Key Marketing Concepts: Consumer Behavior, Product Strategy, Distribution
Understanding Consumer Behavior
Individual vs. Social Factors
Individual Behavior: Directly responds to needs and purchase motivations, influenced by a set of the consumer’s internal and external factors.
Social Influence: Refers to group influence on the purchase decision process.
Client Roles in Decision Making
- Prescriber: A professional or individual who recommends the product; their opinion is valued.
- Buyer: The person who decides to buy the product.
- Payer: The one who spends the money and pays for the purchase.
- Consumer/User: The person who uses the product.
Understanding Purchase Habits
Key questions to ask: Who is buying? What are they buying? Why are they buying?
Market Research
An objective process to obtain relevant and reliable information, enabling marketing managers to make strategic planning decisions with minimal risk.
Process Steps:
- Define objectives
- Design the research plan
- Identify information sources
- Collect data
- Analyze data
Product Fundamentals in Marketing
Product Definition
A product is any good or service that has value to consumers or users.
Types of Products
- Goods: Physical items that can be stored (e.g., clothes).
- Services: Functions performed for a particular purpose (e.g., care provided in a hospital).
Product Classifications
Consumer Products
Products purchased by end consumers.
- Durable Products: Last over time (e.g., a car).
- Consumable Products: Intended for direct consumption (e.g., food items).
Industrial Products
Products purchased by companies for further processing or use in their operations.
- Raw Materials: Unprocessed materials the company incorporates into its production process (e.g., wood for furniture manufacturing).
- Components: Elements with some degree of processing that become part of a larger system (e.g., DVD drives).
- Production Equipment: Machinery used in production (e.g., a turbine).
Branding, Packaging, and Labeling
Brand
A brand is the name, symbol, or design used to distinguish a particular product in the market. For the consumer, it provides information about product quality, warranty, etc.
Packaging
The packaging is the container made of various materials used to contain, protect, handle, distribute, and present products during distribution and sale.
Label
The label is a clearly visible identification element providing relevant information about the characteristics, handling, and use of a product.
Product Lifecycle Stages
A product typically passes through stages of birth, growth, maturity, and decline. The four phases are:
- Introduction: Products are often in a testing phase because people need to try them.
- Growth: The product becomes known, and competitors may appear, potentially offering improvements.
- Maturity: Everyone knows the brand; the company may focus on advertising and lower prices.
- Decline: The company significantly reduces advertising and no longer spends much money on the product because demand has fallen.
Marketing Distribution Channels and Strategies
Distribution Definition
Distribution connects the producing company with the consumer.
Phases of the Distribution Process
- Collecting customer orders
- Transporting products to the point of sale
- Providing sales service
Distribution Channel
The distribution channel consists of the set of intermediaries involved in getting the product to the consumer.
Distribution Strategies
- Pull Strategy: Aims to make consumers ask for the product, often achieved through advertising, thus pulling it through the distribution channel.
- Push Strategy: Focuses on intermediaries pushing the product towards the consumer, meaning a consumer might encounter the product (e.g., due to good positioning) without the initial need or intent to buy it.
Role of Intermediaries
An intermediary (or broker/agent) is an entity that is neither the producer of goods or services nor the final consumer. Channels often involve one or more intermediaries.
Intermediaries exist because they cover different functions:
- Physical distribution of the product
- Increasing the variety of products available
- Ensuring sales for producers
- Gathering information about the end consumer