MARKETING: BUILDING PROFITABLE CUSTOMER CONECTIONS · Colgate-Palmolive, for instance, has dedicated customer service teams working with key accounts such as Walmart ... -Psychographic

MARKETING: BUILDING PROFITABLE CUSTOMER

CONECTIONS

CHAPTER 11 BUS9

Group V ■  Jacob Andrews ■  Sarah Hayes ■ Nick Walker ■ William Witthauer ■  Francisco Montoya

The Scope of Marketing

■  production era-Marketing didn’t always start with the customer. In the early 1900s. most products were purchased as soon as they were produced and distributed to consumers. the top business priority was to produce large quantities of goods as efficiently as possible,there was no need to market their products to customers.

■  Selling era-during the 1920s, production capacity increased. For the first time, supply exceeded demand. The selling focus gained momentum in the 1930s and 1940s, when the Depression and World War II made consumers even more reluctant to part with their limited money.

The Scope of Marketing

■  Marketing era-The landscape changed during the 1950s. Most factories went from making military supplies to consumer production, flooding the market with choices in every product category. An era of peace and growth emerged as soldiers returned from World War II ,marriage and birth rates increased. To compete for the consumer’s money, marketers started to provide goods and services that met customer needs better than anything else the competitors offer. As a result, the marketing concept materialized in the 1950s. The marketing concept is a philosophy that makes customer satisfaction now and in the future the central focus of the organization. Companies that embrace this philosophy strive to satisfy customers, integrating this goal into all business activities. The marketing concept holds that delivering unmatched value to customers is the only effective way to achieve long-term profitability.

The Scope of Marketing

■  Relationship era-The marketing concept has increased its momentum across the economy, leading to the current era, unfolding over the last decade, which focus on long-term customer relationships. gaining a new customer can cost five times more than keeping an existing customer. keeping your current customers and getting them to spend more money is cost-effective. satisfied customers can develop into advocates for your business, becoming powerful generators of positive “word-of-mouth.”

■  Limited relationships-The base of your relationships will depend on the data gather and your industry.to gather data the company invites customers to call its toll-free line with questions or comments, and it maintains a vibrant website with music, an e-newsletter, special offers, and an invitation to contact the company.the company actively gathers data and pursues a connection with customers who initiate contact.

The Scope of Marketing

■  FULL PARTNERSHIPS-If you have a high-ticket product and a smaller customer base, it’s more likely to pursue a full partnership with each of your key clients. Colgate-Palmolive, for instance, has dedicated customer service teams working with key accounts such as Walmart and Costco. With a full partnership, the marketer gathers and leverages extensive information about each customer and often includes the customer in key aspects of the product development process.

■  VALUE-You know you’ve delivered value when your customers believe that your product has a better relationship between the cost and the benefits than any competitor. By this definition, low cost does not always mean high value.recent survey suggests that loyal customers are often willing to pay more for their products rather than switch to lower-cost competitors. Apple provides a clear example. We probably all know at least a handful of Apple fanatics who gladly pay far more for their PowerBooks (or iPhones or iPads) than they would pay for a competing product.

Who is My Target Market?

■  Target Market- People who are most likely to buy your product

■  Market Segmentation - Dividing your market into groups of people, or segments, that are similar to one another and different from everyone else.

■  Look at:

-Size - must be enough customers

-Profitability - people that are willing to pay you for product

-Accessibility - how easy it is to reach your product

-Limited Competition- make sure you can last in market

Who is My Target Market?

■  Know who you’re marketing to, either B2B or B2C.

(Both require different marketing strategies)

■  Distinguish your target audience by using a wide variety of consumer characteristics - B2C -

-Demographics - age, income, ethnicity, etc.

-Geographic - where the customer lives

-Psychographic - consumers attitudes/lifestyles

-Behavioral - how people behave towards product

Who is My Target Market

■  B2B Marketing is a little different in Market Segmentation

-Geographic - Shipping capabilities or Clustered Industries

-Customer Based - dividing market based on ultimate customer, how your product can help the business you are selling to, and ultimately satisfy their customers.

-Product Based - Focus on product and how customer will use the end product.

The Marketing Mix !  Product Strategy

♦  Your product is more than just a tangible good ♦  Your product strategy ranges from brand name, to image, to design, customer service, development, etc.

