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*Chapter Thirteen
Marketing: Helping
Buyers Buy
Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin
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*What is Marketing?
• Marketing -- The activity, set of institutions and processes for creating, communicating, delivering, and exchanging offerings with value for customers, clients, partners, and society at large.
WHAT’S MARKETING?LG1
13-2
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*What is Marketing?
• Marketing today involves helping the buyer buy through:
- Websites that help buyers find the best price, identify product features, and question sellers.
FOCUS of CONTEMPORARY MARKETING
LG1
- Blogs and social networking sites that cultivate consumer relationships.
13-3
Evolution of Marketing
Source: Marketing, Grewal & Levy, 2009 *
The Evolution of Marketing
LG1
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*The Evolution of Marketing
• The general philosophy was “Produce what you can because the market is limitless.”
• After mass production, the focus turned from production to persuasion.
The PRODUCTION and SELLING ERAS
LG1
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*The Evolution of Marketing
• After WWII, a consumer spending boom developed.
• Businesses knew they needed to be responsive to consumers if they wanted their business.
The MARKETING CONCEPT ERA
LG1
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*The Evolution of Marketing
• The Marketing Concept includes three parts:
1. Customer Orientation -- Finding out what customers want and then providing it.
2. Service Orientation -- Making sure everyone in an organization is committed to customer satisfaction.
3. Profit Orientation -- Focusing on the goods and services that will earn the most profit.
APPLYING the MARKETING CONCEPT
LG1
13-7
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*The Evolution of Marketing
• Customer Relationship Management (CRM) -- Learning as much as you can about customers and doing what you can to satisfy or exceed their expectations.
• Organizations seek to enhance customer satisfaction building long-term relationships.
• Today firms like Priceline and Travelocity use CRM that allow customers to build a relationship with the suppliers.
The CUSTOMER RELATIONSHIP ERA
LG1
13-8
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• Nonprofit marketing tactics include:
NONPROFIT MARKETINGNonprofit Organizations and Marketing
LG1
- Fundraising
- Public Relations
- Special Campaigns
- Ecological practices
- Changing public opinions and attitudes
- Increasing organizational membership
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• Nonprofit marketing strategies include:
- Determine the firm’s goals and objectives.
- Focus on long-term marketing.
- Find a competent board of directors.
- Exercise strategic planning.
- Train and develop long-term volunteers.
- Carefully segment the target market.
MARKETING STRATEGIES for NONPROFITS
Nonprofit Organizations and Marketing
LG1
13-10
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Elements in the Marketing Mix
ProductProduct
Marketing Marketing ProgramProgram
Delivers Delivers ValueValue
PlacPlacee
PromotioPromotionn
Buy at Buy at Computers Computers
‘R Us‘R Us
PricePrice
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*Designing a Product to Meet Consumer Needs
• Product -- A good, service, or idea that satisfies a consumer’s want or need.
• Test Marketing -- Testing product concepts among potential product users.
• Brand Name -- A word, letter, or a group of words or letters that differentiates one seller’s goods from a competitor’s.
DEVELOPING a PRODUCT
LG2
13-12
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*Setting an Appropriate Price
• Pricing products depends on many factors:
- Competitors’ prices
- Production costs
- Distribution
- High or low price strategies
• Middlemen are important in place strategies because getting a product to consumers is critical.
PRICING and PLACING a PRODUCT LG2
13-13
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*Developing an Effective Promotional Strategy
• Promotion -- All the techniques sellers use to inform people about their products and motivate them to purchase those products.
• Promotion includes:
- Advertising
- Personal selling
- Public relations
- Viral marketing
- Sales promotions
PROMOTING the PRODUCT
LG2
13-14
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*Providing Marketers with Information
• Marketing Research -- Analyzing markets to determine challenges and opportunities, and finding the information needed to make good decisions.
• Research is used to identify products consumers have used in the past and what they want in the future.
• Research uncovers market trends and attitudes held by company insiders and stakeholders.
SEARCHING for INFORMATION
LG3
13-15
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*The Marketing Research Process
1. Defining the problem or opportunity and determining the present situation.
2. Collecting research data.
3. Analyzing the data.
4. Choosing the best solution and implementing it.
FOUR STEPS in the MARKETING RESEARCH PROCESS
LG3
13-16
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*Defining the Question and Determining the Present Situation
• What’s the present situation?
• What are the alternatives?
• What information is needed?
• How should the information be gathered?
DEFINING the PROBLEM or OPPORTUNITY
LG3
13-17
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*Collecting Data
• Secondary Data -- Existing data that has previously been collected by sources like the government.
COLLECTING SECONDARY RESEARCH DATA
LG3
• Secondary data incurs no expense and is usually easily accessible.
• Secondary data doesn’t always provide all the needed information for marketers.
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*Collecting Data
• Primary Data -- In-depth information gathered by marketers from their own research.
• Telephone, online and mail surveys, personal interviews, and focus groups are ways to collect primary data.
COLLECTING PRIMARY RESEARCH DATA
LG3
13-19
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*Collecting Data
• Focus Group -- A group of people who meet under the direction of a discussion leader to communicate opinions.
FOCUS GROUPS
LG3
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*Analyzing the Research Data
• Marketers must turn data into useful information.
• Must use their analysis to plan strategies and make recommendations.
ANALYZING the DATA and IMPLEMENTING the DECISION
LG3
• Finally, marketers must evaluate their actions and determine if further research is needed.
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• Analyze customer needs and satisfaction.
• Analyze current markets and opportunities.
• Analyze the effectiveness of marketing strategies.
• Analyze marketing process and tactics currently used.
• Analyze the reasons for goal achievement or failure.
