Part 5 Marketing: Developing Relationships

Transcription

1 Part 5 Marketing: Developing Relationships 2016 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.

2 11-2 CHAPTER 11 Customer-Driven Marketing CHAPTER 12 Dimensions of Marketing Strategy CHAPTER 13 Digital Marketing and Social Networking

3 11-3 Learning Objectives LO 11-1 Define marketing and describe the exchange process. LO 11-2 Specify the functions of marketing. LO 11-3 Explain the marketing concept and its implications for developing marketing strategies. LO 11-4 Examine the development of a marketing strategy, including market segmentation and marketing mix. LO 11-5 Investigate how marketers conduct marketing research and study buying behavior. LO 11-6 Summarize the environmental forces that influence marketing decisions. LO 11-7 Assess a company s marketing plans, and propose a solution for resolving its problem.

4 11-4 Nature of Marketing Marketing A group of activities designed to expedite transactions by creating, distributing, pricing, and promoting goods, services, and ideas Create value by allowing individuals and organizations to obtain what they need and want Other functional areas of the business (operations, finance, and all areas of management) must be coordinated with marketing decisions Marketing is not: Manipulating consumers to get them to buy products they do not want Just selling and advertising

5 11-5 The Exchange Relationship Exchange The act of giving up one thing (money, credit, labor, goods) in return for something else (goods, services, or ideas) Each participant must be willing to give up his or her respective something of value to receive the something held by the other The tangible product itself may not be as important as the image or the benefits associated with the product This intangible something of value may be: Capability gained from using a product The image evoked by it The brand name

6 11-6 The Exchange Process: Giving Up One Thing in Return for Another

7 11-7 Digital Communication with Customers Companies find that communicating with customers through digital media sites can enhance customer relationships and create value for their brands

8 11-8 Functions of Marketing Buying Risk Taking Selling Marketing Research Marketing Activities Transporting Financing Storing Grading

9 11-9 Creating Value with Marketing Value A customer s subjective assessment of benefits relative to costs in determining the worth of a product Customer Value = Customer Customer Benefits Costs Benefits Anything a buyer receives in an exchange Costs Anything a buyer must give up to obtain the product s benefits Monetary costs and time and effort expended to procure the product

10 11-10 Customer Benefits Customer benefits include anything a buyer receives in an exchange Hotels and motels Basically provide a room with a bed and bathroom Each firm provides different levels of service, amenities, and atmosphere to satisfy guests Hampton Inn offers the minimum services necessary to maintain a quality, efficient, low-price overnight accommodation Ritz-Carlton provides every imaginable service a guest might desire and strives to ensure that all service is of the highest quality Customers judge which type of accommodation offers them the best value According to the benefits they desire and their willingness and ability to pay for the cost associated with the benefits

11 11-11 The Marketing Concept Marketing Concept The idea that an organization should try to satisfy customers needs through coordinated activities that also allow it to achieve its own goals A business must find out what consumers desire and then develop the good, service, or idea that fulfills their needs or wants The business must then get the product to the customer The business must continually alter, adapt, and develop products to keep pace with changing consumer needs and wants

12 11-12 The Marketing Concept (cont.) Determining customer s needs is difficult because no one fully understands what motivates people to buy things Although customer satisfaction is the goal of the marketing concept, a business must also achieve its own objectives To implement marketing concept, a firm must have good information about what consumers want and adopt a consumer orientation Coordinate its efforts throughout the entire organization; otherwise, it may be awash with products the customers do not want or need All in the firm who interact with customers are selling ideas, benefits, philosophies, and experiences not just goods and services

13 11-13 Trader Joe s Trader Joe s, which sells many different lines of organic and natural food products, is often thought to have better deals than some of its competitors The grocery chain attempts to meet consumer demands for high-quality food at reasonable prices

14 11-14 Evolution of the Marketing Concept Our society and economic system have changed over time, and marketing has become more important as markets have become more competitive Production orientation 19 th century Manufacturing efficiency Sales orientation Early 20 th century Supply exceeds demand; a need to sell products grew

15 11-15 The Market Orientation Today some people still inaccurately equate marketing with a sales orientation Market Orientation An approach requiring organizations to gather information about customer needs, share that information throughout the firm, and use that information to help build long-term relationships with customers Began in the 1950s and continues today New technologies are helping firms to improve communication and learn what customers want

16 11-16 Meeting Consumers Needs o Trying to assess what customers want, which is difficult to begin with, is further complicated by the rate at which trends, fashions, and tastes can change More efficient & less expensive for the firm to retain existing customers Than to find new customers o The Nissan Leaf meets the needs of consumers who care about the environment and wish to improve their environmental footprint by driving an electric vehicle

