial size.

IN REAL LIFE

A small business rejects a niche whose expected demand cannot support stocking and service costs. A segment needs adequate commercial size.

Remember: A segment needs adequate commercial size.

Differentiable segments

UNDERSTAND THE IDEA

Segments should be measurable, accessible, substantial, differentiable and actionable. This checks whether market groups are real, reachable, economically worthwhile, distinct and serviceable. For differentiable segments specifically, the important distinction is: separate targeting is meaningful only when needs or responses differ.

IN REAL LIFE

A company checks whether two customer groups respond differently to a service bundle. Separate targeting is meaningful only when needs or responses differ.

Remember: Separate targeting is meaningful only when needs or responses differ.

Actionable segments

UNDERSTAND THE IDEA

Segments should be measurable, accessible, substantial, differentiable and actionable. This checks whether market groups are real, reachable, economically worthwhile, distinct and serviceable. For actionable segments specifically, the important distinction is: the business can create a practical strategy for that segment.

IN REAL LIFE

A sports retailer identifies runners it can reach and serve with available expertise and inventory. The business can create a practical strategy for that segment.

Remember: The business can create a practical strategy for that segment.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Market Segmentation
  • Requirements/Criteria’s for Effective Segmentation
  • Measurable – The size, purchasing power and profile of the segments
  • can be measured.
  • Accessible – The segments can be effectively reached and served.
  • Substantial – The segments are large and profitable enough to serve.
  • Differential – The segments are conceptually distinguishable and
  • respond differently to different marketing – mix elements and programs.
  • Actionable – Effective programs can be formulated for attracting and
  • serving the segments.

Target-market evaluation and strategies

After dividing a market into groups, a business decides which groups to serve. It may target a broad market, several separate groups or one small segment. The best choice depends on customer needs and business resources.

In one sentence

Evaluate segment size and growth, structural attractiveness and the organisation’s objectives and resources. Strategies include undifferentiated, differentiated, concentrated and micromarketing approaches, with individual marketing as the narrowest form. Choosing depends on resources and demand differences.

Segment attractiveness

UNDERSTAND THE IDEA

Evaluate segment size and growth, structural attractiveness and the organisation’s objectives and resources. Strategies include undifferentiated, differentiated, concentrated and micromarketing approaches, with individual marketing as the narrowest form. Choosing depends on resources and demand differences. For segment attractiveness specifically, the important distinction is: it checks more than segment size.

IN REAL LIFE

A bakery compares neighbourhood segments by demand, competition and access. It checks more than segment size.

Remember: It checks more than segment size.

Undifferentiated targeting

UNDERSTAND THE IDEA

Evaluate segment size and growth, structural attractiveness and the organisation’s objectives and resources. Strategies include undifferentiated, differentiated, concentrated and micromarketing approaches, with individual marketing as the narrowest form. Choosing depends on resources and demand differences. For undifferentiated targeting specifically, the important distinction is: the same broad offer serves many consumers.

IN REAL LIFE

A salt brand sells one standard everyday product to the mass market. The same broad offer serves many consumers.

Remember: The same broad offer serves many consumers.

Differentiated targeting

UNDERSTAND THE IDEA

Evaluate segment size and growth, structural attractiveness and the organisation’s objectives and resources. Strategies include undifferentiated, differentiated, concentrated and micromarketing approaches, with individual marketing as the narrowest form. Choosing depends on resources and demand differences. For differentiated targeting specifically, the important distinction is: different segments receive different marketing mixes.

IN REAL LIFE

A hotel runs distinct offers for families and business travellers. Different segments receive different marketing mixes.

Remember: Different segments receive different marketing mixes.

Concentrated niche marketing

UNDERSTAND THE IDEA

Evaluate segment size and growth, structural attractiveness and the organisation’s objectives and resources. Strategies include undifferentiated, differentiated, concentrated and micromarketing approaches, with individual marketing as the narrowest form. Choosing depends on resources and demand differences. For concentrated niche marketing specifically, the important distinction is: limited resources are focused on one segment.

IN REAL LIFE

A small manufacturer specialises in medical uniforms for local clinics. Limited resources are focused on one segment.

Remember: Limited resources are focused on one segment.

