---
# System prepended metadata

title: 'Week 2 - Positioning, Buying Behaviors and Product Development'
tags: [MGT8803]

---

# Positioning, Buying Behaviors and Product Development

## 🧭 Emoji Legend (Note Formatting Guide)
<details>
<summary>🧭 Click to expand Emoji Legend</summary>

| Icon | Meaning / Use Case | Example Usage |
|:----:|--------------------|----------------|
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| 🧩 | **Main topic or section header** — introduces a major theme or concept | “## 🧩 Lean Operations - M9L1” |
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| ❓ | **Question** - used for identifying homework/assessment questions | “## ❓ Self-Assessments/Notebook Questions” |
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---

🪄 *Tip:* All of these are Unicode emojis that work natively in HackMD, GitHub, Notion, and most Markdown renderers.  
You can insert them using your OS emoji picker:  
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</details>

## 🧭 Table of Contents
[TOC]

# 🖊️ Video Lessons & Synchronous Class

## 🧩 M12L1 - Positioning Difference

**Lesson Objectives**:
* Define positioning
* Discuss the components of a positioning statement
* Describe perceptual mapping
* Define differentiation
* Discuss examples of differentiation strategies

### 🔸 Focus Market Strategy with Differentiation & Positioning

![image](https://hackmd.io/_uploads/S1XYmz91bx.png)

Differentiation & Positioning:
* Understanding customer's views
* Evaluating segment preferences
* Positioning techniques
* Differentiating the marketing mix

### 🔸 Customer Perception

**Customer Perceived Value = Customer Perceived Benefit - Customer Perceived Cost**

This simply states the basic 'formula' for how a customer views the value of a product. It can be hard to capture or quantify.

![image](https://hackmd.io/_uploads/rJk2NGqkWe.png)

In this example, you can see within the top chart that a firm has separated consumers into 3 market segments and what is viewed as important to these segments into 3 columns. With the information in hand, they can then sub-segments of the various laptop models and align their marketing efforts to provide the best options to consumers (apparently, this will be my job).

### 🔸 Positioning

++Positioning++ - an approach that refers to how customers think about proposed or present brands in a market; the image your product/service has in the minds of your target customers

**Example**:
Mercedes-Benz, what do you think of the brand and its vehicles?
* I think Mercedes are expensive turds that depreciate 25% the moment you leave the car lot
* It's imporant to recognize that perceptions are not necessarily about being right or wrong, regardless of personal experience or lackthereof
* Brands will actively pursue ways to shape consumers' perceptions

![image](https://hackmd.io/_uploads/ryOJPG9k-g.png)

Here we can see a Consumer Reports rankings of luxury vehicles where Lincoln Continental was the highest rated and Mercedes E-Class was 11th. The idea here isn't to influence our thinking, but rather to show the psychology and emotion that goes into our own opinions. 

### 🔸 Positioning Statement

A positioning statement provides a concise identification of the firm's target market, product type, points of differentiation and reasons for a consumer to buy their product. 

### 🔸 Perceptual Mapping 

![image](https://hackmd.io/_uploads/rkuduzckbl.png)

Within our example above, the numbered dots represent market segments. This analysis provides firms with the opportunity to identify these segments and attempt to create a brand/soap that fits that market.

### 🔸 Differentiation

++Differentiation++ - utilizing the marketing mix in a distinct way such that customers see it as different from the competition

**💡 Note**: There was a picture of a Bobs brand shoe that looked a lot like Toms brand. The idea there was that sometimes, physical distinctions are not always obvious.

**Differentiation Strategy Examples**
* Owning a product attribute in the mind of the customer
* Being perceived as an innovator
* Effectively maximizing user experience
* Being the first to enter a market
* Having the lowest price

---

## 🧩 M12L2 - Consumer Buying Behavior

**Lesson Objectives**
* Discuss the consumer adoption process
* Describe the key buying behavior influences
* Discuss how customer perceptions and attitudes impact marketing decisions

**Recall**:

![image](https://hackmd.io/_uploads/Sk_StQc1-l.png)

Customer are the focal point for all things marketing-oriented.

