(6.1) Identify and explain the five stages of the consumer buying process. Give examples of marketing activities designed to influence each stage.
Identifying a need gap
Any given potential customer feels an urge for a particular product due to the situation in which they find themselves in. Various factors could trigger this urge including the intrinsic and extrinsic factors. The intrinsic factors include the idea that the potential customers could be hungry or thirsty, thereby, pressed to make a step to have that need or urge fulfilled. The customers could also be motivated by an advertisement in the local daily or television making them aware of, and attracted by, the product and service offered.
The customer has to find more information on the product where they try to ask friends and look across other sources such as the internet for trustworthy information. They may also visit the show rooms in case of automobile products. There is need for marketers to ensure that the cost of information search for the customers is affordable ensuring that customers do not have to be disappointed in their search. The customers are aware of the fact that poor information could lead to them purchasing products and services that are less likely to fulfill their utility needs and are, therefore, keen to reduce the risks involved in the purchase.
Evaluating a range of brands offering similar products
The customers have to analyze the alternative brands to determine the one that is most likely to meet their needs and expectations. A good brand is most likely to attract the interest of the customers and influence them to go ahead and make a purchase. This implies that marketers have a role to play in designing programs that give desirable information and ones that will attract the attention of a customer easily.
Making the Purchase decision
The customer shows an intention to purchase the product in mind such that when they find the product of their choice, they go ahead and make the purchase decision. This is the stage where the customer decides to go ahead and purchase the product or could opt to postpone to look for more information before making decision. There is need for marketers to look for ways through which they can influence purchase decision by providing additional incentives for their products such as warranties and other promotional aspects such as coupons.
Post purchase decision
This related to the utility derived from the products purchased such that their judgement is based on how they perceive the product. There are three post purchase scenarios that present themselves such that the consumers are either delighted, satisfied, dissatisfied or tend to experience some form of emotional alteration that make them unsure of their decision. Delighted customers are extremely happy with the product and are likely to make immediate re-purchase just like the satisfied customer. However, for the dissatisfied customers, they find no utility in the product and are unlikely to re-purchase the brand in future.
(6.2) Although the stages of the consumer buying process are typically discussed in a linear fashion, consumers do not always follow the stages in sequence. Explain why this often occurs.
It is not always that customers would adhere to the buying stages since different customers have varied shopping attitudes. The steps of triggering a needed, looking for information, evaluating various alternatives, making a purchase and following up on post purchase are not always followed. Some customers couch decide to skip the steps due to the fact that they are loyal to the brand such that they pony need to be triggered and then make the purchase. This implies that they are less interested in information search and evaluating alternatives and tend to prefer easier purchasing decisions. Other customers are more concerned on the merchandise than the products offered such that the need to look for information and evaluate alternative product are eliminated. This implies that the consumers do not have to follow the steps to enjoy the products offered and therefore make prompt purchases regardless of what others say regarding the merchandise. Complex purchase trends take a lot of time and hence could possibly force consumers to follow the purchase process since they are uncertain and therefore wish to eliminate any risks after making the purchase. Such decisions could include purchase of cars to first time consumers such that they are unsure of the type of cars to purchase and the information to rely on to make the final purchase. Such groups are therefore likely to seek for friend’s opinions, look for information across the internet and evaluate alternative car brands. However, there are purchases that require prompt decisions such as purchasing fruits and vegetables from a grocery. This implies that a customer could easily make a purchase regardless of the store from which they make the purchase and are therefore unlikely to follow the steps involved in making purchase decision.
Other factors that could lead to interference with the purchase process is the variations in culture, financial risks and emotional factors. Those that face a larger financial risks are unwilling to skip the stages and therefore tend to forego purchasing the product. Such products could include luxuries such as sport cars that drain huge among of money from the purchase decision.
(6.3) Explain the five different target marketing strategies and give examples of firms that use each one. Also, discuss how firms might approach the targeting of non-customers.
Firms have to assess the attractiveness of their markets and be able to identify the existing opportunities such that they design interventions to maximize opportunities. However, there are cases that may force a firm to decide on dropping its marketing ambitions including limited financial and physical resources, poor corporate governance structures, technological limitations and intense rivalry in the industry. The following described the various marketing strategies that could be taken by organizations:
Targeting a single segments
This happens when a firm is keen on fulfilling the needs and expectations of customers from a specific segment. As such, the firm relies on a single product line to take care of the preferences and lifestyles of individuals. Such firms include Porsche and Ray Ban that aim to improve the quality and customer satisfaction such that in the end, it is possible to meet the changing preferences of the market.
Selected targeting
Firms with multiple products capabilities often involved themselves in selected marketing such that they have a range of products that are targeted to fulfill the needs and expectations of the most attractive segments. The case of Procter and Gamble is a perfect example since the company deals in diverse products portfolios including personal care products, family acre and household products with each targeted to the segment that demands more of a particular product line from the range of products.