Micromarketing

UNDERSTAND THE IDEA

Evaluate segment size and growth, structural attractiveness and the organisation’s objectives and resources. Strategies include undifferentiated, differentiated, concentrated and micromarketing approaches, with individual marketing as the narrowest form. Choosing depends on resources and demand differences. For micromarketing specifically, the important distinction is: decisions are made at a smaller level.

IN REAL LIFE

A grocery chain tailors selections to the needs of particular local stores. Decisions are made at a smaller level.

Remember: Decisions are made at a smaller level.

Local marketing

UNDERSTAND THE IDEA

Evaluate segment size and growth, structural attractiveness and the organisation’s objectives and resources. Strategies include undifferentiated, differentiated, concentrated and micromarketing approaches, with individual marketing as the narrowest form. Choosing depends on resources and demand differences. For local marketing specifically, the important distinction is: an offer is adapted to local circumstances.

IN REAL LIFE

A café serves a special breakfast near a railway station because commuters arrive early. An offer is adapted to local circumstances.

Remember: An offer is adapted to local circumstances.

Individual marketing

UNDERSTAND THE IDEA

Evaluate segment size and growth, structural attractiveness and the organisation’s objectives and resources. Strategies include undifferentiated, differentiated, concentrated and micromarketing approaches, with individual marketing as the narrowest form. Choosing depends on resources and demand differences. For individual marketing specifically, the important distinction is: the offer is customised for one buyer.

IN REAL LIFE

A bespoke tailor adjusts fit and fabric for each customer. The offer is customised for one buyer.

Remember: The offer is customised for one buyer.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Market Targeting
  • Evaluating Market Segments
  • Segment size and growth
  • Segment structural attractiveness
  • Company objectives and resources
  • Selecting Target Market Segments
  • A target market is a set of buyers who share common needs or
  • characteristics that the company decides to serve.
  • Market Targeting
  • Market-Targeting Strategies
  • Market Targeting
  • Selecting Target Market Segments
  • Undifferentiated marketing targets the whole market with one offer.
  • Mass marketing
  • Focuses on common needs rather than what’s different
  • Differentiated marketing targets several different market segments and
  • designs separate offers for each.
  • Goal is to achieve higher sales and stronger position
  • More expensive than undifferentiated marketing
  • Market Targeting
  • Concentrated marketing targets a large share of a smaller market.
  • Limited company resources
  • Knowledge of the market
  • More effective and efficient
  • Micromarketing is the practice of tailoring products and marketing
  • programs to suit the tastes of specific individuals and locations.
  • Local marketing
  • Individual marketing
  • Market Targeting
  • Selecting Target Markets
  • Individual marketing involves
  • tailoring products and marketing
  • programs to the needs and
  • preferences of individual
  • Also known as:
  • One-to-one marketing
  • Mass customization
  • Individual marketing: The
  • Rolls-Royce Bespoke design team
  • works closely with individual
  • customers to help them create their
  • own unique Rolls-Royces.
  • Market Targeting
  • Selecting Target Market Segments
  • Choosing a targeting strategy depends on
  • Company resources
  • Product variability
  • Product life-cycle stage
  • Market variability
  • Competitor’s marketing strategies

Differentiation, positioning and positioning errors

Differentiation means giving people a real reason to choose one product over another. Positioning means building a clear idea of that product in customers’ minds. A business can make mistakes by positioning too vaguely or making promises that do not fit the product.

In one sentence

Positioning is how a product occupies a distinctive place in customers’ minds. Firms identify valuable differences, choose a defensible advantage and communicate it consistently. Weak execution can produce underpositioning, overpositioning, confused positioning or doubtful positioning.

Product differentiation

UNDERSTAND THE IDEA

Positioning is how a product occupies a distinctive place in customers’ minds. Firms identify valuable differences, choose a defensible advantage and communicate it consistently. Weak execution can produce underpositioning, overpositioning, confused positioning or doubtful positioning. For product differentiation specifically, the important distinction is: a distinctive benefit helps separate the offer.

IN REAL LIFE

A phone brand demonstrates unusually long battery life compared with similar-priced alternatives. A distinctive benefit helps separate the offer.

Remember: A distinctive benefit helps separate the offer.

Competitive advantage

UNDERSTAND THE IDEA

Positioning is how a product occupies a distinctive place in customers’ minds. Firms identify valuable differences, choose a defensible advantage and communicate it consistently. Weak execution can produce underpositioning, overpositioning, confused positioning or doubtful positioning. For competitive advantage specifically, the important distinction is: an advantage must matter to customers.

