Unit5:Consumer Behavior & Competition Name:______

Unit5:Consumer Behavior & Competition Name:______

Marketing Education

DIRECTIONS: Complete the following outline during the class discussion.

What Will You Learn?

Why an understanding of consumer behavior is important to marketing.

How buyers are motivated to make purchases.

Why competition is important and how business competes for customers.

How markets are segmented and why this is important to marketing.

I. Understanding Consumer Behavior

A. ______is the study of consumers and how they make decisions.

B. The Steps of the Consumer Decision-Making Process:

1. Problem Recognition – always begins with this step

2. Information Search

3. Evaluation of Alternatives

4. Purchase

5. Post-Purchase Evaluation

C. Why Study Consumer Behavior? Understanding ______behavior will help marketers make sure their products and services match customer needs.

D. Needs And Wants

1. The primary focus of the business should be on the customer’s ______and ______. Remember the marketing concept?

2. A ______is an unfulfilled desire. Products purchased to satisfy a want are not essential for living, but needed to maintain a certain lifestyle.

3. A ______want is a desire that cannot be satisfied with a purchase. An example of a non-economic want is friendship.

4. A ______is anything you require to live. Food, clothing, shelter, and water are considered needs.

E. Discretionary Income Vs. Disposable Income

1. ______income is the amount of income left after paying basic living expenses and taxes.

2. ______income is the amount of income left after paying taxes, it is available for saving and spending.

3. Wants are purchased with discretionary income.

4. Needs are purchased with disposable income.

F. Maslow’s Hierarchy of Needs

1. ______was an American physiologist who studied needs and determined that people satisfy their needs in a rank order (known as a hierarchy) with lower level needs being satisfied first.

2. Maslow said that people are on ______levels of his hierarchy. Some people feel safety needs as more important to them, than social or esteem needs.

3. The Steps of Maslow’s Hierarchy of Needs:

a. Physiological Needs: ______

b. Security Needs: ______

c. Social Needs: ______

d. Esteem Needs: ______

e.Self-Actualization Needs: ______

G. Cultural and Social Environment

1. Culture is the history, beliefs, customs, and traditions of a group.

2. A reference group is a group of people or an organization that an individual admires, identifies with, and wants to be part of.

3. ______is the history, beliefs, customs, and traditions of a group.

4. A ______is a group of people or an organization that an individual admires, identifies with, and wants to be part of.

5. Your reference group has an important influence on much of your behavior and image

II. Buyer Motivation

A. ______is the set of positive or negative factors that direct individual behavior. All of our actions are influenced by motivation.

B. ______are the reasons that customers buy.

1. ______motives are reasons to purchase based on feelings, beliefs, or attitudes.

2. ______motives are reasons to buy based on facts or logic.

3. ______motives are based on loyalty to a particular company or brand.

C. ______reasons for buying are based on logic or facts.

1. Includes factors such as saving ______or obtaining the highest quality or greatest value.

2. Virtually ______buyers have a combination of rational and emotional motive.

E. If you shop in the same store time after time, your motivation for choosing the business is a ______motive – loyalty.

III. The Importance of Competition

A. ______is defined as the rivalry among business for customers.Competition is also defined as the term that encompasses the notion of individuals and firms striving for a greater share of a market to sell or buy.

B. The Benefits of Competition

1. Competition forces businesses to offer reasonable ______for the products and services that consumers use.

2. Competition encourages ______in products with the addition of unique features and benefits.

3. Businesses are always looking for ______and improved products to beat their competition.

4. Competition offers consumers the benefit of a wide ______of products from which to choose.

C. Price and Non-Price Competition

1. ______competition is a rivalry among businesses on the basis of price and value.

2. ______competition occurs when businesses decide to emphasize factors of their marketing mix other than price.

D. Direct and Indirect Competition

1. ______competition occurs with businesses that offer the same type of product or service.

2. ______competition occurs when a business competes with other companies offering products that are not in the same category but satisfy a similar need.

E. Monopolies

1. A ______is a type of market in which there is only one supplier offering a unique product.

2. Some ______monopolies are allowed to exist because it would not make sense to have more than one provider of that product or service.

F. ______cofounded Microsoft, with Paul Allen. He is ranked by Forbes magazine as the wealthiest man in the world with a net worth of over $55 billion. Who is his BIGGEST competitor?

G. ______is an entrepreneur and founder of the Oracle Corporation, a major software company. He is listed on the Forbes list of billionaires as the fourth richest person in the world. He has been described as the MOST competitive man in the world.

IV. Markets Can Be Segmented

A. ______is the process of dividing a large group of consumers into subgroups based on specific characteristics and common needs.

B. A ______is a group of individuals or organizations within a larger market that share one or more important characteristics.

C. Market Segmentation Categories:

1. ______market segmentation is based on the concept that people who live in the same geographic area might have the same needs and wants.

2. ______market segmentation consists of dividing the market based on age, gender, race, income level, ethnicity, educational attainment level, or religious affiliation.

3. ______market segmentation is based on people’s interests and values.This is directly related to lifestyles and social interests.

D. Born between 1980 and 2005, this generation is known as ______.

This generation accounts for 14% of the population of the United States.

V. Mass Marketing Vs. Market Segmentation

A. ______marketing directs a company’s marketing mix at a large and heterogeneous group of customers.

1. With mass marketing, ______is considered to be a potential customer.

2. However, ______products are sold using market segmentation.

3. Companies that practice the marketing concept will use market segmentation.

B. A ______is an identified market with excellent potential based on careful research.

1. ______is the total revenue that can be obtained from the market segment.

2. Target markets should be selected from the segments that have the ______potential.

3. ______Companies tend to use Mass Marketing.

4. Soft drinks tend to be Mass Marketed.

5. Soft drink companies also use Market Segmentation.

6. The Coca-Cola Company offers more than 3,000 different products in over 200 countries.

C. Target Marketing

1. A ______is a clearly defined segment of the market which a business or non-profit organization wants to appeal to.

2. The target market is a group of customers with very ______needs to whom the company can sell its products.

3. The product can be associated with a ______or type of user of the product.

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