MT 450 Market management The Consumer and Business Market Scenario Marketing As the marketing manager of a major franchise, your job will be to perform the daily tasks of a marketing manager. Select one of the franchise companies below for which you would like to be Marketing Manager. 1. Edible Arrangements - Edible fruit baskets - Creates fresh fruit arrangements and gourmet chocolate dipped fruit to order. 2. Cartridge World - Cartridge Company - carries a complete line of both inkjet and toner printer cartridges. Offers both remanufactured and Original Brand (OEM) ink and toner cartridges for nearly all brands of printers, copiers, fax and postage machines. 3. Liberty Tax Service - Taxes - provides tax service to both consumers and businesses. Assumptions Your plan is to aggressively go after the consumer and business market creating dual revenue streams. Your marketing strategy, research marketing mix and customer relationship marketing will be different for both groups. In this scenario, you will be responsible for conducting the following tasks: Observing and analyzing market trends Examining competitors' products and services Investigating ways of improving existing products and services, and increasing profitability Identifying target markets and developing strategies to communicate with them Assignment There are two parts to this Assignment so be sure to complete both parts. Part 1: The Consumer and Business Market Write a brief paragraph that answers the following questions. (This should not be in Question/Answer format). Which company did you choose as your focus in this Marketing Management Assignment? Where are the company's headquarters located? What is the mission statement of the company you chose to study? The previous marketing manager developed an advertising campaign before the marketing strategy. How could this advertising campaign potentially create problems for the product? Part 2: Marketing Strategy Planning In preparation for your first presentation to the CEO of the organization, you will create a 3-5 page paper. You will examine how the 3 C's (customer targets, competitors, customer value proposition) and 4 P's (Product, Price, Place, and Promotion) of marketing strategy influence marketing decisions about how you can increase purchases to consumers and increase purchases for business-to-business. Your goal is to complete the consumer and business-to-business marketing strategy planning document. Using the bolded words as subheadings for each response as seen in the PDF of this Assignment, answer the following: 1. SMART Goals: Using the SMART acronym, list several objectives you wish to accomplish. 2. The 3 C's of marketing strategy: Customer Targets: Discuss the customer targets (target market), you should have at least two. Provide for the CEO a more specific description of which customers you (the marketing manager) want to persuade to buy the product or service. Competitors: For each customer target, identify a competitor (brand or company) that may be able to provide the customer target a like product that would appeal to them. Value Proposition: What do you see as the value proposition? What are reasons for customers to purchase your brand/product. Summarize into a single paragraph. 3. The 4 P's of marketing strategy: Marketing Mix for the Consumer Market: Describe each of the 4 P's as it applies to consumers that would purchase your product a. Product b. Price c. Place d. Promotion 4. Marketing Mix: Business-to-Business Market: Describe each of the 4 P's as it applies to business that would purchase your product a. Product b. Price c. Place d. Promotion 5. Competitive Advantage: Using one (or more) of the competitive advantages below, describe the components of this advantage and why customers will perceive them as an advantage for your product or service over its competitors'. a. Cost-based advantage b. Price-based advantage c. Quality-based advantage d. Differentiation advantage e. Perceived quality advantage f. Brand-based advantage 2. Product Life Cycle: Discuss the company's products in The Product Life Cycle (PLC). Why do you think they are in that stage? Do you think there is any possibility of changing the current stage of the Product Life Cycle? For instance, if current products are in the maturity stage, what can the company do to have products in the Introduction or Growth stage? 3. Increase Purchases: Consumers: Thinking of your consumer target market, how can you get current customers of the product or service to buy more? 4. Increase Purchases: Business-to-Business: Thinking of your businessto-business target market, how can you get current customers of the product or service to buy more? Provide a 3-5 page (APA formatted) marketing strategy plan paper with at least three supporting references that addresses this Assignment. Your paper should be in APA format and cite all 3 references used. Submit your paper to the Unit 2: Assignment Dropbox. For assistance with APA format and citation style, visit the KU Writing Resources located in the home area. See Rubric below for Assignment details. Global Business Today 8e by Charles W.L. Hill 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 10 The Foreign Exchange Market 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-2 Introduction Question: What is the foreign exchange market? The foreign exchange market is a market for converting the currency of one country into that of another country Question: What is the exchange rate? The exchange rate is the rate at which one