IN REAL LIFE

A logistics company reliably delivers next-day parcels in districts where rivals are slower. An advantage must matter to customers.

Remember: An advantage must matter to customers.

Positioning

UNDERSTAND THE IDEA

Positioning means creating a clear, distinct idea of a product in the customer’s mind. A brand might want to be known as the fastest, safest or most affordable option. The claim should match the product experience.

IN REAL LIFE

A college bookstore becomes known as the fastest place to obtain prescribed texts. It builds a clear place in buyers' minds.

Remember: It builds a clear place in buyers' minds.

Value proposition

UNDERSTAND THE IDEA

Positioning is how a product occupies a distinctive place in customers’ minds. Firms identify valuable differences, choose a defensible advantage and communicate it consistently. Weak execution can produce underpositioning, overpositioning, confused positioning or doubtful positioning. For value proposition specifically, the important distinction is: the customer can understand what benefit is offered and why.

IN REAL LIFE

A gym promises affordable coaching with flexible hours and delivers the services. The customer can understand what benefit is offered and why.

Remember: The customer can understand what benefit is offered and why.

Underpositioning

UNDERSTAND THE IDEA

Positioning is how a product occupies a distinctive place in customers’ minds. Firms identify valuable differences, choose a defensible advantage and communicate it consistently. Weak execution can produce underpositioning, overpositioning, confused positioning or doubtful positioning. For underpositioning specifically, the important distinction is: customers cannot explain what makes it special.

IN REAL LIFE

A bakery advertises itself only as a 'good shop' with no distinct benefit. Customers cannot explain what makes it special.

Remember: Customers cannot explain what makes it special.

Overpositioning

UNDERSTAND THE IDEA

Positioning is how a product occupies a distinctive place in customers’ minds. Firms identify valuable differences, choose a defensible advantage and communicate it consistently. Weak execution can produce underpositioning, overpositioning, confused positioning or doubtful positioning. For overpositioning specifically, the important distinction is: customers may see it as serving only a narrow premium market.

IN REAL LIFE

An affordable fashion shop markets itself as ultra-luxury and unintentionally discourages students. Customers may see it as serving only a narrow premium market.

Remember: Customers may see it as serving only a narrow premium market.

Confused positioning

UNDERSTAND THE IDEA

Positioning is how a product occupies a distinctive place in customers’ minds. Firms identify valuable differences, choose a defensible advantage and communicate it consistently. Weak execution can produce underpositioning, overpositioning, confused positioning or doubtful positioning. For confused positioning specifically, the important distinction is: customers receive incompatible signals.

IN REAL LIFE

A restaurant advertises itself as fast, exclusive, ultra-cheap and luxury in the same week. Customers receive incompatible signals.

Remember: Customers receive incompatible signals.

Doubtful positioning

UNDERSTAND THE IDEA

Positioning is how a product occupies a distinctive place in customers’ minds. Firms identify valuable differences, choose a defensible advantage and communicate it consistently. Weak execution can produce underpositioning, overpositioning, confused positioning or doubtful positioning. For doubtful positioning specifically, the important distinction is: the promised position is not believable.

IN REAL LIFE

A low-cost smartwatch brand claims hospital-grade precision without supporting evidence. The promised position is not believable.

