Marketing Management Framework

Many known, reliable patterns govern the science of consumer behavior, and this
chapter shows how managers can use this knowledge wisely. The chapter begins
by showing the three major phases that consumers go through when making any
purchase. Consumers also make different kinds of purchases, which are important
to understand because they modify the consumer thought processes. Finally, the
consumer decision-making process is described in detail.
 2.1 The Three Phases of Purchase Process

• Pre-purchase

-Identify need or want, Search possible solution, Build consideration set

•Purchase

-Narrow consideration set, Decide on retail channel

• Post-purchase

-Customer satisfaction, Likelihood to repeat, Generate word of mouth

 The buying process is consistent whether the buyer is a consumer or a business.
Consumer buying is easy to relate to; it involves people buying something for
themselves or their households. A business customer is an agent buying something on
behalf of an organization. The agent can be an administrative assistant deciding to use
UPS or FedEx, or the agent can be a group of people, representing different aspects of
the organization (accounting, ops, etc.) comprising a collective buying center. All
purchases, B2C or B2B, go through the three stages, but the amount of time spent in any
stage depends in part on what is being bought.
 B2B Customers
B2B customers are often classified according to what they sell:
•Installations (eg, equipment for new factories)
•Accessories (e. g., computers to help run the office)
•Raw materials (lumber, plastics)
•Components (processed items that are components in a later finished product)
•Business services (e.g., insurance, legal, consulting)
 Several kinds of colleagues have input in business purchases. These different
perspectives need to Integrated and reconciled before the decision process is complete
and an order submitted. Imagine a small company deciding to purchase a new printer.
The typical roles in a buying center are these:

The Initiator: Such as an administrative assistant who notices that one of the
printers in the office is frequently breaking down
The User: Every staff member who tries to use that printer
The Influencer: The IT guy who says, "Well, Brand X is cheaper, but I like Brand Y
The Buyer: The head administrative person whose responsibilities are to facilitate
supplies but also to answer to...
The Gatekeeper: Traditionally, a conservative accountant type whose job it is to
tighten purse strings.
 2.2 DIFFERENT KINDS OF PURCHASES
Marketers distinguish among types of purchases;
 Convenience item -purchase that doesn't require a lot of thought.
 Shopping purchases -require some thought or planning.
 Specialty purchases - These purchases are occasional, they are often more expensive,
and as a result they require more thought.
For B2B customers, (the terms are different, but the ideas are analogous).
 Straight rebuy, such as when the office copier needs toner and the office administrator
buys the usual brand.
 Modified rebuy, such as when the copier lease comes up and the boss wants to try a
different vendor.
 New buy –the office is considering buying teleconferencing equipment for the first
time, and some thought are required to even identify the relevant attributes.
2.3 The Marketing Science of Customer behavior

Marketers aim to understand consumer needs and deliver suitable

products, but consumers are complex and often unpredictable.
Predicting consumer behavior is similar to predicting the weather, which
is simple but complex. For low-involvement products, marketing
forecasts are often optimized by stating that the next brand purchased
will likely be the same as the previous one. The complexities of
consumer psychology include sensation, perception, learning, memory,
emotions, motivation, attitudes, and decision making.
 2-3a Sensation and Perception
Marketers use positioning statements and perceptual maps to understand consumer
perception. They use visual stimuli like product design and imagery to create brand
associations. Colors can convey cultural meaning and create buzz for products.

Marketing management involves understanding the various senses and perceptions of

