Marketing Management 1st

7/28/2019 Marketing Management 1st

1/57

*

*

*

13-1

Evolution of Marketing Production Era - Up to early 1900s

Selling Era - 1920s-1950s

Marketing Concept Era - 1950s -

1980s Customer

Service

Profit

Customer Relationship Era - 1990s+


2/57

*

*

*

13-2

I. WHAT IS MARKETING?

Learning goal 1

Definemarket ing

and explain how the marketing

concept applies in both for-profit and nonprofit

organizations.

The Evolution of the Field of Marketing

The Production Era

The Selling Era

The Marketing Concept Era

The Customer Relationship Era

Nonprofit Organizations and Marketing


3/57

*

*

*

13-3

Describe the marketing research process, and explain

how marketers use environmental scanning to learn

about the changing marketing environment.

The Marketing Research Process

The Marketing Environment

Global Factors

Technological Factors

Sociocultural Factors

Competitive FactorsEconomic Factors

Two Different Markets: Consumer and

Business-to-Business (B2B)


4/57

*

*

*

13-4

Marketing Process1. Find Opportunity

2. Conduct Research

3. Identify Target

Market

4. Design Product

5. Product Testing

6. Brand Name, Design

& Price

7. Develop Distribution

System

8. Design Promotional

Program

9. Build RelationshipWith Customer


5/57

*

*

*

13-5

III. THE CONSUMER MARKET

Learning goal 4

Explain how marketers meet the needs of the consumer

market through market segmentation, relationshipmarketing, and the study of consumer behavior.

Segmenting the Consumer Market

Reaching Smaller Market Segments

Moving toward Relationship MarketingForming Communities of Buyers

The Consumer Decision-Making Process


6/57

*

*

*

13-6

IV. THE BUSINESS-TO-BUSINESS MARKET

Learning goal 5

List ways in which the business-to-business marketdiffers from the consumer market.


7/57

*

*

*

13-7

WHAT IS MARKETING?

Learning goal 1

Define market ingand explain how the marketing

concept drives both for-profit and nonprofit

organizations.

MARKETING

is the process of planning and executing theconception, pricing, promotion, and distribution of

goods and services to facilitate exchanges that

satisfy individual and organizational objectives.

Selling and advertising are only part of marketing.Marketing activities depend on what needs to be done to

fill customers needs.


8/57

*

*

*

13-8

THE EVOLUTION OF THE FIELD OF MARKETING

THE PRODUCTION ERA

Until the early 1900s, the general philosophy was toproduce as much as you can because there is a

limitless market.

The goals of business

CENTERED ON PRODUCTION.

The greatest marketing need was for distribution and

storage.

THE SELLING ERABy the 1920s, the business philosophy turned to an

EMPHASIS ON SELLING AND ADVERTISING to sell

existing products.


9/57

*

*

*

THE MARKETING ERA

The BABY BOOM after WWII created a tremendous

demand for goods and services.

If they wanted to get their business, businesses had to

be

RESPONSIVE TO CONSUMERS.

The MARKETING CONCEPT emerged in the 1950s.

13-9


10/57

*

*

*

13-10

The Marketing EnvironmentEconomic

Social

Technology

Global

CustomerCompetitive


11/57

*

*

*

The MARKETING CONCEPT

is a three-part business philosophy:

A CUSTOMER ORIENTATION: Find out what consumers

want and provide it.

A SERVICE ORIENTATION: Make sure everyone in theorganization has the same objectiveCUSTOMER

SATISFACTION.

A PROFIT ORIENTATION: Focus on those goods and

services that will earn the most profit.

During the 1980s, business began to apply the marketing

concept more aggressively.

13-11


12/57

*

*

*

THE CUSTOMER RELATIONSHIP ERA

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

is the process of learning as much as possible about

customers and doing everything you can to satisfythemor even exceed their expectationswith goods

and services over time.

The goal is to enhance customer satisfaction andstimulate long-term customer loyalty.

NONPROFIT ORGANIZATIONS AND MARKETING

Marketing is a crucial part of almost all organizations,profit and nonprofit.