### 🔸 Adoption Process

![image](https://hackmd.io/_uploads/S1TzoQqkWg.png)

++Dissonance++ - tension caused by uncertainty about the rightness of a decision (second guessing)
* May set in after the decision
* Marketers must consider how to eliminate dissonance when marketing their product

### 🔸 Consumer Problem Solving Continuum - How do Consumers solve their problems?

![image](https://hackmd.io/_uploads/B1T_hX51Zl.png)

Low Involvement purchase examples are routine items: toilet paper, toothpaste, paper towels, etc.

High Involvement purchases involve significant information: consumer has no experience with the product and the decision and risk of making the wrong decision are highly important.

The idea here is that the decision process does not imply consumers always apply rational processes in their buying decisions nor that they will lead to a purchase.

### 🔸 Learned Consumer Behavior

All consumer behavior is learned and marketers are very interested in how they can POSITIVELY affect that learning. 

![image](https://hackmd.io/_uploads/HJLypXc1Wg.png)

Cues are the domain of the marketer - find a positive cue or image that have positive associations from other situations, relate them to the marketing mix

---

## 🧩 M12L3 - Buying Behavior Influences

**Lesson Purpose**:
* Highlight the common elements that affect consumers in the buyer journey

### 🔸 Model of Influences on Consumer Behavior

![image](https://hackmd.io/_uploads/rkaTR75k-x.png)

This model shows the various factors that influence a consumer to either make or not make a purchase.

**Economic Needs**

Economic needs are useful in determining the who, what, when, and where of consumer buying behavior but DO NOT tell the full story. As a result, marketers use behavioral sciences to consider the full range of buying influences.

A consumer's income is likely to affect their needs and marketers must consider a consumer's income after taxes and necessities.

**Emotional Drives**

There is a study referenced here by Antonio Damasio on people that had damage to the part of their brain that deals with emotions and their inability to make decisions.

![image](https://hackmd.io/_uploads/BJTXXNcJ-e.png)

Emotions also play a part in the decision making process and a marketer should consider them and how best to appeal to those emotions.

### 🔸 Physchological Influences

![image](https://hackmd.io/_uploads/BkqKm45y-e.png)

* Needs are a basic force that motivate consumers to do something (eat, drink, sleep)
* Wants are learned needs meaning needs expressed as a desire for a particular way to satisfy a need (McDonalds to satiate hunger)
* Drives are strong, internal stimulus that encourages action to reduce a need

There are levels to these needs and wants, as depicted below.

![image](https://hackmd.io/_uploads/r1Pz4V91bl.png)

A marketers goal should be to satisfy one or more of these needs.

### 🔸 Perception

Perception determines what consumers see and feel.
* ++Selective Exposure++ - we notice messages that interest us
* ++Selective Retention++ - we remember messages that are consistent with beliefs & attitudes, but do not remember those that conflict
* ++Selective Perception++ - we let in messages that are consistent with beliefs, attitudes, etc. and filter out those that conflict

**Example**:

![image](https://hackmd.io/_uploads/B11LwVq1Zg.png)

Refer to this ad from Ford. If someone has had a bad experience with Ford, what will they think? Conversely, does that mean that Ford should not attempt to alter that consumer's perception? Ford will continue to push this message to the consumer.

### 🔸 Attitudes

![image](https://hackmd.io/_uploads/SJFshE5Jbg.png)

* Attitude is a persons point of view about something and tend to be learned
* Beliefs are opinions people have on something
* Green Attitudes and Beliefs isrelated to a growing number of consumers that believe that they can have a positive impact on the environment
* Changing Negative Attitudes is most difficult job a marketer faces
* Ethical Issues May Arrise when marketers promote inaccurate or false beliefs
* Building Consumer Trust drives sales and repeat business
* Meeting Expectations is Important is where outcomes or events that a person anticipates are met

### 🔸 Psychographics

Psychographics, or lifestyle analysis, is used to help assess personalities. There are 3 drivers:
* Activities - idenfity what people do and are objectively observable
* Interests - tend to create stronger drives that may pinpoint market opportunities
* Opinions - the ways in which people feel about things

![image](https://hackmd.io/_uploads/SkzVySqybx.png)

### 🔸 Social

Social Standings, both perceived and actual, are powerful influences on consumers.

