copyright © 2013 pearson education, inc. publishing...

Customer Driven Marketing

http://www.wileybusinessupdates.com

Copyright © 2013 Pearson Education, Inc.

Publishing as Prentice Hall

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Chapter 11

http://www.wileybusinessupdates.com/

Learning Objectives

Copyright (c) John Wiley & Sons, Inc.

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Define marketing.

Discuss the evolution of the marketing concept.

Describe not-for-profit marketing and nontraditional marketing.

Outline the basic steps in developing a marketing strategy.

Describe marketing research.

Discuss market segmentation.

Summarize consumer behavior.

Discuss relationship marketing.

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What is Marketing?

Copyright 2015 John Wiley & Sons, Inc.

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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.

What is Marketing?


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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.

How Marketing Creates Utility


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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 transfer of goods and

services from the seller to the buyer

Evolution of the Marketing Concept


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Emergence of the Marketing Concept


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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.

Not-for-Profit Marketing


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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.

Non-Traditional Marketing

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 particular

organization


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Marketing Plan


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The marketing plan is a key component of a firm’s 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.

Developing a Marketing Strategy

1. Study and analyze potential

target markets and choose

among them.

2. Create a marketing mix to

satisfy the chosen market.


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Selecting a Target Market


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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

Marketing Mix


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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 justifiable prices for the firm’s product offerings,

sometimes subject to government scrutiny.

Marketing Mix for International Markets


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Standardization - offering the same marketing mix in every market.

Adaptation - developing a unique marketing mix to fit each market’s

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.

Marketing Research


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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

http://www.nielsen.com/us/en.html?gclid=CLb__rTZqMACFUVwvAodyCUAWg





How Segmentation Works


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Market segmentation– the process of dividing a total market into

several relatively homogeneous groups to reach desirable target

markets.

Segmenting Consumer and Business Markets


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Segmenting Consumer Markets


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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 statements—people’s verbal descriptions of various attitudes, interests, and opinions

Product-Related Segmentation

Divides market based on buyer’s relationship to the good or service.

based on benefits sought by buyers, usage rates, and loyalty levels

http://www.strategicbusinessinsights.com/vals/presurvey.shtml

Demographic Segmentation


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Segmenting Business Markets


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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.

Determinants of Consumer Behavior


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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

Steps in Consumer Behavior Process


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Relationship Marketing


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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

Benefits of Relationship Marketing


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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.

Tools for Nurturing Customer Relationships


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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 Walgreen’s 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

https://www.walgreens.com/balancerewards/balance-rewards.jsp

One-to-One Marketing


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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.

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