Marketing targeting mass customers
Large firms are able to design and implement multiple marketing programs such that with their huge capital capabilities, they are able to successfully reach out to customers across the globe. A perfect example is the Coca Cola Company that has over 200 product lines and operating across all the continents of the world. This implies that the firm undertakes to involve multiple marketing programs to reach out to the customers of each of the brands to be able to make desired profits.
Product specialization marketing strategies
The firms have single product line but wishes to reach out to various market segments such that it had to design a marketing programs capable of taking care of the interests of all consumers across the chosen segments. Littman is among the firms that have undertaken to incorporate product specializations such that it sells stethoscopes product to a number of consumers globally.
Specializing in particular markets
With the market specialization, a firm aims to rely on its experience and knowledge about a particular market to be able to reach out to customers. With the knowledge on the particular needs of customers, the firm is able to make customized marketing programs to provide solutions and products needed by the target segment. Follet Company has made significant steps in the education market by empowering the role of education globally and providing education solutions to a diverse number of consumers including schools, libraries students and lifelong learners across United States and Canada.
However, there is need to identify the fact that there is also the category of non-customers who are never bothered by the marketing interventions. The factors that lead to them becoming non customers include; their unique needs and expectations that may require personalized products, customers who have a larger number of assumptions on products, higher switching cost that limit their ability to seek alternatives and the fact that there are several alternatives that affect their decisions.
(6.4) Identify and discuss the three traditional market segmentation strategies. Include in your answer a discussion of the relative advantages and disadvantages of each strategy.
In spite of the changes in the business and marketing practices, firms are still unwilling to do away with the traditional segmentation practices. The traditional segmentation strategies have been applied for many years and are still successful. However, many segmentation approaches depend on the products, brand and the market in which a firm intends to penetrate.
Mass marketing strategies
With the mass marketing strategies, a firm is less interested in fulfilling the needs and expectations of a specific market segment hence deals with an entire market. This implies that the products are undifferentiated since the firm assume that there are no unique preferences from customers and that their needs are homogenous. With the market having similar attributes, it is possible for the firm to improve efficiency since there are less logistics in the supply chain and also marketing costs are lower. However, there are disadvantages that accompany relies on mass marketing since the firm faces the risk of loses in case rivals decide to differentiate their products and offered and satisfy unique needs of customers. The strategy could also fail in the global market where there are different cultural traits such that customers have varied needs and expectations. In case of lower barriers to entry, the firm is also forced to cope with intense completions that in turn lowers its market share.
Differentiated marketing
With the strategy, marketers rely the need to group the segments into homogenous groups such that different marketing programs are designed to fulfill the unique preferences of the segments. The differentiated marketing strategy takes two forms, that is, the multi-segment and market concentration approaches. The multi-segment approach is focused on providing a range of products to meet the needs of heterogeneous customers. On the other hand, the concentration aspects involves one large market that a firm specializes in single marketing programs. However, a limitation with the concentration technique is that the firm could be subjected to intense competition reduces its meeker share.
Niche marketing strategy
The firm focuses on a specific targeted market such that a small and well defined market is identified. The firm then relies on differentiated products to meet the needs and expectations of the market while charging higher prices for the products offered. The higher prices imply that the firm is interested in higher profits to sustain its operations such as with the case of Apple Company.
(7.1) Compare and contrast brand loyalty and brand equity, as well as how these concepts are related. Must a brand possess high brand loyalty in order to possess high brand equity? Explain.
Brand loyalty refers to the situation where the customers are receptive towards a particular brand such that they are willing to choose the products over competitors. Brand loyalty takes various forms including brand insistence, preference and recognition. Recognition of a brand implies that the consumers are aware of existence of a product brand among alternatives and hence could possibly choose the product over rivals. Brand preference refers to the situation where the customers prefer products over those offered by competitors and are willing to purchase the brand whenever available at the retail stores. There is also another category that includes brand insistence such that customers are unwilling to subscribe to competitors products and would rather spend a lot of time looking for their favorite brand.
Brand equity on the other hand is more concerned with the value attached to the brand such that organizations measure their success by the market and financial values achieved. Financial and market value is brought about by customers being loyal to the company’s brand and the ability of the firm to improve its brand awareness. Customers who are comfortable with the brand are able to make a purchase that in turn improves the value of a firm.
Nevertheless, it is unlikely that a firm could improve its brand equity without talking into consideration brand loyalty. This implies that brand equity is dependent on brand loyalty such as insistence that makes customers to make repeated purchases while influencing more potential customers to embrace the products of the firm.
(7.2) Discuss the benefits associated with offering a large portfolio of products. What are some of the key issues involved in managing the product portfolio?