++Social Classess++ - a group of people who have approximately equal social positions as viewed by others in society
* In the US, income is not the main component of social class
    * Persons with similar income can still be in separate classes based on occupation, education, and type/location of housing

Additionally, there are other social influences as well:
* Reference Groups - people to whom an individual looks when forming attitudes about a topic
* Opinion Leaders - people who influence others
* Culture - whole set of beliefs, attitudes, and ways of doing things of a reasonably homogenous group of people
    * varies internationally
    * important to consider using localized human resources when conducting research in foreign markets

### 🔸 Situational Influence

The particular situation a consumer is in during or around the time of purchase can have effects on the actual purchase.
* Why they make the purchase
* When the purchase is available
* Physical surroundings

### 🔸 Expanded Model of Consumer Behavior

![image](https://hackmd.io/_uploads/Sy56ZHqJWe.png)

---

## 🧩 M12L4 - Business Buying Behavior

**Lesson Objectives**
* Discuss business and organizational customer types
* Evaluate roles and buying influences for customers
* Discuss the organizational buying process
* Define different business relationship dimensions

**Understanding Business & Organizational Customers in Regards to Marketing Strategy Planning**

![image](https://hackmd.io/_uploads/Hyz5UB5yWl.png)

### 🔸 Business & Organizational Customers

![image](https://hackmd.io/_uploads/HkQFUiiyWx.png)

Organizational Market, often referred to as the industrial market or business to business market, is larger than the consumer market. 

Organizations focus more on quality and purchase specifications. Purchasing specifications are fairly common and describe the needs of the organization. 

### 🔸 Organizational Customers Purchase Priorites

Organizational customers are not emotionless robots.

Marketing to these customers should blend economic and emotional value. Common psychological levers:
* competence
* trust
* recognition
* control
* security

Marketers should identify both organizational needs and individual needs.

### 🔸 Multiple Roles in the Buying Center

The ++buying center++ is a group of individuals involved in a company’s purchasing decision. Each person plays a unique role that shapes how information moves and decisions are made.

**Roles in the Buying Center**:
* Users – actually use the product or service (e.g., employees, technicians).
* Influencers – provide technical input or define product specifications.
* Buyers – handle supplier selection, price negotiation, and contracts.
* Deciders – have the formal authority to approve the final choice.
* Gatekeepers – control the flow of information to and from decision-makers (e.g., assistants, IT security).

**Key Points**
* Most B2B purchases involve multiple people with shared responsibility.
* One person can fill more than one role.
* Marketers must recognize and address each role’s priorities when selling.

### 🔸 Evaluating Organization Buying Influences

Organizational purchases are shaped by both rational and behavioral factors. While most buyers in B2B markets are professionals, human behavior still matters.

**Vendor Analysis**

* A vendor analysis is a formal rating of suppliers across relevant performance areas.
* The goal is to lower the total cost of purchase, not just the price.
* Common evaluation criteria:
    * Product quality and reliability
    * Delivery performance and timing
    * Cost efficiency
    * Responsiveness and customer service
    * Ethical behavior and compliance

**Additional Factors**

* Buyer’s experience with sales reps can influence supplier choice.
* Ethical conflicts may arise; many firms use a code of conduct to govern buyer–seller relationships.
* Centralized purchasing can help organizations gain economies of scale and better manage spending.

**Key Insight**
* Even in formal purchasing systems, relationships and trust impact supplier evaluations.
* Successful marketers balance economic logic with behavioral understanding when targeting organizations.

**Overlapping Needs of Individuals and Organizations

![image](https://hackmd.io/_uploads/ByIt0jikZg.png)

### 🔸 Organizational Buying Process

![image](https://hackmd.io/_uploads/BJ9R0joJbe.png)

![image](https://hackmd.io/_uploads/ryUy1ni1bx.png)

* New-task buy: first-time purchase; needs lots of info, time, and multiple people involved.
* Modified rebuy: repeat purchase with small changes (e.g., supplier, specs, or price).
* Straight rebuy: routine reorder from existing supplier; minimal review.

