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Chapter 7 Marketing Management
Chapter 7 Marketing Management
Non-durable goods:
- are consumed in the short-term (newspapers, food).
- Under conditions of low involvement.
- Do not consider the details so much
- base their decision on past experiences (little if any search for info).
Marketers should focus on pricing and distribution strategies.
a) Convenience product:
- typically a non-durable good or service that consumers purchase frequently with a
minimum of comparison and effort (eg. milk).
- Consumers expect these products to be handy and will buy whatever brands are
easy to obtain
- in general, low priced & widely available.
- Marketers must make sure that the product is easily obtainable in all the places
where consumers are likely to look for it.
- Marketers classify convenience products as staples, impulse products, emergency
products.
Staples = basic or necessary items that are available almost everywhere (eg.
Milk, bread)
- Most consumers dont perceive big differences among brands.
- Marketers must make sure that product consistently meets their
expectations for quality and that it is available at a price comparable to the
competitions prices.
Impulse product = people often buy at the spur of the moment.
- Marketers must make sure that package and product design is enticing,
highly visible.
Emergency products = products we purchase when we are in dire need.
Quality and price of the products may be irrelevant due to urgency. (Eg.
Bandages, umbrella). These products must meet customers needs and be
available in the right place and in right sizes.
b) Shopping products =
-goods/services for which consumers will spend time and effort gathering information
on price, product attributes and product quality.
-Likely to compare alternatives before making a purchase.
- Customers have little prior knowledge about the product and are moderately brand
loyal
-These products need to have attributes the customers want and that packaging
points out those features. (Eg. Computers).
Some shopping products have special characteristics:
Attribute-based shopping products = e.g. clothing. People will spend time
finding the best possible selection.
Price-based shopping products = shoppers will visit numerous shops to save
money.
Shopbots/intelligent agents = computer programs that find sites selling a
particular product. provide info on competitors prices + rate of the e-
commerce websites
Speciality product =
- Have unique characteristics that are important to buyers at any price. (ex: Rolex
watch)
- Consumers tend to be loyal to specific brands and know a good deal about the
product
- Extended problem-solving purchase that requires a lot of effort to choose
firm needs to create marketing strategies that make their product stand out from
the rest.
MRO products = Maintenance (eg. light bulb), repair (eg. washers) and operating
(eg. computer paper), goods that a business customer consumes in a relatively short
time.
Marketers use sales forces or rely on catalogues sales, the internet and
telemarketing to keep prices low as possible
Raw materials = products of the fishing, lumber, agricultural and mining industries
that organisations purchase to use in their finished products.
Processed materials = produced when firms transform raw materials from their
original state become a art of the products they make.
Specialized services from outside suppliers essential to the operation
of an organization but are not part of the production of a product (ex: legal
services)
2. Interest
A prospective adopter begins to see how a new product might satisfy an existing
or newly realised need.
consumers look for and are open to information about the innovation.
Marketers often design teaser advertisements that give prospective
customers just enough information about the new product to make them curious
and to stimulate their interest.
3. Evaluation
A prospect weighs the costs and benefits of the new product: for complex,
risky, expensive products, people think about the innovation a great deal before
trying it (marketers try to show prospects how these products can benefit them).
Little evaluation may occur with an impulse purchase: a purchase made
without any planning or search effort. For these products, marketers design the
product to be eye-catching and appealing to consumers to note them quickly.
4. Trial
Potential buyers actually experience or use the product for the first time.
Marketers often stimulate trial by providing customers the opportunity to
sample the product.
Try in shop spend hours trying out the products and taking home a full
shopping basket
Some will move to the adaptation stage, some will fin it too expensive and
drop out
5. Adoption
Prospects actually buy the product and learn how to use or maintain it (if it is
a good). If it is an idea: the individual agrees with the new idea. (!)
Marketers need to provide follow-up contacts and communications with
adopters to ensure they are satisfied and remain loyal to the new product over
time.
6. Confirmation
The customer weighs expected vs. actual benefits and costs.
Favourable experiences adopters becoming loyal customers as their initial
positive opinions result in confirmation. Some marketers feel that, in this stage,
reselling is important (advertisements, sales presentations etc to reinforce
customers choice).
4.2 The diffusion of innovations
how it spread throughout the population
Consumers and business costumers differ in how eager or willing they are to try
something new, lengthening the diffusion process by months or even years.
Adopter categories
1) Innovators = first 2.5% of adopters,
extremely adventurous and willing to
take risks, younger and better off
financially than others in the
population + worldly and well
educated.
Company must take care not to anger innovators e.g. through inconsistent pricing
strategies.
3) Early majority = 34% of adopters, avoid being either first or last to try an
innovation, typically middle-class consumers and are deliberate and cautious,
have slightly above average education and income after that the product is
no longer considered new or different
4) Late majority = 34% of adopters, older & more conservative and typically
have lower than average levels of education and income. They avoid trying a
new product unless it is no longer risky and until they are under pressure from
peer group.