!  Pricing Strategy ♦  Pricing must be fair, and face compe==on, regula=on, and public opinion ♦  Also, category makes a difference, Ex. Desk and Knee Surgery

!  Distribu=on Strategy ♦  Goal is to deliver to the right people, the right amount at the right =me, in the right place ♦  Includes shipping, warehousing, and selling outlets

!  Promo=on Strategy ♦  Includes all the different ways marketers communicate about their products ♦  The list is long and growing, but it includes adver=sing, personal selling, promo=ons, PR, word-of-mouth and

product placement

The Global Marke=ng Mix ■  When you go into foreign markets, you’ll need to reevaluate your marketing

mix, many business goods won’t require much change such as heavy machinery, cement, farming equipment, but consumer products often require huge revamps

■  Ex. Nike in China

The Marke=ng Environment ■  Compe==ve

•  Affects marketers day-to-day more than others

•  Involves market share analysis and include indirect compe=tors as well (Ex. Altoids and Scope

■  Economic

•  Even though it’s nearly impossible to predict, your goal is to iden=fy and respond to changes ASAP

•  Some opportuni=es can thrive in recessions such as affordable luxuries and DIY items

The Marke=ng Environment ■  Social/Cultural

■  Basically, following, anticipating and responding to trends is huge esp. in items like entertainment, fashion, and technology

■  Technological ■  Changes in tech can be very visible to consumers (Ex. iPhone) ■  However, it can also affect marketers in less-visible ways, (Ex.

Products such as jeans being customizable for a reasonable price)

■  Political/Legal ■  Following and adapting to political climate, esp. in heavily

regulated areas such as pharmaceuticals

Customer Behavior

■  Customer Behavior: how people act when they are buying products for their own personal

■  consumption. ● Seems spontaneous, but actually stems from complex influences

■  There are 4 elements that influence consumer decision making: 1. Cultural: Culture, Subculture, Social Class 2. Social: Family, Friends, Reference Groups 3. Personal: Demographics, Personality 4. Psychological: Motivations, attitudes, perceptions, learning

Customer Behavior

Customer Behavior

■  Cognitive Dissonance: Kicking oneself after making a purchase that you now regret

*Post purchase Behavior Example

■  Business buyer behavior: refers to how people act when they’re buying products to use either directly or indirectly to produce other products (e.g., chemicals, copy paper, computer servers).

● Usually receive training for buying & have specific objectives

Social Responsibility & Technology

Two key factors have had a dramatic impact on marketing in the past couple of decades: a surge in the social responsibility movement, and the dramatic emergence of the Internet and digital technology.

■  Demand for more socially responsible marketing to contribute to the needs of a broader community

■  higher standard in key areas such as environmentalism, abolishment of sweatshops, and involvement in the local community.

■  Green Marketing when they actively promote the ecological benefits of their products EX. Toyota Prius

Technology & Marketing

■  24/7 Access with internet

■  Competition has intensified

■  Market Reach has expanded

■  More promotional opportunities

■  Mass Customization: creating products tailored for individual consumers on a mass basis. EX. Nike shoe customization

MARKETING RESEARCH: SO WHAT DO THEY REALLY THINK? ■  Marketing research: Process of gathering, interpreting,

and applying information to find opportunities and challenges. Which, in turn adds more value for customers and more profits for businesses.

MARKETING RESEARCH: SO WHAT DO THEY REALLY THINK? ■ Companies use marketing research to:

•  Identify external opportunities and threats (from social trends to competition).

•  Monitor and predict customer behavior. •  Evaluate and improve each area of the

marketing mix. (product, place, promotion, price)

MARKETING RESEARCH: SO WHAT DO THEY REALLY THINK? ■ There are two main

categories of marketing research data.

■ Always conduct research on secondary data first: less expensive, readily available.

MARKETING RESEARCH: SO WHAT DO THEY REALLY THINK? ■  There are two basic categories of primary research:

■  Observation research: happens when the researcher does notdirectly interact with the research subject. The key advantage of watching versus asking is that what people actually do often differs from what they say (ex. Scanner data from retail sales,)

■  Survey research happens when the researcher does interact with research subjects. The key advantage is that you can secure information about what people are thinking and feeling, beyond what you can observe. (ex. Focus groups, Telephone and online questionnaires)

Case Study