Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall 1-1 Customer Driven Marketing http://www.wileybusinessupdates.co m Chapter 11 Learning Objectives 2 1 Define marketing. Describe marketing research. 5
2 Discuss the evolution of the marketing concept. Discuss market segmentation. 6 3 Describe not-for-profit marketing and nontraditional marketing. Outline the basic steps in developing a marketing strategy. 7 Summarize consumer behavior. Discuss relationship marketing. 8
4 Copyright (c) John Wiley & Sons, Inc. What is Marketing? 3 A set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders. Marketing begins with discovering unmet customer needs and continues with researching the potential market
Producing a good or service capable of satisfying the targeted customers; and promoting, pricing, and distributing that good or service. Copyright 2015 John Wiley & Sons, Inc. What is Marketing? 4 Throughout the entire marketing process, a successful organization focuses on building customer relationships. The best marketers not only give consumers what they want, but anticipate consumers need before those needs surface.
Exchange process - activity in which two or more parties give something of value to each other to satisfy perceived needs. Copyright 2015 John Wiley & Sons, Inc. 5 How Marketing Creates Utility
Utility: the ability of a good or service to satisfy a wants and needs of customers Create form utility by converting raw materials and other inputs into finished goods and services Create time utility by making a good or service available when customers want to purchase it Create place utility by making a product available in a location convenient for customers Create ownership utility through an orderly Copyright 2015 John Wiley & Sons, Inc. Evolution of the Marketing Concept 6
Copyright 2015 John Wiley & Sons, Inc. Emergence of the Marketing Concept 7 Marketing concept company-wide consumer orientation to promote long-run success. Firm starts with analysis of customers needs and works backward to offer products that fulfill them. Firm Explained by shift from sellers market in which goods and services are relatively scarce to buyers market in
which they are relatively plentiful. Copyright 2015 John Wiley & Sons, Inc. Not-for-Profit Marketing 8 20 million not-for-profits exist worldwide Apply marketing tools to reach audiences, secure funding, improve their images, and accomplish their overall missions Not-for-profit organizations operate in both public and private sectors Sometimes partner with a profit-seeking
company to promote a message. Copyright 2015 John Wiley & Sons, Inc. Non-Traditional Marketing 9 Cause promotes awareness or raises money for a cause or issue
Place attract people to a particular area Event marketing or sponsoring events Person attracting the attention, interest, and preference towards a person Organization accepting the goals of, receiving the services, or contributing to a Copyright 2015 John Wiley & Sons, Inc. Marketing Plan 10
The marketing plan is a key component of a firms overall business strategy The marketing plan outlines its marketing strategy, including information about: Target market Sales and revenue goals The marketing budget Timing for implementing elements of the marketing mix. Copyright 2015 John Wiley & Sons, Inc. Developing a Marketing Strategy 11 1. Study and analyze potential target markets and choose among them. 2. Create a marketing mix to
satisfy the chosen market. Copyright 2015 John Wiley & Sons, Inc. Selecting a Target Market 12 Target market - group of people toward whom an organization markets its goods, services, or ideas with a strategy designed to satisfy their specific needs and preferences. Types of Markets Consumer (B2C) product: good or service that is purchased by end users Business (B2B) product: good or service
purchased to be used, either directly or indirectly, in the production of other goods for resale Copyright 2015 John Wiley & Sons, Inc. Marketing Mix 13 Marketing mix blends the four strategies to fit the needs and preferences of a specific target market. Product Strategy - the nature of the product and its package design, brand names, trademarks, and product image. Distribution strategy - customers receive their purchases in the proper quantities at the right times and locations. Promotional strategy blends advertising, personal selling, sales promotion, and public relations to achieve its goals of informing, persuading, and influencing
purchase decisions. Pricing strategy is setting profitable and Copyrightjustifiable 2015 John Wiley & Sons, Inc. prices for the firms product offerings, sometimes Marketing Mix for International Markets 14 Standardization - offering the same marketing mix in every market. Adaptation - developing a unique marketing mix to fit each markets local competitive conditions, consumer
preferences, and government regulations. Mass Customization - allows a firm to mass produce goods and services while adding unique features to individual or small groups of orders. Copyright 2015 John Wiley & Sons, Inc. Marketing Research 15 Marketing research the process of collecting and evaluating information to support marketing decision making. AC Nielson Consumer Research Secondary data Previously published data from trade associations, advertising agencies, marketing research firms, and other sources.