Charities, churches, politicians, states, and many other

organizations all use marketing.

13-12


13/57

*

*

*

THE MARKETING MIX

Learning goal 2

List and describe the four Ps of marketing.

Pleasing customers has become a priority.

The FOUR FACTORS OF MARKETING are:

Product

Price

Place

Promotion

CONTROLLABLE PARTS of the marketing process

involve:Designing a want-satisfying PRODUCT

Setting a PRICE for the product

Placing the product in a PLACE where people will buy it

PROMOTING the product 13-13


14/57

*

*

*

13-14

Elements in the Marketing MixProduct

MarketingProgram

Place

Promotion

Buy at

Computers

R Us

Price


15/57

*

*

*

These four factors have become known as the

MARKETING MIX

the ingredients that go into a marketing program:

product, price, place, and promotion.APPLYING THE MARKETING PROCESS

To present an overview of the marketing process, the text

takes a hypothetical vegetarian restaurant through

THE MARKETING PROCESS.

The process involves:

Recognizing a need

researching the marketIdentifying the TARGET MARKET

The text u ses the example of a start-up vegetar ian

restaurant, Very Vegetarian.

13-15


16/57

*

*

*

DESIGNING A PRODUCT TO MEET NEEDS

First, develop a product to fill the identified need.

A PRODUCT

is any physical good, service, or idea that satisfies awant or need plus anything that would enhance the

product in the eye of consumers, such as the brand.

The next step is CONCEPT TESTING

developing an accurate description of your productand asking people whether or not the concept (the idea

of the cereal) appeals to them.

TEST MARKETING

is the process of testing products among potentialusers.

Next, decide which brand names should be offered to

attract customers.

13-16


17/57

*

*

*

13-17

Product Design Concept Test

Test Market Package Design/Brand Name


18/57

*

*

*

13-18

A BRAND NAME

is a word, letter, or group of words or letters that differentiates

one sellers goods and services from those of competitors.

These steps create

THE FIRST PPRODUCT.

SETTING AN APPROPRIATE PRICE(the second P)The price depends on a number of factors, such as the price of

competing restaurants.

You also have to consider the costs of producing, distributing,

and promoting the product.


19/57

*

*

*

13-19

GETTING THE PRODUCT TO THE RIGHT PLACE

(the third P)

Once the product is manufactured, you have to decide how toget it to the consumer.

You may want to sell your product through

INTERMEDIARIES, (MARKETING MIDDLEMEN,)organizations that specialize in distributing goods from

producer to customer.

DEVELOPING AN EFFECTIVE

PROMOTIONAL STRATEGY (the fourth P)

*


20/57

*

*

*

PROMOTION

consists of all the techniques sellers use to

motivate people to buy products or services.

RELATIONSHIP BUILDING

WITH CUSTOMERS

includes responding to any suggestions they

may make to improve the product or the

marketing of the product.

13-20

*


21/57

*

*

*

13-21

Marketing is an ONGOING PROCESS; companies

must continually adapt to changes in the market.

Listening to customers is the key to marketing.

PROVIDING MARKETERS WITH INFORMATION

Learning goal 3

Describe the marketing research process, and

explain how marketers use environmental scanning

to learn about the changing marketing environment.

*


22/57

*

*

*

13-22

MARKETING RESEARCH

is the analysis of markets to determine opportunities and

challenges, and to find the information needed to make good

decisions.

One goal is to determine exactly what consumers want and

need, now and in the future.

Businesses need information to compete effectively, and

MARKETING RESEARCH

is the activity that gathers that information.

In addition to customers, marketers should pay attention to the

views of employees, shareholders, consumer advocates, andother stakeholders.

*


23/57

*

*

*

13-23

THE MARKETING RESEARCH PROCESS

STEP 1.

Defining the problem and determining the present situation

STEP 2.

Collecting dataResearch can be quite expensive, so SOME TRADE-OFF must

be made between information needed and the cost.

