Marketing Chapter 6 Homework Products Used Everyday Business Operations That Are

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LEARNING OBJECTIVES

LO 6-2 Consider the role of personal and psychological factors in consumer decision making.

LO 6-4 Understand the consumer decision-making process.

LO 6-6 Understand the critical role of the buying center and each participant in the B2B

process.

LO 6-8 Comprehend the role of technology in business markets.

CHAPTER OUTLINE

I. THE POWER OF THE CONSUMER

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A. Personal Characteristics

i. Life Cycle Stage (Age)

ii. Occupation

C. Psychological Attributes

i. Motivation

ii. Attitude

iii. Perception

a. Selective Awareness

b. Selective Distortion

c. Selective Retention

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iv. Learning

v. Personality

II. EXTERNAL FACTORS SHAPE CONSUMER

CHOICES

A. Cultural Factors

B. Situational Factors

i. Physical Surroundings

ii. Personal Circumstances

iii. Time

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III. THE LEVEL OF INVOLVEMENT INFLUENCES THE

PROCESS

A. Decision Making with High Involvement

IV. THE CONSUMER DECISION MAKING PROCESS

A. Problem Recognition

B. Search for Information

i. Information Sources

ii. Defining the Set of Alternatives

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C. Evaluation of Alternatives

i. Emotional Choice

D. Product Choice Decisions

E. Post Purchase Assessment

i. Dissonance

V. ORGANIZATIONAL BUYING: MARKETING TO A

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BUSINESS

VI. DIFFERENCES BETWEEN BUSINESS AND

CONSUMER MARKETS

A. Relationship with Customers

F. Demand for Products and Services is Different in a

Business Market

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VII. BUYING SITUATIONS

A. Straight Rebuy

VIII. BUYING CENTERS

A. Members of the Buying Center

i. User

ii. Initiators

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B. Pursuing the Buying Center

IX. THE PLAYERS IN BUSINESS TO BUSINESS

MARKETS

X. THE BUSINESS MARKET PURCHASE DECISION

PROCESS

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A. Problem Recognition

B. Define the Need and Product Specifications

C. Search for Suppliers

D. Seek Sales proposals in Response to RFP

E. Make the Purchase Decision

i. Product Selection

i. Financial Criteria

ii. Value Criteria

iii. Service Criteria

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iv. Supplier Choice

v. Personal and Organizational Factors

XI. THE ROLE OF TECHNOLOGY IN BUSINESS

MARKETS

A. E-Procurement

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KEY TERMS

demographics The characteristics of human populations and population segments, especially

perception A system to select, organize, and interpret information to create a useful, informative

picture of the world.

selective awareness A psychological tool an individual uses to help focus on what is relevant

and eliminate what is not relevant.

selective distortion The process in which an individual can misunderstand information or make

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personality An individual’s set of unique personal qualities that produce distinctive responses

across similar situations.

household life cycle (HLC) A structured set of chronological activities a particular household

follows over time.

social class A ranking of individuals into harmonized groups based on demographic

characteristics such as age, education, income, and occupation.

aspirational purchases Products bought outside the individual’s social standing.

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involvement A significant outcome of an individual’s motivation that mediates the product

choice decision. It is activated by three elements: background and psychological profile,

extensive information search When a consumer makes a purchase decision based on a thorough

process of investigation and research

limited information search When a consumer makes a purchase decision based on incomplete

information and/or lack of personal knowledge

internal information search All information stored in memory and accessed by the individual

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attribute-based choice A product choice based on the premise that product choices are made by

comparing brands across a defined set of attributes.

integration among its members.

product demand Demand within business markets affected by three critical dimensions: derived

demand, fluctuating demand, and inelastic demand

derived demand Demand that originates from the demand for consumer products in business-to–

consumer markets.

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buying center A number of individuals with a stake in a purchase decision who manage the

purchase decision process and ultimately make the decision.

States, Canada, and Mexico that classifies companies on the basis of their primary output to

define and segment business markets.

original equipment manufacturer (OEM) Manufacturing firms that sell products that are used

as integral manufacturing components by their customer companies.

end-user purchases A category of products purchased by manufacturers that represents the

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product choice The first decision made in the purchase decision process that is usually based on

a single criterion

supplier choice Selecting between multiple suppliers offering similar product configurations by

examining their qualifications.

reliability The percentage of time a product works without failure or stoppage.