Primary data Data collected through observation, surveys, and other forms of observational study. Data mining computer searches of customer data to detect patterns and relationships. Business intelligence activities and technologies for gathering, storing, and analyzing data to make better competitive decisions Copyright 2015 John Wiley & Sons, Inc. How Segmentation Works 16
Market segmentation the process of dividing a total market into several relatively homogeneous groups to reach desirable target markets. Copyright 2015 John Wiley & Sons, Inc. Segmenting Consumer and Business Markets 17 Copyright 2015 John Wiley & Sons, Inc. Segmenting Consumer Markets 18
Geographic Segmentation Divides market into homogeneous groups on the basis of their locations. Demographic Segmentation Divides market on the basis of various demographic or socioeconomic characteristics: gender, income, age, occupation, household size, stage in the family life cycle, education, and ethnic group Psychographic Segmentation
Divides consumer market into groups with similar psychological characteristics, values, and lifestyles. (VALS) AIO statementspeoples verbal descriptions of various attitudes, interests, and opinions Product-Related Segmentation Divides market based on buyers relationship to the good or Copyright 2015 John Wiley & Sons, Inc. service. Demographic Segmentation 19
Copyright 2015 John Wiley & Sons, Inc. 20 Segmenting Business Markets Geographic many B2B target geographically concentrated industries such as aircraft or automobiles. Demographic, or customer-based, segmentation a good or service intended for a specific organizational market (i.e. healthcare). End-use segmentation - focuses on the precise way a B2B purchaser will use a product.
Copyright 2015 John Wiley & Sons, Inc. Determinants of Consumer Behavior 21 Consumer Behavior - actions of ultimate consumers directly involved in obtaining, consuming, and disposing of products and the decision processes that precede and follow these actions. Personal factors- Personal factors: needs and motives, perceptions, attitudes, self-concept Interpersonal factors - cultural, social, and family influences External factors - economic events Business buying behavior - often includes a variety of influences from multiple decision makers
Copyright 2015 John Wiley & Sons, Inc. Steps in Consumer Behavior Process 22 Copyright 2015 John Wiley & Sons, Inc. Relationship Marketing 23 Relationship marketing- goes beyond the effort of simply making a sale Developing and maintaining long-term, cost-effective exchange relationships with partners Consumers enter into relationships only if there is some benefit to them. Relationship marketing seeks to achieve customer satisfaction
Copyright 2015 John Wiley & Sons, Inc. Benefits of Relationship Marketing 24 Lower costs and higher profits for the business Efficient targeting of best customers increases the lifetime value of a customer. Revenues and intangible benefits (referrals and customer feedback) from a customer over the life of the relationship, minus the amount the company must spend to acquire and serve that customer.
Stronger relationships with business partners and opportunities to combine capabilities and resources to better accomplish goals. Copyright 2015 John Wiley & Sons, Inc. Tools for Nurturing Customer Relationships 25 80/20 principle: frequent customers have a
higher lifetime value, so businesses allocate resources accordingly Frequency marketing: reward purchasers with cash, rebates, and other premiums. See Walgreens Balance Rewards Loyalty program. Affinity programs: solicit involvement based on common interest Comarketing: businesses jointly market each others products Cobranding: firms link their names in a single product Copyright 2015 John Wiley & Sons, Inc. One-to-One Marketing 26
Customizing products and marketing and rapidly delivering goods. Marketers can maintain databases about customers with regard to tastes, price range preferences, purchasing habits, and lifestyles. Customer relationship management software helps companies gather, sort, and interpret data about specific customers. Copyright 2015 John Wiley & Sons, Inc.
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