**Information Sources**
* Internal: previous data, coworkers, company databases.
* External: suppliers, sales reps, trade shows, websites, online reviews.
* Buyers prefer trusted sources and credible information.
* Search engines and B2B platforms (e.g., LinkedIn) are key early tools.

**Takeaway**
* The newer or riskier the purchase, the more complex and information-heavy the process.
* Marketers must build trust and provide reliable info matched to each stage.

### 🔸 Government Market

![image](https://hackmd.io/_uploads/SJd41hjybg.png)

* Government buyers include federal, state, and local agencies — large, regulated, and procedure-driven.
* Purchases often require competitive bidding and approved supplier lists.
* Decision criteria focus on price, compliance, and reliability, not emotion or brand.
* Regulations like the Foreign Corrupt Practices Act (FCPA) prohibit bribery of foreign officials.
* Government websites and publications outline current bids and approved vendors.

**Key point:**
Success in this market depends on meeting strict specs, following regulations, and building credibility over time.

---

## 🧩 Synchronous Class (10/29/2025)

The synchronous class goes over the concepts learned from the videos and provides more in-depth examples of each of them.

I recommend these if you find yourself confused even after the lecture videos and these notes.

---

## 🧩 M12L5 - Product Planning Development

**Lesson Objectives**:
* Discuss branding
* Evaluate packaging and warranty implications for products
* Discuss business and consumer product classes
* Define different business relationship dimensions
* Discuss the lifecycle of products
* Evaluate new product planning

### 🔸 Product Decisions for Marketing Strategy Planning

![image](https://hackmd.io/_uploads/BkI_W0j1Zg.png)

* A product is the full, need-satisfying offering — not just the physical good.
* Product planning includes all decisions around:
    * Product idea – features, benefits, quality, experience.
    * Branding – how the product is identified and emotionally recognized.
    * Packaging – protection, promotion, convenience, and sustainability.
    * Warranty – level of assurance offered (none, limited, full, extended).
    * Product class – whether the item targets consumers or businesses.

**Takeaway**:
Product strategy isn’t just what you sell — it’s how the total offering delivers value through design, identity, and support.

### 🔸 Physical Good vs Services - Product Spectrum

![image](https://hackmd.io/_uploads/HylGfRiy-g.png)

* Most offerings combine physical goods and services — rarely just one or the other.
* Examples across the spectrum:
    * Mostly Goods: canned soup, steel pipe, paper towels.
    * Mixed: restaurant meal, car purchase, cell phone (product + service).
    * Mostly Services: hair stylist, internet service, satellite radio.
* Consumers increasingly expect service components (support, convenience, customization) even with physical products.
* Evaluating the right mix helps marketers align customer expectations with delivery and pricing.

**Takeaway**:
Every product lies somewhere between a pure good and pure service—the best offerings blend both to enhance value and satisfaction.

### 🔸 Branding

++Branding++ - the use of a name, term, symbol, design (or combination) to identify a product and create an emotional response

**Takeaway**:
A strong brand doesn’t just label a product — it builds trust, emotion, and identity in the customer’s mind.

### 🔸 Brand Familiarity

![image](https://hackmd.io/_uploads/SydpR0o1Wl.png)

### 🔸 Conditions Favorable to Successful Branding

![image](https://hackmd.io/_uploads/H1NxykhJbe.png)

* Branding succeeds when certain market and product factors align.

**Key Conditions**
* Product quality is consistent and seen as best value for price.
* Dependable, widespread availability ensures trust and repeat sales.
* Strong demand allows pricing high enough to cover branding costs.
* Economies of scale make branding profitable as volume grows.
* Favorable shelf/display space improves visibility.
* Product is easy to label and identify by name or mark.

**Takeaway**:
Branding works best when the product is reliable, accessible, and distinct — strong demand and visibility amplify recognition and loyalty.

### 🔸 Packaging

* Packaging does more than hold the product — it’s a strategic marketing tool.
* Functions of packaging:

    * Protects the product during shipping and storage.
    * Promotes the product through visual appeal and information.
    * Enhances usability, safety, or convenience for the customer. * Can reduce distribution costs by saving space and weight.
* Smart design supports brand recognition and ties packaging to other promotional elements.
* Packaging can also align with sustainability goals or anti-theft features.