*


24/57

*

*

*

Less expensive is SECONDARY DATA,

information that has already been published

previously by others and published in journals and

books or made available online.Often, secondary data dont provide all the

necessary information, so marketers must do their own

research.

The result of new studies is PRIMARY DATA , data that

you gather yourself (not from secondary sources such

as books and magazines.)

Despite its name, secondary data should be gathered first

as it is the least expensive.

Telephone surveys, online surveys, mail surveys, and

personal interviews are the most common methods of

gathering survey information.

13-24

*


25/57

*

*

*

13-25

Sources for MarketingResearch InformationSecondary Data

GovernmentPublications

CommercialPublications

Magazines

Newspapers

Internal/GeneralSources

Primary Data

Surveys

Focus groups

Interviews Observation

Online surveys

Questionnaires Customer comments

*


26/57

*

*

*

A FOCUS GROUP

is of a small group of people who meet under the

direction of a discussion leader to communicate their

opinions about an organization, its product, or othergiven issues.

Marketers can now gather both secondary and primary

data online.

STEP 3.

Analyzing the research data

The data collected must be turned into useful

information.

Careful, honest interpretation of the data can reveal

specific marketing challenges.

13-26

*


27/57

*

*

*

STEP 4.

Choosing the best solution and implement it

Researchers determine ALTERNATIVE STRATEGIES

and make recommendations as to which strategy maybe best.

The actions taken should be FOLLOWED UP to see if

results were as expected.

Consumers are demanding more ethical behavior fromcompanies.

THE MARKETING ENVIRONMENT

ENVIRONMENTAL SCANNINGis the process ofidentifying the factors that can affect marketing

success

13-27

*


28/57

*

*

*

13-28

Market Research Process Define the Question

Collect Data

Analyze the data

Choose the best solution and

implement

*


29/57

*

*

*

GLOBAL FACTORS

The most important global change today is the growth of the Internet.

Globalization has also put pressure on companies that deliver

products.

TECHNOLOGICAL FACTORS

include the Internet, the growth of consumer databases, flexible

manufacturing, and mass customization.

SOCIOCULTURAL FACTORS

include population growth and changing demographics, such as

the aging population and the preferences of various ethnic

groups.

13-29

*


30/57

*

*

*

COMPETITIVE FACTORS

Brick-and-mortar companies must adjust to new competition from

the Internet.

They have to adapt to competitors, who can deliver products quickly

or provide excellent service.

ECONOMIC FACTORS

Marketers must pay close attention to the economic environment

in the U.S. and globally.

13-30

*


31/57

*

*

*

TWO DIFFERENT MARKETS: CONSUMER AND

BUSINESS-TO-BUSINESS (B2B)

THERE ARE TWO MAJOR MARKETS:

The CONSUMER MARKETconsists of all the individualsor households that want goods and services for

personal consumption or use.

The BUSINESS-TO-BUSINESS (B2B) MARKETconsistsof all the individuals and organizations that want goods

and services to use in producing other goods and

services or to sell, rent, or supply goods to others

(traditionally called INDUSTRIAL GOODS.)

The buyers REASON FOR BUYING and the END USE

of the product determine whether it is considered a

consumer product or a B2B product.

13-31

*


32/57

*

*

*

13-32

Business-to-Business (B2B)1. Number

2. Size

3. GeographicConcentration

4. Rational

5. Direct Sales

6. Personal Selling

*


33/57

*

*

*

THE CONSUMER MARKET

Consumer groups differ greatly in age, education level,

income, and taste.

Marketers must first decide which group to serve andthen develop products and services specially tailored

to their needs (as Campbel l Soup Company does.)

MARKET SEGMENTATIONis the process of dividing the total market into groups

whose members have similar characteristics.

TARGET MARKETINGis marketing directly toward those groups (market

segments) an organization decides it can serve profitably.

13-33

*


34/57

*

*

*

SEGMENTING THE CONSUMER MARKET

Learning goal 4

Explain how marketers meet the needs of the consumer

market through market segmentation, relationshipmarketing, and the study of consumer behavior.

GEOGRAPHIC SEGMENTATION

is dividing the market by geographic area.