Remember: The promised position is not believable.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Differentiation and Positioning
  • Product position is the way the product is defined by consumers on
  • important attributes.
  • Positioning: Sonos does more than just sell speakers; it unleashes “All
  • the music on earth, in every room of your house, wirelessly.”
  • Differentiation and Positioning
  • Choosing a Differentiation and Positioning Strategy
  • Identifying a set of possible competitive advantages to build a position
  • Choosing the right competitive advantages
  • Selecting an overall positioning strategy
  • Communicating and delivering the chosen position to the market
  • Differentiation and Positioning
  • Choosing a Differentiation and Positioning Strategy
  • Competitive advantage is an advantage over competitors gained by
  • offering consumers greater value, either through lower prices or by
  • providing more benefits that justify higher prices.
  • Identifying a set of possible competitive advantages to differentiate along
  • the lines of:
  • Differentiation and Positioning
  • Choosing a Differentiation and Positioning Strategy
  • A competitive advantage should be:
  • Important – The difference delivers a highly valued benefit to a sufficient
  • number of buyers.
  • Distinctive –The difference either isn’t offered by others or is offered in a
  • more distinctive way by the company.
  • Superior – The difference is superior to others to obtain the same benefit.
  • Communicable – The difference is communicable and visible to buyers.
  • Preemptive – The difference cannot be easily copied by competitors.
  • Affordable – The buyer can afford to pay for the difference.
  • Profitable – The Company will find it profitable to introduce the difference.
  • Positioning Errors
  • Any company should avoid the following four major positioning errors:
  • Under positioning – Some companies discover that buyers have
  • only a vague idea of the brand. Buyers really don’t sense anything
  • special about it.
  • Over positioning – Buyers may have too narrow an image about the
  • brand. (Mind set for higher price, but actually, lower is available too).
  • Confused Positioning – Buyers might have a confused image of the
  • brand resulting from making too many claims or changing the brand’s
  • position too frequently.
  • Doubtful Positioning – Buyers may find it hard to believe that the
  • brand claims in view of the product’s features, price or manufacturer.
32 · Consumer Behaviour

Globalisation, AR, AI and VR

People around the world can now discover and compare more products. New tools may also change buying. AI can suggest products, AR can show how a product looks in your room, and VR can let you explore a simulated place. These are extra explanations because the slides give only headings.

In one sentence

The source introduces globalisation and immersive/AI technologies as headings without developed lessons. Supplementary clarification: global platforms expose consumers to wider choices, AI can personalise discovery, AR can preview products, and VR can simulate experiences. Consider privacy and bias when evaluating their effects.

Globalisation and consumption

UNDERSTAND THE IDEA

The source introduces globalisation and immersive/AI technologies as headings without developed lessons. Supplementary clarification: global platforms expose consumers to wider choices, AI can personalise discovery, AR can preview products, and VR can simulate experiences. Consider privacy and bias when evaluating their effects. For globalisation and consumption specifically, the important distinction is: global access changes available choices.

IN REAL LIFE

A local shopper can compare clothes from domestic brands with international stores on the same phone. Global access changes available choices.

Remember: Global access changes available choices.

Artificial intelligence in consumer decisions

UNDERSTAND THE IDEA

The source introduces globalisation and immersive/AI technologies as headings without developed lessons. Supplementary clarification: global platforms expose consumers to wider choices, AI can personalise discovery, AR can preview products, and VR can simulate experiences. Consider privacy and bias when evaluating their effects. For artificial intelligence in consumer decisions specifically, the important distinction is: the system may simplify comparison but can reflect the quality of its inputs.

IN REAL LIFE

An online retailer recommends phones based on selected price and battery preferences. The system may simplify comparison but can reflect the quality of its inputs.

Remember: The system may simplify comparison but can reflect the quality of its inputs.

Augmented reality in consumer decisions

UNDERSTAND THE IDEA

The source introduces globalisation and immersive/AI technologies as headings without developed lessons. Supplementary clarification: global platforms expose consumers to wider choices, AI can personalise discovery, AR can preview products, and VR can simulate experiences. Consider privacy and bias when evaluating their effects. For augmented reality in consumer decisions specifically, the important distinction is: the buyer can visualise scale before purchase.

IN REAL LIFE

A furniture app lets a buyer preview a digital sofa within a phone image of the living room. The buyer can visualise scale before purchase.

Remember: The buyer can visualise scale before purchase.

Virtual reality in consumer decisions

UNDERSTAND THE IDEA

The source introduces globalisation and immersive/AI technologies as headings without developed lessons. Supplementary clarification: global platforms expose consumers to wider choices, AI can personalise discovery, AR can preview products, and VR can simulate experiences. Consider privacy and bias when evaluating their effects. For virtual reality in consumer decisions specifically, the important distinction is: a simulated environment helps the traveller explore the offering.

IN REAL LIFE

A resort offers a headset-based tour of its rooms before booking. A simulated environment helps the traveller explore the offering.

Remember: A simulated environment helps the traveller explore the offering.

See the original lecture slides and exact terminology

These extracts follow the lecturer’s slide order. Some original PDF lines are short fragments; select a slide number to see the complete original page.

  • Role of Globalization on consumption
  • Influence of AR, AI, VR on consumer
  • decisions and recent trends.
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Product Decisions
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