**Takeaway**:
Good packaging communicates value, improves usability, and reinforces the brand — it’s a key part of the overall product experience.

### 🔸 Business & Consumer Product Classes

![image](https://hackmd.io/_uploads/HkL2ykhJZx.png)

**Business Product Classes**:
* Used to produce other goods/services.
* Installations: major, long-term capital items (buildings, heavy equipment).
* Accessories: short-lived tools and equipment (hand tools, office printers).
* Raw Materials: unprocessed goods used in production (lumber, crude oil).
* Component Parts/Materials: become part of the final product (chips, tires).
* MRO Supplies: maintenance, repair, and operating items (paint, paper, toner).
* Professional Services: specialized support (consulting, accounting).

**Customer Product Classes**:

Defined by how consumers buy them.

* Convenience Products: low-effort, frequent purchases (toothpaste, snacks).
    * Staples (routine buys)
    * Impulse products (unplanned)
    * Emergency products (urgent needs)
* Shopping Products: compared before purchase.
    * Homogeneous – similar quality, price matters.
    * Heterogeneous – quality and features differ.
* Specialty Products: strong preference, willing to search for (luxury goods).
* Unsought Products: consumers don’t think about until needed (insurance, funeral services).

**Takeaway**:
Classifying products helps marketers tailor promotion, pricing, and distribution to match how customers shop and decide.

---

## 🧩 M12L6 - Product Development

Product planning leads into product development, where firms manage the life cycle of offerings and create new products to sustain growth.
This process connects strategy, innovation, and market adaptation.

### 🔸 Product Life Cycle (PLC)

1. Market Introduction
* Sales are low; awareness and education are key.
* Heavy investment in promotion, market research, and early distribution.
* Profits often negative due to startup costs.

2. Market Growth
* Sales rise rapidly; profits peak, then begin to decline as competition increases.
* Competitors enter and differentiate to target niches.
* Firms must balance short-term profit with long-term brand positioning.

3. Market Maturity
* Sales level off; competition intensifies.
* Promotion becomes persuasive rather than informative.
* Price sensitivity rises; weaker firms often exit the market.
* Efficiency and brand loyalty become critical for profit retention.

4. Sales Decline
* New products replace old ones.
* Price competition and reduced promotion are common.
* Profitable brands can remain viable by cutting costs and serving loyal segments.

**Key Points**:

* PLC length varies by industry and innovation rate.
* Fads and fashion products move fastest; industrial goods often move slower.
* Early entrants (pioneers) can gain share but also face higher R&D risk.
* Followers can succeed by improving or re-positioning proven concepts.

### 🔸 New Product Development (NPD) Process

1. Idea Generation
* Collect ideas from employees, customers, competitors, R&D, and markets.
* Encourage creativity without early filtering.

2. Screening
* Evaluate ideas against company goals, resources, and SWOT factors.
* Estimate ROI and remove poor fits early.

3. Idea Evaluation
* Conduct concept testing with potential customers.
* Gather feedback on perceived benefits, value, and likely demand.
* Refine cost, revenue, and profitability projections.

4. Development
* Turn concept into tangible prototype or service model.
* Perform test marketing in select areas to gather performance data.
* Adjust the marketing mix and operational plan.

5. Commercialization
* Full market rollout requiring cross-departmental coordination.
* Establish production, distribution, service, and promotional support.
* Some firms launch gradually (by region) to control costs and manage risk.

### 🔸 Managing Product Development

* Requires company-wide cooperation across R&D, marketing, finance, and operations.
* Top management support and resource allocation are essential.
* Cross-functional teams improve communication and speed to market.
* Product/brand managers oversee specific lines, coordinate the marketing mix, and monitor performance.
* Strong brands often appoint product champions to lead strategy and promotion initiatives.
* Emphasis on timeliness and adaptability — products must reach market before needs shift or competitors catch up.
* A culture of continuous innovation sustains long-term competitiveness.

