Creating and Delivering Value
Man is guided by the idea of utility in his purchase decisions. He will select a product that offers him the maximum utility for the money he parts with. More often the buyer seeks much more to utility. He seeks VALUE
* All buyers seek Value in all their purchases and they look for it in the form of benefits.
* Customer compares the Total Cost & Value of all competitors’ offers before he takes a decision.
* Marketing is out & out a value game.
* Customer Value is the composite of tangible values as well as intangible values.
* The two categories not mutually exclusive; they overlap and blend
* Intangible values are equally vital as ...view middle of the document...
Consumer preferences seen in the environment:
* Fad – unpredictable, short-lived consumer preferences (about 6 months) which does not have much social, economic and political significance. A company can cash in on a fad but requires luck and timing.
* Trend – It is more predictable and lasting than a fad. Consumer preferences/environmental influences that are present in the market for about 2 to 5 years influencing purchases are called a trend. E.g Selfie.
* Megatrend – A large, social, economic, political, change that is slow to form and once in place affects consumer behavior for a long period is called Megatrend.
Activity – locate a fad, trend and a megatrend among college students which can be the basis for a successful business proposition in our college campus
The Macro-Environmental factors that affect business are:
PESTLE – Political, Economic, Social, Technological, Legal and Environmental (Natural environment)
Population, Demographics, society and culture
Type of Economy, GDP, GNP, Inflation rate, Exchange rate, interest rate, income distribution, purchasing power parity etc
Intellectual property rights – China
Government Regulations and restrictions
Business and advertising restrictions
Special interest groups and Consumer groups – Johnson and Johnson faced the ire of consumers because of presence of carcinogen substances (The chemicals in question are 1, 4-dioxane and a substance called quaternium-15 that releases formaldehyde. The first chemical, 1,4-dioxane is considered a likely carcinogen, while the second chemical, quaternium-15, kills bacteria by releasing formaldehyde — a known human carcinogen.)
Digital revolution has created an information age. The industrial age was characterized by mass production & consumption, high inventory, rampant advertising and high discounting. The information age promises accurate level of production, targeted advertising (contextual advertising based on browsing history) & rational pricing.