FHCE 3100 Lecture 9Outline of Last Lecture I. Ch.6 IntroCurrent Lecture Information and Types of Goods  Search—stores will cluster to lower consumers’ information search costs Ex) Wendy’s next to Chik Fil A  Experience—cents off coupons, taste tests and previews are intended to lower search costs  Ex) Kroger card Credence—the government helps consumers by policing credence goods more than others, e.g. Licensing of service providers, drug regulation Passive Information Encountered when one is doing something else Banner ads, billboards, and ads on bathroom doors (ex. Stall St. Journal)  Actively Acquired information Information sought for its own sake  Test driving a car, internet search, reading literature, asking friends 3. Evaluating Alternatives  Based on information search, the person weighs alternatives  Likes/dislikes, price, availability, service  Evaluation procedure depends on the consumer and the buying situation  Most buyers evaluate multiple attributes each of which is weighed differently  At the end of the evaluation stage, purchase intentions are formed  4. Selecting Two factors intercede between purchase intentions and the actual decision:  Attitudes of others  Unexpected situational factors  5. Buying  Ultimately a choice is made to “purchase,” including where, when, and how  Timing matters (ex. Post holiday sale) Pay cash or credit for goodsThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute. 6. Evaluating Post Purchase how a consumer feels after the purchase is very important since “post purchase feelings” can stimulate brand loyalty, repurchases, and “word of mouth advertising”  Post Purchase satisfaction  Consumer satisfaction is a function of consumer expectations and perceived product performance  Performance < Expectations = disappointment  Performance = Expectations = satisfactory  Performance > Expectations = diligent  Satisfaction is important: Delighted consumers engage in positive word of mouth  Unhappy customers on average tell 11 people It costs more to attract a new customer than it does to retain an existing customer  Cognitive is common Dissonance is buyer’s remorse Motivation of marketers  Maximize consumer awareness Maximize consumption Maximize loyalty Maximize consumer satisfaction  Successful strategies: tools and techniques All marketing strategies have the goal of creating a sustainable competitive advantage for a firm (long term)  An advantage where other companies cannot provide the same offering or value  The marketing environment Competitive Political-legal Economic Technological  Social-cultural  Competitive market  Even if you know what the customers want and have the resources to meet the demands, it may be that the competitive environment means that it is not worth pursuing particular parts of the market for a whole range of strategic reasons, such as the threat or price war or legal or ethical considerations Ex) Blockbuster to Red Box  Competitive market analysis: 5 forces Power of buyers Power of suppliers Threat of substitutes Barriers to entry Competitors The idea is that change in your market is likely to come as the basis of one of these five areas  Political-Legal Legal environment… Concern for targeting consumers (children) Product safety issues Concern for really good patents- Generally 20 years- *Iowa state 1st computer—lost patent in WWII Economic  Interest rates, unemployment rates, inflation rates If the economy is heading into a recession will you see an increase or decrease in the marketing of expensive cars? Technology  Influences both to whom we target our marketing strategies, and also how we target ourproducts  Sociocultural influences on marketing strategies Culture and subculture Ex. Mexican food isle  Family characteristics affecting consumer behavior  Heterosexual families and gay/lesbian families Book launched a minor industry in providing books for the children of gay and lesbian parents  “Heather Has Two Mommies”  Products for gay/lesbian population In 1998, Surrey, BC Kindergarten teacher James Chamberlain attempted to read the storybooks “Asha’s Mums” and “One Dad, Two Dads, Brown Dad, Blue Dads” to his class The Surrey Board of Education banned the books citing “grammatical” failings as the reason  The Surrey Board of Education pursued the ban all the way up to the Supreme Court of Canada, where they lost their case Surrey School Board financially liable for all court costs, which totaled at $1.2 million  Ex. Uncle Tom’s Cabin by Harriet Beecher Elements of a Marketing Strategy  Blending the four strategy elements of marketing decision-making to satisfy chosen target markets 1. Product, 2. Price, 3. Distribution, 4. Promotion 1. Product Strategy what goods or services to offer, customer service, package design, brand names, warranties, product life cycle, positioning 2. Price strategy Deals with the methods of setting profitable and justifiable prices  Goal is to get to the equilibrium