N4 Marketing Management Module 3

MARKETING MANAGEMENT N4 LECTURER: TF MOLIFE Intensifying learning during lockdown!!!!! Downloaded from hlayiso.com

MODULE 3 UNDERSTANDING THE MARKET Downloaded from hlayiso.com

LEARNING OUTCOMES At the end of this module you should know the following:  Define the concepts of the market. Use demographic patterns to identify the target market.  Distinguish between (Individual, Group & Economic determinants) of consumer behaviour.  Understand the factors that influence consumers’ purchasing decisions.  Comprehensively discuss Consumer Decision Making process.  Ability to discuss Acceptance Process.  Differentiate group acceptance of a new product. Downloaded from hlayiso.com  Outline consumer rights.

Defining marketing concepts Market: refers to the place where two parties (buyer & Seller) gather to facilitate the exchange of goods and services. Variable: is an object, event, idea, feeling, time period or any other category one endeavours to measure. Demography: refers to the study of the human population which encompasses the aspects of (geographic spread, population composition, Ethnicity/Race, gender, age, language, educational level, income, purchasing patterns). NB: When choosingDownloaded a target market wefrom hlayiso.com use (Demographic patterns/ aspects).

Market consist of the following:  Consumer market: Market to which consumer products are directed. ( the point of focus is on the final end-user).  Industrial, Reseller, government and international market: differs with consumer market regarding the type of the product they buy and the purpose of the purchase. Downloaded from hlayiso.com

Consumer Behaviour Consumer behaviour: refers to various processes through which consumer undergo when obtaining information about need-satisfying products and services as well as decision making process they undergo before buying takes place. Downloaded from hlayiso.com

Models of consumer Behaviour 3-Determinants of Consumer behaviour (factors influencing) INDIVIDUAL DETERMINANTS GROUP DETERMINANTS ECONOMIC DETERMINANTS  Motivation  Cultural groups  Income  Attitude  Social groups  Willingness to buy  Perception  Family  Benefits to be acquired  Learning  Reference groups  Personality  Opinion leaders  Lifestyle Downloaded from hlayiso.com

Decision making process After factors have been evaluated: Decision making process takes place and comprises of the following:  Awareness of the product  Search the information  Evaluating the alternatives  Decision on the best alternative  Action on the purchase of product/ service  Consumer reaction after the purchase. Downloaded from hlayiso.com

Individual determinants of consumer behaviour It is imperative to remember that consumer decision making does not happen in vacuum. Individual Variable/ Determinants: 1. Motivation: refers to internal driving force behind actions of a person when purposefully trying to satisfy a want or need. The relevant thoery to observe is Maslow Hierarchy of Needs (by Abraham Maslow) Downloaded from hlayiso.com

Maslow Hierarchy of needs Self Actualization Abraham Maslow Its about living in Purpose) self realisation & Development) Ego/self-Esteem/Recognition Educational, clothing, car, housing status. Social/ Sense of Belonging Love, family, Friends & relationship. Safety & Security Fencing, life policy, Medical Aid Physiological Downloaded from hlayiso.com Need for water, oxygen, food, house & clothing) Basic needs are prioritized

Other individual determinants ATTITUDE PERCEPTION LEARNING  Tendencies to act in a favourable/ Def: A process by which individual selects, Consumer Learning occurs unfavourable. organises & interpret stimuli emanates from the combination (feeling/thought) to form a meaningful of Motivation, Attention,  Attitude determine behavioural picture. Experience and repetition. patterns. Selective Perception (study description)  Here we observe whether the  Selective Exposure (1st & last Sentence) consumer will come and make  Selective Attention another purchase.  Selective Interpretation  Selective Recall Downloaded from hlayiso.com

Other individual determinants PERSONALITY LIFESTYLE PSYCHOGRAPHIC Personality Type Lifestyle is perceived as the way people it use to better understand lives. the market.  Adhering type: Wishes to move closer to other and strive for love, AIO LIFESYLE CLASSIFICATIONS acceptance & appreciation.  ACTIVITIES – Hobbies, Sports  Aggressive type: They are against  INTEREST – Media, Fashion other people and like competition.  OPINIONS – Self, Politics, Education  Detached type: They move from other people, they prefer unique staff. Downloaded from hlayiso.com

