chapter 11: marketing building profitable connections with your customers
TRANSCRIPT
CHAPTER 11: MARKETING
Building Profitable Connections with Your Customers
MARKETING IS MORE THAN ADVERTISING
Marketing – 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.
UTILITY
The ability of
goods and
services to
satisfy wants.
FormUtility
TimeUtility
PlaceUtility
Ownership Utility
THE SCOPE OF MARKETING: IT’S EVERYWHERE
People Marketing
Place Marketing
Event Marketing
Idea Marketing
THE EVOLUTION OF MARKETING: FROM THE PRODUCT TO THE CUSTOMER
THE CUSTOMER: FRONT AND CENTER
Limited Relationships
FullPartnerships
Customer Relationship Customer Relationship Management (CRM)Management (CRM)
Value
Customer Satisfaction
Customer Loyalty
MARKETING STRATEGY
WHERE ARE YOU GOING AND HOW WILL YOU GET THERE?
THE ENVIRONMENT IS CONSTANTLY CHANGING
When low
carbohydrate diets
swept through
American culture,
retail sales of french
fries plummeted,
dropping 2.9% in
2001, 3.3% in 2002,
and 10% in 2003.
TARGET MARKET
A Well Chosen Target Market: Size
Profitability
Accessibility
Limited Competition
CONSUMER MARKETS VS BUSINESS MARKETS
How will the buyer use the
product?
Consumer Markets
Business Markets
Products for personal
consumption.
Products used directly or
indirectly to produce other
products.
Different approaches to select target markets.
ANALYZING PROMOTIONAL STRATEGIES
MARKET SEGMENTATION
Marketers may select multiple segments to target.
Marketers may select multiple segments to target.
Selecting a target
market begins with
dividing your
market into
segments.
CONSUMER MARKET SEGMENTATION
Demographic
Geographic
Psychographic
Behavioral
BUSINESS MARKET SEGMENTATION
• Geographic
• Customer-based
• Product-use based
TURN UP THE VOLUME ON NAGGING: MARKETING TO KIDS
Advertising directly to kids in the United States is a $15 billion business
Kids under 13 influence about $600 billion in family spending each year
Media-savvy kids often don’t notice the pitches
A scary result: 53% of kids say buying certain products makes them feel better about themselves
THE MARKETING MIX
THE GLOBAL MARKETING MIX
Do you need to change your marketing mix for every country?
Most consumer products require a new marketing mix for each global market.
GRASS ROOTS MARKETING IS A BUNCH OF BULL...RED BULL
Red Bull launched in Europe in 1987
They gave away cases of the product to student advocates and encouraged them to throw a PARTY!
They stayed connected with their young target market, becoming popular in bars
Red Bull launched in the US in 1997
They still employ Word-of-Mouth strategies
CUSTOMER BEHAVIOR: DECISIONS, DECISIONS, DECISIONS
Consumer Behavior
How people act when they are buying
products.
CONSUMER DECISION MAKING PROCESS
Need Recognition
Information Search
Postpurchase Behavior
Evaluation of Alternatives
Purchase Decision
INFLUENCE IN DECISION MAKING
Cultural: Values, attitudes, customs, social class
Social: Family, friends & reference groups
Personal: Demographics, personality
Psychological: Motivation, attitudes, perceptions, learning
BUSINESS BUYER BEHAVIOR
Rationale Criteria Specific Purchase Criteria Objective Standards Input from Multiple Internal Sources Formal Process Frequently Seek Customized Goods
MARKETING RESEARCH: SO WHAT DO THEY REALLY THINK?
Monitor and predict customer behavior
Evaluate and improve marketing mix
Better marketing decisions
More value for consumers
More profits for business
Conducting Market Research1. Define the problem2. Access available information3. Gather additional information4. Review internal records; interview
employees5. Collect outside data6. Organize and interpret data7. Make a decision and take action8. Assess the results of the action
Define the Problem
List the possible causes Eliminate any that can not be measured
Beware of symptoms Your company has missed its revenue
targets Symptom – sales declined Possible causes:
Have your customers changed? Have their tastes changed? Have their buying habits changed? Have you changed your product? Are there new competitors?
Gathering Information
Assess what you already have available
If you need more… Stay as close to home as possible
Sales records Complaints Receipts Credit records
Ask your employees
MARKETING RESEARCH DATA
Secondary Data: Existing Data
Primary Data: New Data that is Compiled
Lower Cost More Expensive
May not be Specific Customized
Frequently Outdated Fresh, New
Available to Competitors
Proprietary
Already published material Trade associations
Direct mail Questionnaires Telephone or street surveys Panel studies Test marketing
Organizing and Interpreting Data
Prioritize the data with the most important on top What strategies are suggested? How can they be accomplished? How are they different from what I’m doing? What current activities should be increased? What current activities should be decreased
or dropped?
Making Decisions and Taking Action Prioritize each possible strategy from the
standpoint of: Immediate goal to be achieved Cost to implement Time to accomplish Measurements
Select those with the greatest impact Develop tactics to implement
Assess the Results
Analyze your progress measures Adjust if necessary At the conclusion..
Did you achieve your goal ? Should the decision be renewed or
expanded ?
COLOR ME HUNGRY?
•Marketing researchers found that American consumers associate red with energy, passion, speed, and hunger.
•Yellow suggests happiness and warmth; orange suggests playfulness, fun, affordability.
Surrounding customers with red, yellow, and orange encourages them to eat a lot quickly and leave.
A MAJOR MARKETING SHIFT: SOCIAL RESPONSIBILITY
Marketers have responded to social demands: Setting higher standards for environmentalism Abolishment of sweatshops Involvement in the community
Many companies have begun to employ green marketing GO GREEN Target consumers who buy based on their
convictions
A MAJOR MARKETING SHIFT: TECHNOLOGY
Technology has revolutionized marketing
Power has shifted from producers to consumers
Customers have 24/7 access to information
Marketers have an abundance of promotional opportunities
Companies can mass customize products for customers
Sales Forecast
Assess how the total market will perform What is the overall economic climate ?
Assess your performance and market share Will customers make decisions on the same
basis they have in the past ? How will your competitors perform
Will there be new competitors ? Will they introduce new products ? Will some competitors leave the market ?
Foundation Simulation
Customers
Product Questions:
What do the customers want? What are the characteristics of the product that
are important to customers? What is the most important product
characteristic• In the low tech segment?• In the high tech segment?
What is “perceived age” of a product? How is reliability measured? What will increase material costs?
Pricing Questions:
What do the customers want? What is the price range for low tech
products?
What is the high tech price range?
If Demand is greater than Supply, what is the impact on sensor prices?
If Supply is greater than Demand, what is the impact on sensor prices?
Promotional mix
You will invest money in a “promotion” budget and create “awareness”. It relates to your advertising efforts. The awareness you create is specific to a
single product. You will invest money in a “sales” budget
and create “access” to your products. Accessibility applies to the segment, not the
product Sales Budget is spent on distribution, order
entry, customer service, etc.