In spite of the complexities and cost associated with large portfolio of products, there are several advantages linked to large product portfolios.
Ability to utilize Economies of scale
With economies of scale, a firm is able to enjoy incentives such as discounts from bulk purchasing and reduce the cost of promotion. Since the firm is able to acquire discounts, it then means that it could decide to offer products at lower prices and prevent other firms from entering the industry. a case of the companies that rely on economies of scale include Maxwell House where customers are encouraged to enhance their shopping experience to the last drop since it is possible for customers to make large purchases.
Uniformity in the products offered
Customers prefer outlets that make them easily locate and make them purchase such that with larger portfolios, customers are assured of the same look and feel from the products offered. With easy location, it is possible for the customers to be satisfied with the products offered such that customers are able to make repeated purchases. Duracell is a key example of products that offer the same look for customers through its copper look therefore improving customers’ ability to identify it.
Advantage of standardization
With same comment parts sued for the products, it is possible to enhance inventory control measures such that the handling cost and manufacturing costs are significantly reduced. Toyota is among the firms that rely on standardized components such as the chassis and engine components that increase operating efficiencies.
Customers are assured of similar quality of the products offered such that they are able to save on the shopping time and are keen on making frequent purchases for the products well known to them. However, there is need for firms to consider the fact that customers preferences keep changing and hence there is need to improve the appealing nature of the stores and the products offered. This implies that the chains should be carefully managed and modified according to the needs and expectations of the customers. Store managers also need to be concerned with the fact that products could be rendered obsolete thereby limiting ability of the firm to improve its brand equity.
(7.3) Why is the product life cycle an important consideration in selecting and developing a marketing strategy? What are the core differences among the PLC stages that force marketers to alter their marketing programs over time?
The product life cycle is a key concept firms have to utilize in planning on how to penetrate and sustain market share. Products undergo four stages that include; innovation and development, introduction into the market, growth in the market, maturity such that it reaches the peak of its sales and the decline stage. The development stage is where the firm decides to come up with a prototypes that will used to determine customers reactions, in the development phase, there are no sales made with the company focused on the needs and expectations of the customers. This implies that there is brainstorming on the features to include in the product, the potential use of the product, its feasibility in terms of returns on investment and ability to attract many customers.
Introduction of the product in the market
The product is introduced into the market such that its acceptance leads to sales revenues. The firms need to be focused on the pricing strategies and the channels to be relied upon to improve visibility of the product in the market. The firm aims at developing its supply chain efficiencies to ensure that products reach customers in the desired way.
Growth of sales
Increased sales ae experienced with the firm concentering on sustaining the sales. An upward sales trend shows that the product is largely accepted and that the firm is likely to achieve sales to recoup its investment costs. However, there is need for the firm to consider various strategies to be able to achieve their profits. Such measures include the need to enhance repeated purchases through building a strong band and utilizing appropriate market positioning strategies including use of differentiation and cost leadership strategies to be able to acquire a large market share
Product maturity stage
Sales reach their peak and less firms are attracted into the market. This implies that the market is saturated and hence unable to attract significant sales increase. Firms need to look into ways to expand its customer base by stealing the market share through discounts and lower prices such that customers are easily attracted to the firm.
The decline stage
Sales are no longer growing with the products causing reduced brand equity for the company. This then implies that there is need for the management to re-consider better ways to improve product positioning by adding extra features to the products and removing features that seem to be boring for the consumers. The firm has to be innovative at the decline stage to be able to restore the appealing nature of the product.
The product life cycle create a situation where managers need to collaborate with every department and the customers to ensure that everyone stays focused on the need to provide necessary information for improvement of the product.
(7.4) Identify the unique characteristics of services (relative to tangible goods) and list the marketing challenges created by each characteristic.
Services offered by businesses are unique but prone to challenges as outlined below:
Heterogeneity of services
Services vary depending on the place, time and the people targeted thereby suggesting a heterogeneous nature.
There is limited chances of standardizing services due to the varied applications of services.
Services could be customized under special cases where customers are keen on the particular services offered by staff.
Obsolete nature of services
Services cannot be stored for future use since it is impossible to eek services in inventory form.
During the peak seasons, the demand for services I higher but in the off peak seasons, the management is forced to watch as the service equipment lie idle at the firms premises.
Production and consumption of services
The customers have to be present during production and consumption
Service employees need to have the desired competence and skill levels since their interaction with customer affect the long term relationship of customers with the firm.
Services are difficult to distribute hence the need for clients to be present during delivery.
Customers are able to influence the services offered by being open on the effectiveness of the services offered.
Services are intangible
Firms find it hard to promote services since it involves selling a promise that needs to be delivered first so that customers can them make informed judgment on quality of services.
It is hard to set prices for services due to limited standards of measures for services offered.
Customers cannot assume material possession of a services considering it cannot be felt by hand.