currency is converted into another 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-3 Functions of the FX Market Question: What is the purpose of the foreign exchange market? The foreign exchange market: 1. Enables the conversion of the currency of one country into the currency of another 2. Provides some insurance against foreign exchange risk - the adverse consequences of unpredictable changes in exchange rates 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-4 Functions of the FX Market Spot exchange rate - the rate at which a foreign exchange dealer converts one currency into another currency on a particular day Forward exchange rate - the exchange rate governing a transaction in which two parties agree to exchange currency and execute the deal at some specific date in the future Currency swap - the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-5 Nature of the FX Market The foreign exchange market is a global network of banks, brokers, and foreign exchange dealers connected by electronic communications systems The market is always open somewhere in the world If exchange rates quoted in different markets were not essentially the same, there would be an opportunity for arbitrage - the process of buying a currency low and selling it high Most transactions involve U.S. dollars on one side The U.S. dollar is a vehicle currency 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-6 Theories of Exchange Rate Determination Question: What factors are important to future exchange rates? Three factors that have an important impact on future exchange rate movements are: 1. A country's price inflation 2. A country's interest rate 3. Market psychology 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-7 Theories of Exchange Rate Determination Question: How are prices related to exchange rate movements? To understand how prices and exchange rates are linked, we need to understand: The law of one price The theory of purchasing power parity 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-8 Theories of Exchange Rate Determination Question: How do interest rates affect exchange rates? The Fisher Effect states that a country's nominal interest rate (i) is the sum of the required real rate of interest (r ) and the expected rate of inflation over the period for which the funds are to be lent (I) In other words, i = r + I The International Fisher Effect suggests that for any two countries, the spot exchange rate should change in an equal amount but in the opposite direction to the difference in nominal interest rates between the two countries 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-9 Theories of Exchange Rate Determination Question: How are exchange rates influenced by investor psychology? The bandwagon effect occurs when expectations on the part of traders turn into self-fulfilling prophecies, and traders join the bandwagon and move exchange rates based on group expectations Governmental intervention can prevent the bandwagon from starting, but is not always effective 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-10 Exchange Rate Forecasting Question: Should companies invest in exchange rate forecasting services to help with decisionmaking? The efficient market school - forward exchange rates are the best predictors of future spot exchange rates Investing in forecasting services would be a waste of money The inefficient market school - companies should invest in forecasting services Forward rates are not the best predictor of future spot rates 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-11 Exchange Rate Forecasting Question: How should exchange rate forecasts be prepared? There are two approaches to exchange rate forecasting: 1. Fundamental analysis 2. Technical analysis 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-12 Currency Convertibility Question: Are all currencies freely convertible? A currency is freely convertible when both residents and non-residents can purchase unlimited amounts of foreign currency with the domestic currency A currency is externally convertible when only nonresidents can convert their holdings of domestic currency into a foreign currency A currency is nonconvertible when both residents and non-residents are prohibited from converting their holdings of domestic currency into a foreign currency 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-13 Implications for Managers Question: What does the foreign exchange market mean for international firms? Firms must understand the influence of exchange rates on the profitability of trade and investment deals This exchange rate risk can be divided into: 1. Transaction exposure 2. Translation exposure 3. Economic exposure 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-14 Implications for Managers Question: How can firms minimize translation and transaction exposure? Firms can: Buy forward Use swaps Lead and lag payables and receivables paying suppliers and collecting payment from customers early or late depending on expected exchange rate movements 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-15 Implications for Managers Question: How can a firm reduce economic exposure? To reduce economic exposure firms need to distribute productive assets to various locations so the firm's long-term financial well-being is not severely affected by changes in exchange rates This requires that the firm's assets are not overly concentrated in countries where likely rises in currency values will lead to damaging increases in the foreign prices of the goods