### 🔸 Ethical & Strategic Considerations

* Planned obsolescence or withholding innovations can cause consumer backlash.
* Claims of “new” products must meet FTC standards — only six months of “new” status unless functionally different.
* Firms must maintain replacement parts and transparency to avoid negative perception.
* Ongoing market research ensures new offerings match real customer needs, not internal assumptions.

### 🔸 Big Picture Takeaways

* Product planning integrates branding, packaging, warranties, and class segmentation into a full offering strategy.
* Product development converts ideas into value through disciplined, data-driven stages.
* Lifecycle awareness ensures the firm invests resources efficiently and knows when to innovate or retire a product.
* Successful firms view development as a continuous loop — learning, adapting, and creating new solutions before competitors do.

---

# ❓ Self-Assessment Questions

1. Which need on the hierarchy of needs does this advertisement from Hallmark attempt to meet?

![image](https://hackmd.io/_uploads/HyS9lMhJ-g.png)

**Social Needs**

2. The new product development process is an organized approach for bringing new products to market and consists of 5 stages.  Place the 5 stages in order:

**ISIDC**
**Idea Generation**
**Screening**
**Idea Evaluation**
**Development**
**Commercialization**

3. Many new product concepts require an adoption process. Match the stage of the adoption process with the correct order

**AIETDC**
**Awareness**
**Interest**
**Evaluation**
**Trial**
**Decision**
**Confirmation**

4. In this course, we delve into multiple issues concerning Product Life cycle Length. Which one of these is NOT an issue?

**Greater Product Complexity**

5. Utilizing the marketing mix in a distinct way such that customers see it as different from the competition is known as:

**differentiation**

6. Which of the following does not represent a differentiation strategy?

**Offering an assortment of commodity/me-too products**

7. Tension caused by uncertainty about the rightness of a decision is known as:

**dissonance**

8. When a consumer tends to resort to habit when solving a buying problem and making a purchase decision, this is known as:
extensive solving behavior

**routinized response behavior**

9. Stimuli created by a marketer in the environment that trigger a drive or response are:

**cues**

10. Customers remembering messages that are consistent with their beliefs and attitudes, but not remembering those messages that conflict, is known as:

**selective retention**

11. Sarah is considered part of an active, outdoor-loving, customer segment that is into sports, music and fashion. This is an example of segmentation based on activities, interests and opinions ad relates to:

**Psychographics**

12. In marketing to businesses and organizations, several people are usually involved in the purchase decision. This collection of roles is referred to as the:

**Buying Center**

13. Sweets Galore, the manufacturer of Rainbow brand lollipops, decided to expand into manufacturing liqueur-filled chocolate truffles. Its buying process for the chocolates, liqueurs, and molds was extensive, and included setting product specifications and evaluating sources of supply. This is an example of a:

**new-task buy**

14. What term is used to describe when a customer purchases a product with no planning or forethought?

**impulse buying**

15. _____________ products are ones that the customer really wants because there are no acceptable substitutes. They are characterized by the customer's willing to search.

**Specialty**

16. E-Z-Go, a producer of golf carts, promotes its carts to prospective customers by advertising them as an easy and quiet way for workers to get around malls, airports, and big factories. E-Z-Go is trying to increase its sales through:

**market development**

17. Wizard Toy Company's marketing researcher conducted a survey to find out the percentage of customers who, after receiving a promotional mailing about a new toy, actually went out and purchased the product. This market research survey is an example of:

**quantitative research**

18. Lipton has increased sales by developing ads that encourage its current customers to drink Lipton tea instead of coffee at morning "coffee breaks." This effort focuses on:

**market penetration**


19. Tom and Sally Jones are preparing to purchase a new car. He currently has a Toyota Camry and she has a Honda Accord. They now have two children under age 5, so they plan to trade in Sally's car to purchase a minivan. Sally and Tom decided on a Honda Odyssey because Sally is familiar with Hondas and thinks they are very reliable. In this purchase situation, Tom and Sally's family life cycle stage is a _____________ segmenting dimension, and the benefit Sally seeks (reliability) is a _____________ segmenting dimension.

**demographic; behavioral**


20. "Publicity"

**is mass selling that avoids paying media costs**