3 Flashcards
model of consumer behaviour
stimuli –> black box –> buyers response
stimuli –> Black box
-inside the buyers mind
- called the black box because we are trying to make a well-informed guess as to how consumers are making decisions
what we can observe are the external stimulants. e.g…
- core marketing activities (created by marketers) used to devise a product offering and bring a product to the market. (e.g. product, price, place, promotion)
- the external environment, created by forces outside the company e.g. competition (all the things that shape the context in which the product is offered) (PESTLE, 5Cs, Porters 5 forces)
so… we understand all of this, but what we dont understand is how the consumer is making sense of all this, and what they are being influenced by to make their decisions.
what we can OBSERVE, is weather or not they do choose to buy a product, and how frequently they do it/how loyal they are to a particular brand ( we can observe their feedback, their reviews) we just cant analyse how they think. thats why its called a black box
characteristics that shape consumer behaviour: culture, social class, social factors, personal factors, and psychological factors
decision making process ( part of black box)
1) need recognition: triggered by a discrepancy between our current state of being and our ideal state of being.
information searched: e.g. asking for recommendations.
3) evaluation of alternatives
40 purchase decision
5) post purchase behaviour
the BCG matrix
strategic management tool used in marketing to analyze and categorize a company’s product portfolio based on two key dimensions: market growth rate and market share. It was developed by the Boston Consulting Group in the early 1970s.
The matrix consists of four quadrants, each representing a different category of products:
Stars (High Market Share, High Market Growth):
Products in this category have a high market share in a rapidly growing market.
These products typically require significant investment to maintain and expand their market position.
As the market continues to grow, stars have the potential to become cash cows.
Question Marks or Problem Children (Low Market Share, High Market Growth):
Products in this category have a low market share in a rapidly growing market.
They may require substantial investment to increase their market share and become stars or may be considered for divestment if growth prospects are not favorable.
Cash Cows (High Market Share, Low Market Growth):
Products in this category have a high market share in a market with slow growth.
They generate a steady stream of income but may not require significant investment.
Companies can use the cash generated by cash cows to invest in other areas of their business.
Dogs (Low Market Share, Low Market Growth):
Products in this category have a low market share in a slow-growing market.
They may not be generating significant profits and might not have strong growth prospects.
Companies often need to decide whether to invest resources to improve the product’s position or consider divestment.
Companies can use the BCG matrix to make strategic decisions about resource allocation, investment priorities, and overall portfolio management. The goal is to balance the product portfolio to ensure a healthy mix of products with different growth and profitability characteristics. Keep in mind that while the BCG matrix is a valuable tool, it has limitations, and its applicability may vary across different industries and market conditions.
reasons why consumers could be considered irrational
taking a marketin perspective, consumers are viewd as being irrational because they make decisions based on factors apart from logical thoghy (e.g. beliefs, emotions)
e.g. conumers often become loyal to brands based on beliefs rather than opinions( thoughs shaped by moral and cultural reasons, not facts)
e.g. consumers may be driven to keep purchasing (online or offline) because it can create feelings of happiness (emotion driven)
two reasons why consumers could be considered rational
consumers may be decision-makers most of the time, but are incrssingly exposed to more access to information, this leads to consumers becoming more aware of companie’s supply chains, labour use, sustainability, data privicy policies etc.
many consumers are finding such reasons to be an additional factor that determines how they choose amongst alternatives on the market
e.g. minimalism is a response to consumerism, but this still involves forms of consumption
e.g. farmers markets are “greener” indipendent stores are rising in popularity in response to environmental concerns. but Amazon is still one of t he biggest brands in the world.
intensive distribution
a distribution strategy in marketing that involves making a product available in as many outlets as possible. The goal is to maximize the product’s exposure and availability to reach a broad and diverse consumer base. This strategy is particularly suitable for products with mass appeal and low purchasing reluctance
intensive distribution key characteristics
Key characteristics of intensive distribution strategies include:
Wide Availability: Products are distributed through a large number of channels, including supermarkets, convenience stores, online retailers, and more. The focus is on reaching as many outlets as possible.
Convenience: The strategy aims to provide consumers with convenience by making the product available in various locations, reducing the effort required to find and purchase the product.
e.g.soft drinks, snacks, newspapaers
selective distribution strategy
another distribution strategy in marketing, but in this case, a limited number of retailers or outlets are chosen to distribute a product. Unlike intensive distribution, which aims for maximum market coverage, selective distribution involves carefully selecting specific distribution channels or retailers based on certain criteria.
Key characteristics of selective distribution strategies include:
Limited Number of Outlets: Instead of being available in as many outlets as possible, the product is distributed through a selected and limited number of retailers or channels.
Criteria-Based Selection: Retailers are chosen based on specific criteria such as their reputation, expertise, service capabilities, or the ability to provide a suitable environment for the product.
e.g. mid range cars, puma, nike
exclusive distribution
a distribution strategy in which a manufacturer or supplier grants exclusive rights to a limited number of resellers or distributors to sell its products within a particular geographical area.
key features of exclusive distribution strategies include:
Limited Number of Distributors: The manufacturer selects only a small, exclusive group of distributors or retailers to carry and sell its products.
Geographical Restriction: Exclusive distribution often involves restricting the authorized distributors to specific geographical areas. This can help maintain control over market presence and prevent competition among distributors.
e.g.gucci, lambourghini
differences between products and brands
1) a product sits in the retailer’s store, whereas a brand exists in the consumer’s mind
- products are the tangible and intangible attributes relating to physical goods and services, ideas, people, places, experiences…
e.g. Nike: their products include sporting goods
IN CONTRAST, brands consist of the sum of the product as well as the values, attributes, and experiences it provides its consumers e.g. their brand identity = empowerment, health encouragement…
2) consumers buy products for what it does but the brand is chosen for that it means. the product offering can be understood as consisting of 3 levels: for example, Nike often portrays their offering as providing “Accessible fitness” which can be acquired via its sporting goods and clothes, and reinforced via its add-on services such as customer care, and delivery.
3) a product can be copied or become obsolete, but brands are unique and can be timeless, for example, a competitor may attempt to sell a knockoff or copycat version of Nike trainers, and some competitor products may be indistinguishable in terms of material and manufacturing.
Also, some products may become outpaced by newer styles or innovations, rendering older products less desired, however, brands are unique and cannot be copied.