KEY BENEFITS of MARKETING RESEARCH
LG3
Analyzing the Research Data
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• Conduct informal consumer surveys.
WAYS to FIND OUT WHAT CONSUMERS THINK
LG3
Analyzing the Research Data
• Host a customer focus group.
• Listen to competitor’s customers.
• Survey your sales force.
• Become a “phantom” customer.
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*The Marketing Environment
• Environmental Scanning -- The process of identifying factors that affect marketing success.
• Factors involved in the environmental scan include:
- Global factors
- Technological factors
- Sociocultural factors
- Competitive factors
- Economic factors
SCANNING the MARKETING ENVIRONMENT
LG4
13-24
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*The Marketing EnvironmentThe MARKETING ENVIRONMENT
LG4
13-25
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• Debra Wexler and Brian Gavin founded Whiteflash, an online diamond dealer.
• About 10,000 worldwide users visit their site each month.
• Wexler started a social marketing campaign and is planning an interactive website to help customers buy.
SOCIAL MARKETING GOES GLOBAL
(Reaching Beyond Our Borders)
13-26
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• Always be customer-focused.
• Benchmark against the best firms.
• Continuously improve performance.
• Develop the best value package.
• Empower your employees.
• Focus on relationship building.
• Goal achievement is the reward.
The ABC’s of MARKETING
LG4
The Marketing Environment
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*Two Different Markets: Consumer and B2B
• Consumer Market -- All the individuals or households that want goods and services for personal use and have the resources to buy them.
The CONSUMER and B2B MARKET
LG4
• Business-to-Business (B2B) -- Individuals and organizations that buy goods and services to use in production or to sell, rent, or supply to others.
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*The Consumer Market
• The size and diversity of the consumer market forces marketers to decide which groups they want to serve.
• Market Segmentation -- Divides the total market into groups with similar characteristics.
• Target Marketing -- Selecting which segments an organization can serve profitably.
MARKETING to CONSUMERS
LG5
13-29
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*Segmenting the Consumer Market
• Geographic Segmentation -- Dividing the market by cities, counties, states, or regions.
• Demographic Segmentation -- Dividing the market by age, income, education, and other demographic variables.
• Psychographic Segmentation -- Dividing the market by group values, interests, and opinions.
(continued)
SEGMENTING the CONSUMER MARKET
LG5
13-30
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*Segmenting the Consumer Market
• Benefit Segmentation -- Dividing the market according to product benefits the customer prefers.
• Volume (Usage) Segmentation -- Dividing the market by the volume of product use.
SEGMENTING the CONSUMER MARKET
(continued)LG5
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*Reaching Smaller Market Segments
• Niche Marketing -- Identifies small but profitable market segments and designs or finds products for them.
MARKETING to SMALL SEGMENTS
LG5
• One-to-One Marketing-- Developing a unique mix of goods and services for each individual consumer.
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*Moving Toward Relationship Marketing
• Mass Marketing -- Developing products and promotions to please large groups of people.
• Relationship Marketing-- Rejects the idea of mass production and focuses toward custom-made goods and services for customers.
MASS MARKETING vs. RELATIONSHIP MARKETING
LG5
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• Effective relationship marketing is built on:
• Open communication
• Consistently reliable service
• Staying in contact with customers
• Trust, honesty, and ethical behavior
• Showing that you truly care
KEYS to SUCCESSFUL RELATIONSHIP MARKETING
LG5
Moving Toward Relationship Marketing
13-34
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*The Consumer Decision-Making Process
1. Problem recognition
2. Search for information
3. Evaluating alternatives
4. Purchase decision
5. Postpurchase evaluation
STEPS in the CONSUMER DECISION-MAKING PROCESS
LG5
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*The CONSUMER DECSION MAKING
PROCESS AND OUTSIDE INFLUENCESLG5
The Consumer Decision-Making Process
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*The Business-to-Business Market
• Learning
• Reference Groups
• Culture
• Subcultures
• Cognitive Dissonance
KEY FACTORS in CONSUMER DECISION-MAKING
LG6
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*The Business-to-Business Market
• B2B marketers include:
- Manufacturers
- Wholesalers and retailers
- Hospitals, schools and charities
- Government
• Products are often sold and resold several times before reaching final consumers.
BUSINESS-to-BUSINESS MARKET (B2B)
LG6
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*The Business-to-Business Market
• There are relatively few customers.
• Customers tend to be large buyers.
• Markets are geographically concentrated.
• Buyers are more rational than emotional.
B2B MARKET DIFFERENCES
LG6
• Sales are direct.
• Promotions focus heavily on personal selling.
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Review Only
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*Profile
• Developed a system of clothes sizing called Fitlogic.
• Lee’s system standardizes sizes and provides flexibility.
• Though she has an excellent idea, Lee must market her product.
CRICKET LEEFitlogic
13-41
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• Lance Fried was an electrical engineer who went into business after he built a waterproof MP3 player.
FIND A NEED AND FILL ITSpotlight on Small Business
• Focused his marketing plan on small surf shops instead of large stores.
• Now, Fried attends trade shows and runs a website to help sell more products.
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*Progress Assessment
• Define the terms consumer market and business-to-business market.
• Name and describe five ways to segment the consumer market.
• What’s niche marketing and how does it differ from one-to-one marketing?
• What are four key factors that make B2B markets different from consumer markets?
PROGRESS ASSESSMENT
13-43
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*Progress Assessment
• What does it mean to “help the buyer buy?”
• What are the three parts of the marketing concept?
• What are the Four P’s of the Marketing Mix?
PROGRESS ASSESSMENT
13-44
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*Progress Assessment
• What are the four steps in the marketing research process?
• What’s environmental scanning?
• What factors are included in environmental scanning?
PROGRESS ASSESSMENT
13-45