a brand, including sound, smell, taste, touch, and sensation. Sound influences
customers' perceptions of products, while smell can attract customers through
gender-specific scents. Touch conveys brand imagery through well-designed products,
while subliminal advertising captures the vision subconsciously. By understanding
these factors, marketers can create effective and memorable marketing strategies
that resonate with consumers and drive sales.
 Research suggests that subliminal advertising does not work, as it
relies on ambiguity in print ads. Marketers have debunked this notion,
but still conduct research in mere exposure and perceptual fluency.
Mere exposure suggests that repeated exposures to a brand name or
ad bring familiarity, which leads to a positive feeling. Perceptual
fluency is a subtle phenomenon where colors and fonts can make a
message appear professional, emotional, contemporary, or gothic,
making it part of the brand.
 2-3b Learning and Memory and Emotion
Brand associations are sensory and perceptual impressions that
consumers store in their memory. Learning is the process of
transferring these associations into short-term memory and long-
term memory through repetition and elaboration. Two fundamental
theories about learning are classical conditioning and the
experiments by Ivan Pavlov on salivating dogs. Classical conditioning
involves a series of stages, from eliciting drool to learning that a bell
is associated with food.
 Marketing management involves the learning process of
consumers, which involves eliciting drool from an attractive person
or product. Neutral stimuli, such as logos for brands like Adidas,
Nike, and New Balance, can also help consumers associate these
symbols with their unique brand images. Companies may change
their names and logos to shed negative associations, while jingles
can be used to create catchy lyrics that consumers can associate
with their brand. In the ever-changing world, companies may
change their names and logos to create fresh associations.
People learn through operant conditioning, similar to Skinner boxes,
can be used by marketers to design loyalty programs and increase
customer satisfaction and sales by offering free coffee and variable
ratio rewards.

Emotions play a crucial role in understanding consumer

relationships with brands, influencing phenomena like brand
communities and influencing corporate responses like customer
satisfaction or dissatisfaction.
 2-3c Motivation
Motivation in consumer behavior refers to internal psychological processes
driving actions, purchasing decisions, and brand engagement. Understanding
this is crucial for businesses to identify factors influencing behavior and develop
effective marketing strategies.

The Theories of Maslow's Hierarchy of Needs in Consumer Behavior .

Maslow’s hierarchy of needs is a theory of psychology explaining human

motivation based on the pursuit of different levels of needs. The hierarchy
consist of five levels.
 2-3d Attitude and Decision Making
Marketers want to understand how consumers think and what motivates
them so that they might persuade consumers to have a positive regard for
a brand and see it as superior to all other, at least for their needs.
Attitudes and decision making affect the extent to which consumers will
buy a particular brand, repeatedly purchase it, become loyal, recommend
it to others, and be so as to be insensitive to price increases.
 2-3e How do Cultural Differences Affect's Customer Behavior

Cultural differences affect consumers' behavior, including

individual differences in response to ads and brands, and
predictable sociocultural effects like social class and age. Social
class is a complex construct that includes income, family
background, and career paths. Old-monied people seek exclusivity
in brands to affirm their social standing.
 Geert Hofstede's framework helps multinational companies make a global-local decision:
should they create a single global entity or tailor it to local customers' tastes and
preferences? The choice depends on the company's financial and operational efficiencies,
but leveraging similarities across countries and cultures can lead to efficiencies and a
stronger brand image. Hofstede's four primary dimensions help differentiate countries and
ensure a meaningful connection with customers.

