Consumer Buying process 1) Problem need/Recognition = (Ex. Need to replace old shoes) 2)Informational Seeking= (Ex. Search for stores, styles, prices, opinions ) 3)Evaluation of Alternatives= Which are comfortable? *4)Purchase Decision(Chose rationality or emotionality) 5) Post-purchase Evaluation= (Observe reaction of the consumer) Categories of consumer Products 1) Convenience goods and services= • Consumed rapidly and regularly • Inexpensive • Purchase often and with little input of time and effort o Milk o Newspaper 2)Shopping goods and services= • Purchase less often • More expensive • Consumers may shop around and compare products based on style, performance, color. o Television set o Tires o Car insurance 3)Specialty goods and services= • Purchased infrequently • Expensive • Costumers decides ona precise product and will not accept substitutions and spends a good • Wedding dress= man selling his ex wife dress, for marines tickets and beer Product Life Cycle Series of the stages in a product’s commercial • Introduction stage= making consumers aware of new product • Growth=Sell begin and profit. • Maturity=Competition gets heavy (in the peak of profit) • Decline= you don’t see the product any more(DVD) Branding • Process of using symbols to communicate the qualities of a product made by a particular producer = m= m&m Next Chapter **Price skimming • Setting an initially high price to cover new product cost and generate a profit o Breast feeding baby doll= magic of motherhood **Penetration Price • Setting an initial low price to establish a new product in the market Dynamic pricing- • a variable o Ex= Women in Dubai buys a car really cheap -Price Tactics- Price Lining • Setting a limiting number of prices for certain categories of products ( Everything a cheaper price) Psychological Pricing • Consumers do not always respond rationally to prices(I deserve them) Distribution Mix • Combination • ****How do you ship it?*** o By truck= low breakage, less packing, good for short distances o By railroad= piggback, multiple car on train going to dealership o Water slowest/cheapest o Plane= most expensive=a quick ”get shrimp from the coast to N. Dakota” o Pipeline= an affective by weather *Promotion • How does it communicate the information about the product they are selling Advertising • Paid, non-profit… • How to advertise= o Newspaper= highest capital outlay, flexible, broad coverage(main advantage) most widely used o Radio= Concert for an artist(Eminem for “Artist of the year” o Direct Mail= Mostly mailed to consumer’s house o Magazine= Highly segmented(old) Long lived, Long lead time o Outdoor advertisement= Inexpensive repeat exposure=little competition o Advocacy Advertisement= Ex. Mothers Against Drunk Driving o Television= most expensive Personal Selling • One-on-one selling= critical point is closing the deal. o Order processing, creative selling, missionary. Sales Promotions • Short –term promotional activity designed to encourage consumer buying, industrial sales, or cooperation for distributors o Coupons, etc Public relations • Company-influenced information directed at building goodwill with the public • British petroleum show employees cleaning up after the petroleum in the sea.NOTES FROM 4/2Consumer Buying process1) Problem need/Recognition = (Ex. Need to replace old shoes)2)Informational Seeking= (Ex. Search for stores, styles, prices, opinions )3)Evaluation of Alternatives= Which are comfortable?*4)Purchase Decision(Chose rationality or emotionality)5) Post-purchase Evaluation= (Observe reaction of the consumer)Categories of consumer Products1) Convenience goods and services= • Consumed rapidly and regularly• Inexpensive• Purchase often and with little input of time and efforto Milko Newspaper2)Shopping goods and services=• Purchase less often• More expensive• Consumers may shop around and compare products based on style, performance, color.o Television seto Tireso Car insurance3)Specialty goods and services=• Purchased infrequently• Expensive• Costumers decides ona precise product and will not accept substitutions and spends a good • Wedding dress= man selling his ex wife dress, for marines tickets and beerProduct Life CycleSeries of the stages in a product’s commercial• Introduction stage= making consumers aware of new product• Growth=Sell begin and profit.• Maturity=Competition gets heavy (in the peak of profit)• Decline= you don’t see the product any more(DVD)Branding• Process of using symbols to communicate the qualities of a product made by a particular producer = m= m&mNext Chapter**Price skimming• Setting an initially high price to cover new product cost and generate aprofito Breast feeding baby doll= magic of motherhood**Penetration Price• Setting an initial low price to establish a new product in the marketDynamic pricing- • a variable o Ex= Women in Dubai buys a car really cheap-Price Tactics-Price Lining• Setting a limiting number of prices for certain categories of products ( Everything a cheaper price)Psychological Pricing• Consumers do not always respond rationally to prices(I deserve them)Distribution Mix• Combination• ****How do you ship it?***o By truck= low breakage, less packing, good for short distanceso By railroad= piggback, multiple car on train going to dealershipo Water slowest/cheapesto Plane= most expensive=a quick ”get shrimp from the
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