GROUP DETERMINANTS OF CONSUMER BEHAVIOUR FACTORS THAT INFLUENCE CONSUMER BEHAVIOUR CULTURE: consist of values, norms, attitude that passes FAMILY: People related by Blood from one generation to other. As thus, it influences consumer’s decisions when buying different products. Kindly learn about Family Life Cycle : Phases and Role divisions. SOCIAL CLASSES: comprises of the following: REFERENCE GROUP  Membership group: obtain membership & belong to the Upper classes group. Middle classes  Automated group: Automatically belong to the group Lower classes because of age, gender, work, interest.  Negative group: do not like to be associated. OPINION LEADER:  Associative group: group to which a person aspire to  Marketing manager pursue opinion leader because they belong. Downloaded from hlayiso.com are the crowd puller, this include sports stars, Radio or TV personalities etc.

3. ECONOMIC DETERMINANTS OF CONSUMER BEHAVIOUR Consumers are influenced by the following factors when making decisions before buying various products:  Income: is used to measure affordability.  Willingness: Consumer’s willingness to spend disposable income.  Evaluation of benefits: Consumers weigh benefits they will get from the use of product. They evaluate value for money.  Price of substitute product: The price of substitute products matter to the consumer.Downloaded from hlayiso.com

CONSUMER DECISION MAKING PROCESS (DMP) STEP1: AWARENESS OF THE NEED  Consumer become aware of the need because of stimulus (active sensory modes (hear, smell, touch, feel & see). STEP 2: SEARCH INFORMATION  Consumer search information about various products with an intention to find most need satisfying ones. STEP 3: EVALUATE ALTERNATIVES Downloaded  Consumer compare various products from and weighhlayiso.com alternatives.

(DMP) STEPS CONTINUED STEP 4: DECISION ON SOLUTION  Consumer chooses the best alternative that can satisfy the need. STEP 5: ACTION  Consumer take an action to purchase a product in order to satisfy the need. STEP 6: BEHAVIOUR AFTER THE PURCHASE  Degree to which expectations have been fulfilled is determined, Cognitive dissonance may take place if consumer is uncertain about product purchase. Downloaded from hlayiso.com

TYPES OF PURCHASING DECISIONS Routine Decision: Consumers buy products without purposeful thinking. (Sugar, tea, tissue, bread) Extended decision: the consumer go through all the decision making process. (durable products: Refrigerators, laptop, mashing machine). Limited Decision: The consumer go through all the decision making process but not paying attention on every step (Personal necessities: toothpaste, deodorant) IMPULSIVE DECISION: Consumer makes decisions without planning/ thoughtful Downloaded from hlayiso.com speaking. ( chocolate, sweets, soft-drink)

ACCEPTANCE PROCESS (AP) AWARENESS OF PRODUCT  The consumer hears of a new product but has no further information. INTEREST  The consumer gathers information about the product. EVALUATION  The consumer uses information gathered to consider buying a product. Downloaded from hlayiso.com

(AP)continued TESTING  The consumer purchase the product with an intention to try it out and to compare advantages and disadvantages. ACCEPTANCE  If the first purchase experience is up to satisfactory, the consumer will repeat the purchase Downloaded from hlayiso.com

GROUP ACCEPTORS OF NEW PRODUCTS  First acceptors: Consists of consumers who buy the product first.  Early acceptors: they purchase the product after seeing few people in possession of a particular product.  Early majority: They accept the new product before their social groups.  Late majority: They accept the product because of pressure or being afraid to be left out.  Laggards/ Delayers: This group accepts new products last. Downloaded  Non acceptors: from These group does not hlayiso.com accept the new innovation at all.

CONSUMERISM Definition: It is aimed at reconciling the rights of buyers and sellers. Eight consumer rights according (South African Consumer Union)  Right to be heard.  Right to be informed.  Right to safety.  Right to choose.  Right to redress.  Right to consumer education.  Right to healthy environment.  Right to satisfaction of basic needs. Downloaded Kindly Read Page 84 : (The role of from hlayiso.com Consumer Protection Order)