and services they produce 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-16 Implications for Managers Question: Are there other strategies to manage foreign exchange risk? To further manage foreign exchange risk, firms should: 1. Establish central control to protect resources and ensure that each subunit adopts the correct mix of tactics and strategies 2. Distinguish between transaction, translation, and economic exposure 3. Attempt to forecast future exchange rates 4. Establish good reporting systems 5. Produce monthly foreign exchange exposure reports 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 10-17 [MT450: Marketing Management] Unit 2 Assignment Assignment There are two parts to this Assignment so be sure to complete both parts. Part 1: The Consumer and Business Market Write a brief paragraph that answers the following questions. (This should not be in Question/Answer format). Which company did you choose as your focus in this Marketing Management Assignment? Where are the company's headquarters located? What is the mission statement of the company you chose to study? The previous marketing manager developed an advertising campaign before the marketing strategy. How could this advertising campaign potentially create problems for the product? Part 2: Marketing Strategy Planning In preparation for your first presentation to the CEO of the organization, you will create a 3-5 page paper. You will examine how the 3 C's (customer targets, competitors, value proposition) and 4 P's (Product, Price, Place, and Promotion) of marketing strategy influence marketing decisions about how you can increase purchases to consumers and increase purchases for business-to-business. Your goal is to complete the consumer and business-to-business marketing strategy planning document. Using the bolded words as subheadings for each response as seen in the PDF of this Assignment, answer the following: 1. SMART Goals: Using the SMART acronym, list several objectives you wish to accomplish. 2. The 3 C's of marketing strategy: Customer Targets: Discuss the customer targets (target market), you should have at least two. Provide for the CEO a more specific description of which customers you (the marketing manager) want to persuade to buy the product or service. Competitors: For each customer target, identify a competitor (brand or company) that may be able to provide the customer target a like product that would appeal to them. Value Proposition: What do you see as the value proposition? What are reasons for customers to purchase your brand/product? Summarize into a single paragraph. 3. The 4 P's of marketing strategy: Marketing Mix for the Consumer Market: Describe each of the 4 P's as it applies to consumers that would purchase your product a. Product b. Price c. Place [MT450: Marketing Management] d. Promotion 4. Marketing Mix: Business-to-Business Market: Describe each of the 4 P's as it applies to business that would purchase your product a. b. c. d. Product Price Place Promotion 5. Competitive Advantage: Using one (or more) of the competitive advantages below, describe the components of this advantage and why customers will perceive them as an advantage for your product or service over its competitors'. 1. 2. 3. 4. 5. 6. Cost-based advantage Price-based advantage Quality-based advantage Differentiation advantage Perceived quality advantage Brand-based advantage 6. Product Life Cycle: Discuss the company's products in The Product Life Cycle (PLC). Why do you think they are in that stage? Do you think there is any possibility of changing the current stage of the Product Life Cycle? For instance, if current products are in the maturity stage, what can the company do to have products in the Introduction or Growth stage? 7. Increase Purchases: Consumers: Thinking of your consumer target market, how can you get current customers of the product or service to buy more? 8. Increase Purchases: Business-to-Business: Thinking of your business-to-business target market, how can you get current customers of the product or service to buy more? Provide a 3-5 page (APA formatted) marketing strategy plan paper with at least three supporting references that addresses this Assignment. Your paper should be in APA format and cite all references used. Submit your paper to the Unit 2: Assignment Dropbox. For assistance with APA format and citation style, visit the KU Writing Resources located in the home area. See Rubric below for Assignment details. Unit 2 Assignment Grading Rubric 40 Possible Points Specific Paper Objectives: Assignment Checklist (80%): [MT450: Marketing Management] Company information 2 S.M.A.R.T. goals 3 Customer targets 3 Competition 3 Value proposition 3 Marketing Mix - Consumer 3 Marketing Mix - Business to Business market 3 Competitive advantage 3 Product Life Cycle 3 How can you increase purchases by consumers? 3 How can you increase purchases by businesses? 3 Subtotal 32 Writing Style, Grammar, APA (20%) Grammar and Spelling 3 Paper is 3-5 pages in length and responses are concise and direct 3 Reference list and citations are provided 2 8 Total 40 Analyzing Consumer Behavior Chapter Four Key Learning Points Concept and activity of market segmentation Segmentation implementation issues Understanding consumer motives for buying behavior Understanding how consumers make purchase decisions Importance of understanding where and when consumers purchase Implications for global and technology-based markets Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-2 Customer Analysis Customer analysis addresses five questions: Who are the current and potential customers for the product or service? Why do they buy? How do they make purchasing decisions? Where do they buy the product or service (what channels of distribution are used)? When do they buy? Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-3 Customer Analysis Customer analysis should ALSO study: Competitors' customers. Former customers. Nonusers. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-4 Who Are the Customers? Market segmentation is the key. Segmentation breaks mass markets into groups with different buying habits. Segmentation schemes are critical in certain situations. The segmentation process makes use of both primary and secondary data. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-5 Who Are the Customers? Benefits of market segmentation: More efficient than mass marketing Cost More effective than mass marketing Customization Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-6 Who Are the Customers? Single-customer segments make sense in certain circumstances: Small number of customers One-to-one marketing and mass customization Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-7 Discussion Question Using one-to-one marketing effectively requires that marketers have access to extensive databases. 1. What particular database fields might Club Med's marketers use in developing one-to-one marketing appeals for their new line of luxury hotels? 2. Can you think of an example of a product or service that offers consumers mass customization opportunities? Explain. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-8 Table 4.1 Geographic & Psychographic Segmentation Variables Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-9 Table 4.1 Demographic Segmentation Variables Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-10 Table 4.2 Behavioral Variables Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-11 Table 4.3 Consumption Index: Dental Accessories Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-12 Table 4.4 Product Preferences by Stage in the Family Life Cycle Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-13 Figure 4.1 Generational Cohorts Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-14 Table 4.5 Ethnic Differences in Consumption Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-15 Who Are the Customers? Psychographics: VALS is the most popular system. VALS segments individuals into eight groups based on: Primary motivation, and Resources. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-16 Who Are the Customers? VALS Psychographic Groups Innovators Thinkers Experiencers Achievers Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall Believers Strivers Makers Survivors 4-17 Figure 4.2 Sample VALS Questions See all the items . . .Take the VALS Survey! Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-18 Figure 4.3 How Tech Customers Stack Up Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-19 Discussion Question Media Junkies are entertainment oriented, have high resources, but are pessimistic toward new technology. If you worked for a TV network website or for Hulu.com or a TV network website, would you target this group? Why or why not? Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-20 Who Are the Customers? More on segmentation: Occasion segmentation can be profitable. Geographic, demographic, and usage are typically used. More businesses are adding psychographics. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-21 Who Are the Customers? Segmenting in Technology-Based Markets: Not all consumers are equally likely to adopt new innovations. The diffusion of innovations model describes how innovations are adopted throughout the marketplace. Positive word-of-mouth is often a key characteristic in new product adoption. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-22 Figure 4.4 Diffusion of Innovations Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-23 Who Are the Customers? Marketing Research Implications: Data Collection Primary data collected via a survey is often used to understand customers. Secondary data should also be explored: Government: http://www.census.gov/ Trade / professional publications Syndicated data Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-24 Table 4.6 MRI Travel Data Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-25 Activity Review Table 4.6 in your textbook and develop a profile of individuals who scuba dive. As you do so, pay particular attention to index numbers. What differences do you note between this profile and that of the person who goes to the beach for vacation? Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-26 Figure 4.5 Sample PRIZM Segment PRIZM Multi-media Presentation Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-27 Activity Visit the \"You Are Where You Live\" zip code look-up to learn about the PRIZM groups that characterize YOUR zip code! Compare your zip code results to the groups that characterize zip code 90210. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-28 Who Are the Customers? Marketing Research Implications: Developing Target Markets Parsimony must be considered. Selected segmentation scheme must statistically explain differences in purchasing behavior or other key variables. Behavior = f (segmentation variables). Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-29 Who Are the Customers? Marketing Research Implications: Developing Target Markets Other considerations when selecting one or more segments to target: Segment size Segment growth rate Environmental factors associated with the segment Potential competitive position Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-30 Illustration Though demand exceeds available supply, Harley-Davidson still needs to better understand its customer base. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-31 Illustration Table 4.7 Harley-Davidson Segmentation Study/Lifestyle Factors Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-32 Illustration Tables 4.8 and 4.9 Harley-Davidson Segmentation Scheme Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-33 Figure 4.6 Simplified Customer Behavior Model Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-34 Why Do Consumers Buy? The purchase decision process begins with need recognition. Maslow's Hierarchy of Needs: Five ordered levels of needs Most relevant for understanding consumer needs BENEFITS not attributes are key factor in motivating consumers to purchase. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-35 Illustration Marketing managers must translate product features into benefits. The Goodyear web page provides an excellent example of this premise in practice. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-36 How Do Consumers Make Purchase Decisions? Search For Alternatives follows Need Recognition. Sources of information may be: Internal, or External. The amount of information search undertaken is difficult to predict. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-37 How Do Consumers Make Purchase Decisions? Search For Alternatives Results in the creation of three sets of options: Evoked or consideration set Inert set Purchase set Primary research can determine in which set consumers place the brand. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-38 How Do Consumers Make Purchase Decisions? Evaluating Options in the Consideration Set: Product is decomposed into attributes. Multi-attribute model is used to make choice. Four key questions are raised by the multi-attribute model. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-39 Key Questions Raised by the Multi-Attribute Model Which attributes do customers use to define a product? How do we determine how much of each attribute a brand possesses? How are the importance weights determined? How do customers combine prior information to make choices? Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-40 Table 4.10 Simplified Customer Behavior Model Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-41 How Do Consumers Make Purchase Decisions? Post purchase Behavior: Consumers form expectations about the product prior to usage. Consumers evaluate product during and after consumption. Future purchases are highly dependent on post purchase evaluation. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-42 How Do Consumers Make Purchase Decisions? External influences help to shape the way consumers make purchase decisions. Key external influences include: Group influences. Product class influences. Situational influences. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-43 How Do Consumers Make Purchase Decisions? Family and Friends: Example: Family life cycle Social class: Upper, middle, working, and lower classes Culture: Extremely important in global marketing See Figure 4.8. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-44 Figure 4.8 Analysis for Marketing Decisions Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-45 How Do Consumers Make Purchase Decisions? Main Elements of Culture Language Religion Values and attitudes Education Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall Social organization Technology and material culture 4-46 Illustration Cultural differences may be found in the same neighborhood, such as Little Italy. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-47 \"Cultural differences are particularly important in a global marketing context. The biggest issue facing companies wanting to market products in other countries is the fact that significant differences in culture can affect the way customers respond to the product and the market strategy.\" - Russell S. Winer Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-48 How Do Consumers Make Purchase Decisions? Product class influences affecting technology: Rogers' study - five factors identified Potential for network externalities Perceived risk Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall Many factors influence adoption for this pen-based video camera. 4-49 How Do Consumers Make Purchase Decisions? Several situational influences exist: Physical surroundings Social surroundings Temporal factors Task definitional factors Antecedent states Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-50 How Do Consumers Make Purchase Decisions? Buying Roles in Group Buying Decisions Initiator Influencer Decider Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall Purchaser User 4-51 Where and When Do Customers Buy? Where do customers buy? When do customers buy? Understand purchase timing. Timing issues influence both marketing and operations. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-52 Executive Summary Understanding consumers is critical. Descriptive information is needed. Learn the benefits consumers seek. The buying process is complex. Understand where consumers buy. Know when consumers buy. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-53 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright 2011 Pearson Education, Inc., Publishing as Prentice Hall 4-54