1. Power distance is the extent to which a culture is delineated between those who have
power and those who do not. High-power-distance cultures are typically very hierarchical,
such as Brazil, England, Japan, Portugal, and many Latin, Asian, and African countries. Low-
power-distance cultures are more egalitarian, such as Israel, New Zealand, Norway, and
the U.S
2. Cultures also vary along the continuum from individualism, in which people mostly look
out for themselves, to collectivism, in which people's identities and esteem are rooted in
the groups to which they belong-their families, their companies, their country, etc. Does a
person tend to think in terms of I or we? Individualistic countries include the U.S. and
Canada, Australia and New Zealand, England, France, and Germany. Collectivistic cultures
dominate Asia, Latin America, and Africa.
3. Countries and cultures differ on whether they are characterized as masculine, focused on
achievement, success, and assertiveness, or feminine, and more focused on modesty,
caring for others, and enhancing the quality of life. Masculine countries include
China, Hungary, Italy, Mexico, the U.K., and the U.S. Feminine countries include Chile,
Denmark, Finland, the Netherlands, Portugal, and Sweden
4. Uncertainty avoidance is the extent to which people are uncomfortable by ambiguity
and therefore try to resolve such situations, usually by imposing rules and structure.
Countries with high uncertainty avoidance are Belgium, France, Germany, Greece, Italy,
Portugal, and Spain. Countries with relatively more tolerance for ambiguity are Denmark,
Ireland, Poland, Sweden, the U.K., and the U.S.
These differences and observations would merely be interesting if they did not have clear
marketing implications, but they do.
 The mass-class movement has led to the production of less expensive lines of luxury
goods, allowing brand access to relative peasants.
 Nouveaus aim to attain their status through purchases, using conspicuous consumption
and loud branding.
 Age cohorts also influence shopping patterns, with young people buying furniture, then
entertainment, travel, and eventually, college.
 The baby boomer generation, known for their societal mindedness, is expected to see
large-scale altruism and increased donations to nonprofits.
 Sociocultural factors, such as social class, age cohort, gender, and ethnicity, also
influence how buyers form impressions, make brand choices, and form opinions. To
foreshadow a few observation:
•China's rising economy is creating a large demand for luxury goods from successful
businessmen, from newly empowered businesswomen, from pairs of grandparents doting
on their sole grandson, etc.
•Danes are fond of luxury goods, and their society is so egalitarian that they believe luxury
goods should be accessible to all
•European brands tend to dominate the high end due not just to a perception or cultural
heritage, but also to structural industry differences, such as
•Fine craftsmanship in watches built in Switzerland.
•Fashion or exotic cars designed in Italy.
•Supply chains such as extensive fields of flowers or vineyards for perfumeries or
vintners in France.
 •In South Korea, the big buyers of luxury brands are young women, and it seems that
their goals are both to be recognized and to fit in with their friends.
•Online retail continues to grow strongly:
•U.S. online retail is about $250b, almost 10% of which is through smartphones, and
another 10% through social media networks.
•Euro e-sales are at $210b, Brazil is at $16b, India is at $60b, and China is at $710b.
•From the beginning, reasons for buying online are primarily convenience, access to a
broader assortment, and an easier ability to make price comparisons. In addition, many
consumers enjoy reading product reviews and ratings, and searching for coupon.
 How do consumers think?
•They begin with sensing and perceiving information, which may be learned and
stored in memory.
•Motivations help marketers understand what consumers are seeking so that they
can make customers satisfied with their purchases.
•Attitudes and decision making are subject to influence by good information as well
as biases.
•Finally, social norms, such as generational preferences or choices based on wealth,
also define us
How to Prep a Case: Effective Case Analysis for A
good case analysis proceeds by first reading the opening and closing
Class or for an Interviewparagraph or two and then skimming
the case, paying attention to the section headings and the exhibits to see the
basics. During this initial pass, some rough questions will begin to form.
Next, in more careful read of the case, the soon-to-be familiar marketing
framework- 5Cs, STP, 4Ps- will provide a systematic way of thinking and
structuring the case questions and concerns, along with the issues
involved in any possible solutions.
 Step 1: is Situational Analysis, which achieved primarily through the 5Cs.
The company described, as are the current customer base, the actions of the
competition, the collaborators, and the industry context as the setting in
which this business action occur.
Step 2: involves Identifying the focal dilemma, in this case from among the
several that are stated or implied. A SWOT analysis is really useful tool for
problem identification.
For marketing cases, STP follow the 5Cs. The key goal for marketers is to keep
their customers coming back- repeat purchase and/ or upgraded purchases
and/or word of mouth. So the next phase of the case analysis is to understand
who the customers are, what they want, and whether the company is delivering
better quality (or value or service) than its competitors
Step 3: is to Propose Solutions to the central problem, it is most informative and
persuasive. If the suggestion about what the company should do is supported
with an explanation of the why, that is, show that the solutions are being
generated and evaluated according to certain criteria.
The ideal solution and supportive logic are next fleshed out in positioning. The
proposed forms of the 4Ps need to be consistent with each other and with the
goals. A final nice is suggestion regarding how to measure the success of the plan
if implemented.
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