DEMOGRAPHIC SEGMENTATIONis dividing the market by age, income, and education

level.

PSYCHOGRAPHIC SEGMENTATION

is dividing the market using the groups values,attitudes, and interests.

BENEFIT SEGMENTATION

is dividing the market by determining which benefits of

the product to talk about.13-34

*


35/57

*

*

*

13-35

Market Segmentation Target Marketing

Geographic

Demographic Psychographic

Benefit

Volume

*


36/57

*

*

VOLUME, OR USAGE, SEGMENTATIONis

dividing the market by usage (volume of use.)

The best segmentation strategy is to USE ALL THE

VARIABLES to come up with a consumer profile thats

sizable, reachable, and profitable.

REACHING SMALLER MARKET SEGMENTS

NICHE MARKETING

is the process of finding small but profitable market

segments and designing custom-made products for

them.

ONE-TO-ONE MARKETING

means developing a unique mix of goods and servicesfor each individual customer.

This is easier to do one-to-one marketing in B2B markets,

but is becoming possible in consumer markets as well.

13-36

*


37/57

*

*

13-37

Different Markets Consumer

Niche

One-to-One

Business-to-

Business (B2B)

*


38/57

*

*

MOVING TOWARD RELATIONSHIP MARKETING

MASS MARKETINGmeans developing products and

promotions to please large groups of people.

The mass marketer tries to sell products to as many

people as possible.

That means using mass media, such as TV, radio, and

newspapers.

RELATIONSHIP MARKETINGis a marketing strategy with

the goal of keeping individual customers over time by

offering them products that exactly meet their

requirements.

RELATIONSHIP MARKETING moves away from massproduction toward CUSTOM-MADE GOODS.

13-38

*


39/57

*

*

13-39

Pricing Strategies Cost-Plus

Value-Based

Competitive

Going-Rate

Skimming

Discount

Loss-Leader

Psychological

Source: Perdue University, May 2005

*


40/57

*

*

13-40

Influences onConsumer BehaviorCulture

Subculture

ReferenceGroup

Cognitive

Dissonance

CustomerLearning

*


41/57

*

*

13-41

SOCIOCULTURAL INFLUENCES

such as reference groups and culture

Consumer behavior is also influenced by other factors:

LEARNINGinvolves changes in an individuals behavior resulting from

previous experiences and information.

A REFERENCE GROUP

is the group that an individual uses as a reference point information of his or her beliefs, attitudes, values, or behavior.

CULTURE

is the set of values, attitudes, and ways of doing things that

are transmitted from one generation to another in a given

society.

.

*


42/57

*

*

13-42

SUBCULTURE

is the set of values, attitudes, and ways of doing things that

results from belonging to a certain group with which one

closely identifies.COGNITIVE DISSONANCE

is the type of psychological conflict that can occur after a

purchasesuch as doubts about whether they got the best

product at the best price.

*


43/57

*

*

The latest in TECHNOLOGY enables sellers to work with

buyers to determine their individual wants and needs

and to develop goods and services specifically

designed for those individuals.

One-way messages in mass media are replaced by a

personal dialogue among participants.

The text uses two examp les: serv ice f i rms such asair l ines, rental car com panies, and hotels; and the Hard

Rock Caf.

THE CONSUMER DECISION-MAKING PROCESSStudying consumer behavior centers on studying the

CONSUMER

13-43

*


44/57

*

*

PURCHASE DECISION PROCESS:

Problem recognition

Information search

Evaluate alternatives

Make purchase decision

Postpurchase evaluation

Consumer behavior researchers also study the various

INFLUENCES THAT IMPACT CONSUMER BEHAVIOR.

MARKETING MIX VARIABLES (the four Ps)PSYCHOLOGICAL INFLUENCES such as perception and

attitudes

SITUATIONAL INFLUENCES such as the type of purchase

and physical surroundings 13-44

*


45/57

*

*

13-45

Several factors make

BUSINESS-TO-BUSINESS MARKETING

DIFFERENT NUMBER:There are relatively FEW CUSTOMERS compared to the

consumer market.

