Chap013

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*Chapter Thirteen

Marketing: Helping

Buyers Buy

Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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*What is Marketing?

• Marketing -- The activity, set of institutions and processes for creating, communicating, delivering, and exchanging offerings with value for customers, clients, partners, and society at large.

WHAT’S MARKETING?LG1

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*The Evolution of Marketing

• Production Era

• Selling Era

• Marketing Concept Era

• Customer Relationship Era

FOUR ERAS of U.S. MARKETINGLG1

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*The Evolution of Marketing

• The general philosophy was “Produce what you can because the market is limitless.”

• After mass production, the focus turned from production to persuasion.

The PRODUCTION and SELLING ERAS LG1

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*The Evolution of Marketing

• After WWII, a consumer spending boom developed.

• Businesses knew they needed to be responsive to consumers if they wanted their business.

The MARKETING CONCEPT ERALG1

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*The Evolution of Marketing

• The Marketing Concept includes three parts:1. Customer Orientation -- Finding out what

customers want and then providing it.

2. Service Orientation -- Making sure everyone in an organization is committed to customer satisfaction.

3. Profit Orientation -- Focusing on the goods and services that will earn the most profit.

APPLYING the MARKETING CONCEPT LG1

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*The Evolution of Marketing

• Customer Relationship Management (CRM) -- Learning as much as you can about customers and doing what you can to satisfy or exceed their expectations.

• Organizations seek to enhance customer satisfaction building long-term relationships.

• Today firms like Priceline and Travelocity use CRM that allow customers to build a relationship with the suppliers.

The CUSTOMER RELATIONSHIP ERA LG1

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• Nonprofit marketing tactics include:

NONPROFIT MARKETINGNonprofit Organizations and Marketing

LG1

- Fundraising

- Public Relations

- Special Campaigns

- Ecological practices

- Changing public opinions and attitudes

- Increasing organizational membership

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• Nonprofit marketing strategies include:- Determine the firm’s goals and objectives.

- Focus on long-term marketing.

- Find a competent board of directors.

- Exercise strategic planning.

- Train and develop long-term volunteers.

- Carefully segment the target market.

MARKETING STRATEGIES for NONPROFITS

Nonprofit Organizations and Marketing

LG1

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THE MARKETING MIX (a blending of the following)

• I. PRODUCT• II. PRICE• III. PLACE• IV. PROMOTION

• **in short the 4 p’s drive marketing efforts

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*Designing a Product to Meet Consumer Needs

• Product -- A good, service, or idea that satisfies a consumer’s want or need.

• Test Marketing -- Testing product concepts among potential product users.

• Brand Name -- A word, letter, or a group of words or letters that differentiates one seller’s goods from a competitor’s.

DEVELOPING a PRODUCTLG2

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*Setting an Appropriate Price

• Pricing products depends on many factors:- Competitors’ prices

- Production costs

- Distribution

- High or low price strategies

• Middlemen are important in place strategies because getting a product to consumers is critical.

PRICING and PLACING a PRODUCT LG2

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*Developing an Effective Promotional Strategy

• Promotion -- All the techniques sellers use to inform people about their products and motivate them to purchase those products.

• Promotion includes:- Advertising

- Personal selling

- Public relations

- Viral marketing

- Sales promotions

PROMOTING the PRODUCTLG2

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*Providing Marketers with Information

• Marketing Research -- Analyzing markets to determine challenges and opportunities, and finding the information needed to make good decisions.

• Research is used to identify products consumers have used in the past and what they want in the future.

• Research uncovers market trends and attitudes held by company insiders and stakeholders.

SEARCHING for INFORMATIONLG3

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*The Marketing Research Process

1. Defining the problem or opportunity and determining the present situation.

2. Collecting research data.

3. Analyzing the data.

4. Choosing the best solution and implementing it.

FOUR STEPS in the MARKETING RESEARCH PROCESS LG3

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*Collecting Data

• Secondary Data -- Existing data that has previously been collected by sources like the government.

COLLECTING SECONDARY RESEARCH DATA LG3

• Secondary data incurs no expense and is usually easily accessible.

• Secondary data doesn’t always provide all the needed information for marketers.

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*Collecting Data

• Primary Data -- In-depth information gathered by marketers from their own research.

• Telephone, online and mail surveys, personal interviews, and focus groups are ways to collect primary data.

COLLECTING PRIMARY RESEARCH DATA LG3

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*Collecting Data

• Focus Group -- A group of people who meet under the direction of a discussion leader to communicate opinions.

FOCUS GROUPSLG3

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*Analyzing the Research Data

• Marketers must turn data into useful information.

