marketing business 40 week 6 chapter 13 23 february, 2005
TRANSCRIPT
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Marketing
Business 40Week 6Chapter 1323 February, 2005
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Article – WSJ Nextel Why do you think Nextel's original walkie-talkie feature was so
successful, particularly with construction crews? See page 403- what do you think Nextel did?
Based on the information contained in the article, and your own personal observations, what are some of the major challenges involved with selling to the teen market? See page 417 – how do teens buy products?
Do you think Nextel is underestimating the challenge involved with selling to the teen market? Do you think it will be successful? Why or why not? See page 417 – do you think teens buy the way Nextel thinks
they will?
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What is Marketing?
Target MarketTarget Market
Market NeedsMarket Needs
Satisfy NeedsSatisfy Needs
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4 Ps: The Marketing Mix
ProductProduct
MarketinMarketing g
ProgramProgram
PlacePlace
PromotionPromotion
Buy at Buy at Computers Computers
‘R Us‘R Us
PricePrice
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Product Design
Concept Test Prototype Test Market Outsource Package Design/Brand Name
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Pricing (March 2nd)
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Promotion (March 9th)
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Place (Distribution)
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Uses of Market Research
Analyze Customer Needs/Satisfaction
Analyze Markets & Opportunities
Analyze Effectiveness of Strategy/Tactics
Analyze Goal Achievement
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Guidelines for Market Research
Clarify research objectives/stay on target.
Decide whether you will do the research or use a professional researcher.
Make certain questions are directed to objectives.
Ask for relevant information.
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Sources for Market Research Information
Secondary Data Company Records Gov’t Agencies Trade Associations Research Companies
Primary Data Surveys Observations Focus Groups
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Different Markets
Consumer- Niche- One-to-One
Business-to-Business (B2B)
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Consumer Market Segmentation (p. 413) Geographic Demographic Psychographic Benefit Volume
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What is happening by city?
http://www.census.gov
Percent of population by age bracket
0%
5%
10%15%
20%
25%
30%
<18 18-24 25-34 35-44 45-54 55-64 65-74 75-84 85+
Age bracket
Per
cen
t o
f to
tal Livermore, CA %
Berkeley, CA %
Ocala, FL %
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U.S. Buying Power*
$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000
Women
Disabled
Hispanics
African Americans
Gay Men/Lesbians
Asian Americans
Native Americans
In Million $In Million $
*Excludes senior citizens, as not all sources characterize them as a diversity market*Excludes senior citizens, as not all sources characterize them as a diversity market
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Urban Adult Spending Habits
0% 20% 40% 60% 80%
Prefer Designer Jeans
Enjoy Clothes Shopping
Keep Up With LatestFashion
Watch Pay-per-view
$75 on Shoes Last Year
All Adults
Urban Adults
Source: Simmons Market Research
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Buying Process
Step 1: Recognize ProblemStep 1: Recognize Problem
Step 2: Information SearchStep 2: Information Search
Step 3: Evaluate AlternativesStep 3: Evaluate Alternatives
Step 4: Make Purchase DecisionStep 4: Make Purchase Decision
Step 5: Postpurchase EvaluationStep 5: Postpurchase Evaluation
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Consumer Decision Making
P. 417
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Consumer Influences p. 417-418
LearningLearning
SubcultureSubculture
Reference Reference GroupGroup
Cognitive Cognitive DissonanceDissonance
CustomerCustomer
CultureCulture
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Break, Nascar Video
Watch for references to elements of: 1) Market Segmentation (p.413) 2) Consumer Influences (p.417)
Decide amongst yourselves how you’ll Break first? Later? Organize the tables for watching for specifics
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Business-to-Business (B2B) Segments
1. Number
2. Size
3. Geographic Concentration
4. Rational
5. Direct Sales
6. Personal Selling
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Tips: Successful Marketing in Small Organizations Identify your best
customers. Build lasting
relationships. Share your
customers with other businesses by developing strategic alliances.
Practice integrated marketing.
Know what makes your customers happy.
Personally thank your customers for support.
Stand out above the competition.
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Customer Relationship Management
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So why is this so important? (Bain & Company) research found that only 31
percent of online retail customers generate 65 percent of profits.
Other segments identified by the survey ("Casual Buyers," "Relationship Seekers," and "Bargain Hunters" are less profitable or even losing.
A 5 percent increase in customer loyalty can increase profitability by 40 percent to 95 percent
Why does loyalty matter so much to profits?
www.cyberatlas.com, Bain & Co
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Banking example
79.67%
24.82%15.83%
1.52%
-21.83%
-40.00%
-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
5% 11% 28% 28% 28%
Bank’sProfits
Customer segment
http://www.dbmarketing.com/
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How the Safeway Club built loyalty
http://www.dbmarketing.com/articles/Art144.htm
{Total grocery shopping
} Spent at Safeway
1st
20%2nd 20%
3rd 20%
4th 20%
5th 20%
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What they did… Segmented Secondary Shoppers
Did most of their shopping elsewhere Were sent coupon for a manufacturer-sponsored item (i.e.free
Dannon Yogurt) Received a $1 off coupon for anything in meat or produce (if they
did not shop heavily there). Changing customer behavior, by getting people to visit store
departments that they had not previously shopped. Primary Shoppers
“Maxed out”- no point in giving them extra discounts So, they got a $1 off in the cookie department. But, if you give $1 off to good customers who had not previously
bought cookies, it generates incremental revenue.
http://www.dbmarketing.com/articles/Art144.htm
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More of what they did… Newsletter - Food Sense, contained tips and recipes. Targeted inserts
“Peanut butter conversion series“ to Jif, Skippy users Month 1, 2 – Articles on Safeway PB, how made Month 3 – “Stock up" offer - $1 off any two jars Month 4 – “Cross sell" $0.50 off Safeway jelly
Card, free ice cream on the customer’s birthday
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Best practices
Easy to use Provide immediate rewards Have value that is worth it from the
customer’s perspective Be targeted to customers whose behavior
your are trying to change Be limited to what you can afford to spend Have a published exit strategy
http://www.dbmarketing.com/articles/Art144.htm
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Market Stakeholders of Business
Employees
Stockholders
Creditors
Suppliers
Customers
Distributors, Wholesalers,
Retailers Business Firm
See Figure 1.2 on page 8
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Nonmarket Stakeholders of Business
Communities
Governments
Activist Groups
Media
Business Support Groups
General Public
Business Firm
See Figure 1.3 on page 9
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Customer Relationship Management 80/20 Rule Software
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Next week: Chapter 14 Papers are due on March 16th
How are they coming? Midterm is also on March 16th
Open book, open note Might be a case you’ve already seen