APPLICATION QUESTIONS

1. As we have discussed, understanding the consumers in a target market is critical to creating

an effective value proposition. Assume you are the Vice President of Marketing for Regal

Cinemas. What do you think is the demographic profile (including the age, income, and life

cycle stage) of your largest target market? As part of a mini-market research project, visit a

movie theatre on a weekend and track the people entering. How old are they? Are they

families or people meeting friends?

2. You are the marketing manager for the Bowflex Revolution Home Gym. You believe the

product appeals to both men and women. As you develop the marketing strategy, what

differences might you consider in the product based on whether a man or woman is buying?

What about the marketing communications (message, choice of media)?

Men and women may differ in the type of “work–out” they prefer and therefore the “work–

out” programs available may differ. Men and women may differ in the style of the actual

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In addition, women and men both read magazines but the kinds of magazines they read vary

greatly, so marketers place ads in different magazines to reach both groups. Men prefer

automotive and sports magazines while women choose health and epicurean magazines.

3. You are the marketing manager for Lenovo laptop computers. Identify and briefly discuss

the differences between the consumer market for laptops and the business market. Then give

an example of each difference using college students as the consumer market and defense

related companies as the business market.

B2B Market

Consumer Market

Relationship

with Customers

Invest more in maintaining

personal relationships

Impersonal; exists through

electronic communication

Number and Size

of Customers

Few but larger customers

More customers but buy in smaller,

less frequent quantities

Geographic

Concentration

Suppliers located strategically near

the buyers

Could be anywhere in the world

4. You work for Siemens Power Generations systems and are responsible for the sale of large,

expensive ($2 million to $5 million) turbine generators to power utility companies. You

have been contacted by the Ever-Sure Utility Corporation in Any Town, USA. Identify the

buying center you are likely to find inside the company and how you would market the

generators to the buying center group.

You are likely to find every traditional role in the buying center, including:

Users – Actual consumers of the product

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Decider – Person(s) responsible for making final decision

MANAGEMENT DECISION CASE

Taking the Nike Experience Direct to Consumers

As described in the case, Nike is facing competitors (e.g. Under Armor) who are changing their

distribution strategies from B2B to B2C. Nike has traditionally been a B2B company when it

comes to distribution. Though it is not without experience in B2C distribution, it lacks the scale

Questions for Consideration

1. This chapter highlights how marketing efforts are different for B2B and B2C firms. As Nike,

and other manufacturers, continue to expand into B2C channels, what are some differences in

B2C and B2B behavior that might affect Nike’s approach to these channels?

There are many considerations and actions in marketing that are different in B2C and B2B

markets. Nike, moving more toward B2C, will face a few of these:

Purchases in B2C are usually in small quantities and for individual consumption with the

decision to buy usually the actual consumer of the product. In B2B the quantities are

much larger (hundreds to thousands of times larger) and the end-consumer is not the

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2. What are some hurdles Nike may face as it expands its B2C business? Consider this question

both internally, with new skills Nike needs to amass, and externally, with challenges it may

face from its B2B channel partners.

Nike was selected for this case because of its interesting and complex business environment.

As the case notes, nearly all of Nike’s distribution is through a traditional B2B channels

(manufacturer to distributors to retail to consumers) and Nike owns very few direct-to-retail

outlets. Therefore, internally, Nike has less experience with managing direct retail than say,

Starbucks, and will need to acquire those skills, very likely by hiring experienced retail

3. What would be some negative consequences to consumers if all manufacturers sold only

B2C and eliminated wholesaler distributors who supply retail stores?

Since retail stores that are not owned by the manufacture are not exclusive to the

manufacturer, consumers can visit a store (e.g., Foot Locker) and find a variety of brands.

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shopping for a category of product (athletic shoes) in one place and advice that is, or at least

appears to be, unbiased toward a given brand.

Imagine having to visit four shops to compare the top brands of shoes you were interested in.