• Must use their analysis to plan strategies and make recommendations.

ANALYZING the DATA and IMPLEMENTING the DECISION LG3

• Finally, marketers must evaluate their actions and determine if further research is needed.

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• Analyze customer needs and satisfaction.• Analyze current markets and opportunities.• Analyze the effectiveness of marketing

strategies.• Analyze marketing process and tactics currently

used.• Analyze the reasons for goal achievement or

failure.

KEY BENEFITS of MARKETING RESEARCH LG3

Analyzing the Research Data

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• Conduct informal consumer surveys.

WAYS to FIND OUT WHAT CONSUMERS THINK LG3

Analyzing the Research Data

• Host a customer focus group.

• Listen to competitor’s customers.

• Survey your sales force.• Become a “phantom”

customer.

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*The Marketing Environment

• Environmental Scanning -- The process of identifying factors that affect marketing success.

• Factors involved in the environmental scan include:- Global factors

- Technological factors

- Sociocultural factors

- Competitive factors

- Economic factors

SCANNING the MARKETING ENVIRONMENT LG4

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*The Marketing EnvironmentThe MARKETING ENVIRONMENT

LG4

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• Always be customer-focused.

• Benchmark against the best firms.

• Continuously improve performance.

• Develop the best value package.

• Empower your employees.

• Focus on relationship building.

• Goal achievement is the reward.

The ABC’s of MARKETINGLG4

The Marketing Environment

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*Two Different Markets: Consumer and B2B

• Consumer Market -- All the individuals or households that want goods and services for personal use and have the resources to buy them.

The CONSUMER and B2B MARKET LG4

• Business-to-Business (B2B) -- Individuals and organizations that buy goods and services to use in production or to sell, rent, or supply to others.

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*The Consumer Market

• The size and diversity of the consumer market forces marketers to decide which groups they want to serve.

• Market Segmentation -- Divides the total market into groups with similar characteristics.

• Target Marketing -- Selecting which segments an organization can serve profitably.

MARKETING to CONSUMERSLG5

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*Segmenting the Consumer Market

• Geographic Segmentation -- Dividing the market by cities, counties, states, or regions.

• Demographic Segmentation -- Dividing the market by age, income, education, and other demographic variables.

• Psychographic Segmentation -- Dividing the market by group values, interests, and opinions.

(continued)

SEGMENTING the CONSUMER MARKET LG5

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*Segmenting the Consumer Market

• Benefit Segmentation -- Dividing the market according to product benefits the customer prefers.

• Volume (Usage) Segmentation -- Dividing the market by the volume of product use.

SEGMENTING the CONSUMER MARKET

(continued)LG5

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*Reaching Smaller Market Segments

• Niche Marketing -- Identifies small but profitable market segments and designs or finds products for them.

MARKETING to SMALL SEGMENTS LG5

• One-to-One Marketing-- Developing a unique mix of goods and services for each individual consumer.

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*Moving Toward Relationship Marketing

• Mass Marketing -- Developing products and promotions to please large groups of people.

• Relationship Marketing-- Rejects the idea of mass production and focuses toward custom-made goods and services for customers.

MASS MARKETING vs. RELATIONSHIP MARKETING LG5

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• Effective relationship marketing is built on:

• Open communication

• Consistently reliable service

• Staying in contact with customers

• Trust, honesty, and ethical behavior

• Showing that you truly care

KEYS to SUCCESSFUL RELATIONSHIP MARKETING LG5

Moving Toward Relationship Marketing

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*The Consumer Decision-Making Process

1. Problem recognition

2. Search for information

3. Evaluating alternatives

4. Purchase decision

5. Postpurchase evaluation

STEPS in the CONSUMER DECISION-MAKING PROCESS LG5

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*The CONSUMER DECSION MAKING

PROCESS AND OUTSIDE INFLUENCESLG5

The Consumer Decision-Making Process

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*The Business-to-Business Market

• Learning

• Reference Groups

• Culture

• Subcultures

• Cognitive Dissonance

KEY FACTORS in CONSUMER DECISION-MAKING LG6

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*The Business-to-Business Market

• B2B marketers include:- Manufacturers

- Wholesalers and retailers

- Hospitals, schools and charities

- Government

• Products are often sold and resold several times before reaching final consumers.

BUSINESS-to-BUSINESS MARKET (B2B) LG6

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*The Business-to-Business Market

• There are relatively few customers.• Customers tend to be large buyers.• Markets are geographically concentrated.• Buyers are more rational than emotional.

B2B MARKET DIFFERENCESLG6

• Sales are direct.• Promotions focus

heavily on personal selling.

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