SIZEThough few in number, industrial customers are relatively

VERY LARGE.

* GEOGRAPHICALLY CONCENTRATED


46/57

*

*

13-46

GEOGRAPHICALLY CONCENTRATED:

B2B markets tend to be CONCENTRATED in certain areas of

the country.

RATIONAL

Business buyers are generally MORE RATIONAL in their

purchase decisions.

DIRECTB2B sales tend to be DIRECT.

PERSONAL SELLING

There is much more emphasis in personal selling than in theconsumer market.

YOUR PROSPECTS IN MARKETING

There is a wider variety of careers in marketing than in most

business areas.

*


47/57

*

*

13-47

Marketing Strategies inNon-Profit Organizations Find a productive

board of trustees(Directors)

Make marketingthe focus; notshort-term sales

Know yourmission andreview missionstrategy regularly

Practice strategicplanning

Carefully segmenttarget market

Train & developvolunteers forlong-term

Be frugal- knowhow to managefinances

*


48/57

*

*

13-48

Where They GotTheir Names Taco Bell Glen Bell

Days Inn Cecil Day Bose Corp Amar Bose

Ty Inc. Ty Warner

Bristol-Myers William Bristol& John Myers

Source: World Features Syndicate

Founder(s)

*


49/57

*

*

13-49

Other Things To KeepIn Mind With Price Payment Period

Allowances

Regular

Seasonal

Bundling

Trade Discounts

Price Flexibility Credit Terms

Price Differences

Target Customers

Geographic Areas

Volume Discountsand Wholesale

Pricing

Cash and Early Pmt

Discount


*


50/57

*

*

13-50

Place Decisions Direct Sales

Reseller Sales

Market Coverage

Intensive

Selective

Exclusive

Inventory Size

Logistics


*


51/57

*

*

13-51

Advertising Mascots Meow Mix Cat 35 years

Tony the Tiger 54 years

Toucan Sam 45 years Geoffrey the Giraffe 35 years

Coca-Cola Polar Bears 13 years

MGM Lion 78 years

Source: World Feature Syndicate

*


52/57

*

*

13-52

Marketing Data:Least Error Method1. Put someone in charge.

2. Give everyone a method of collecting

data.3. Identify the right data.

4. Centralize the data.

5. Use the Data.

Source: cmomagazine.com, September 2004

*


53/57

*

*

13-53

Why Should YouMarket To Women? Women control 80% of all household

spending.

Women purchase 81% of all products and

services manufactured. 80% of all checks written are signed by

women.

85% of all automobile purchases areinfluenced by women.

In 2005, 4.7 Million women were self-employed.

Source: St. Louis Small Business Monthly, May 2004

*


54/57

*

*

13-54

Consumer Decision MakingMarketing mix

Product

Price

Place

Promotion

Psychological

Perception

Attitudes

Learning

Motivation

Situational

Type of Purchase

Social surroundings

Physical surroundings

Previous experience

SocioculturalReference groups

Family

Social class

CultureSubculture

Decision-Making Process

Problem Recognition

Information SearchAlternative evaluation

Purchase decision

Postpurchase evaluation

(cognitive dissonance)

*


55/57

*

*

13-55

Planning ForMore Business What do we do well-and not do well?

What are we really selling?

To whom do we sell?

How do we reach our target group?

How can we break through the clutter?

Source: Investors Business Daily, February 9, 2004

*


56/57

*

*

13-56

Business-to-ConsumerE-Commerce as % of Sales

0.00% 0.50% 1.00% 1.50% 2.00% 2.50%

2005

2004

2003

2002

2001

2000

Source: U.S. Census, May 18, 2006; http://home.earthlink.net/~lindberg_b/GECGrwth.htm, accessed August 5, 2006

*


57/57

*

*

Top Marketing Tactics ofSmall Businesses

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Web Sites Search Engine

Keywords

Community

Relations

Public

Relations/Media

Coverage

E-mail Marketing Direct Marketing

Documents

Marketing Management 1st