17 11-17 Developing a Marketing Strategy Marketing Strategy A plan of action for developing, pricing distributing, and promoting products that meet the needs of specific customers Has two major components: Selecting a target market Developing an appropriate marketing mix to satisfy that target market

18 11-18 Business to Business (B2B) Markets Depending on the type of business you work for, other businesses can be your customer Businesses buy products to resell, use in the production of other products, or for use in operations While the marketing concepts are the same for both businesses and consumers, there are complexities to the business market that need to be considered Customer populations in the business market are smaller than in the consumer market, products tend to be highly technical as does the buyer, and how the product affects the rest of the businesses marketing channel are all important characteristics of the business market Businesses also tend to buy in larger quantities than consumers and long-term relationships are seen as necessary

19 11-19 Selecting a Target Market Market A group of people who have a need, purchasing power, and the desire and authority to spend money on goods, services, and ideas Target Market A specific group of consumers on whose needs and wants a company focuses its marketing efforts Total-Market Approach An approach whereby a firm tries to appeal to everyone and assumes that all buyers have similar needs Sellers of salt, sugar, and many agricultural products use a total-market approach because everyone is a potential consumer of these products

20 11-20 Market Segmentation and Market Segment Market Segmentation A strategy whereby a firm divides the total market into groups of people who have relatively similar product needs Market Segment A collection of individuals, groups, or organizations who share one or more characteristics and thus have relatively similar product needs and desires Women are the largest market segment, with 51% of the U.S. population Marketers are focusing on the growing Hispanic population

21 11-21 Target Market Strategies Marketing managers may define a target market as a relatively small number of people within a larger market, or they may define it as the total market

22 11-22 Market Segmentation Approaches Concentration Approach A market segmentation approach whereby a company develops one marketing strategy for a single market segment Porsche directs all its marketing efforts toward high-income individuals who want to own high-performance vehicles Multisegment Approach A market segmentation approach whereby the marketer aims its efforts at two or more segments, developing a marketing strategy for each Raleigh bicycles has designed separate marketing strategies for racers, tourers, commuters, and children

23 11-23 Niche Marketing Niche Marketing Is a narrow market segment focus when efforts are on one small, well-defined group that has a unique, specific set of needs Niche segments are usually very small compared to the total market for the product Many airlines cater to first-class flyers, who comprise only 10% of international air travelers To meet the needs of these elite customers, airlines include special perks along with spacious seats

24 11-24 Successful Approach to Market Segmentation For a firm to successfully use a concentration or multisegment approach to market segmentation: 1. Consumers needs for the product must be heterogeneous 2. The segments must be identifiable and divisible 3. The total market must be divided in a way that allows estimated sales potential, cost, and profits of the segments to be compared 4. At least one segment must have enough profit potential to justify developing and maintaining a special marketing strategy 5. The firm must be able to reach the chosen market segment with a particular market strategy

25 11-25 Bases for Segmenting Markets Companies segment markets on the basis of several variables: Demographic Geographic Psychographic Behavioristic

26 11-26 Developing a Marketing Mix Marketing Mix The four marketing activities product, price, promotion, and distribution that the firm can control to achieve specific goals within a dynamic marketing environment The buyer or the target market is the central focus of all marketing activities

27 11-27 The Marketing Mix: Product, Price, Distribution, and Promotion

28 11-28 Product A product whether a Good A physical entity you can touch (a car, computer, or adopted kitten) Service The application of human and mechanical efforts to people or objects to provide intangible benefits to customers (Air travel, dry cleaning, or haircuts) Idea Can be a concept, philosophy, image, or issue (attorney advise or political parties) Is a complex mix of tangible and intangible attributes that provide satisfaction and benefits

29 11-29 Price Price A value placed on an object exchanged between a buyer and a seller The buyer usually exchanges purchasing power income, credit, wealth for the satisfaction of utility associated with a product Key element of the marketing mix because it relates directly to the generation of revenue and profits Can be changed quickly to stimulate demand or respond to competitors actions

30 11-30 Distribution Distribution Making products available to customers in the quantities desired Sometimes referred to as place because it helps to remember the marketing mix as the 4 Ps Product, price, place, and promotion Intermediaries usually wholesalers and retailers perform many of the activities required to move products efficiently from producers to consumers or industrial buyers Involves transporting, warehousing, materials handling, inventory control, packaging, and communication

31 11-31 Promotion Promotion A persuasive form of communication that attempts to expedite a marketing exchange by influencing individuals, groups, and organizations to accept goods, services, and ideas Includes advertising, personal selling, publicity, and sales promotion Digital advertising on websites and social media sites are growing

32 11-32 Expeditionary Marketing Expeditionary marketing is a strategy that both small and large companies use to find untapped markets In the case of a startup, The goal is to find emerging markets where there is little competition, design a product for that market, and establish themselves as a leader For more established businesses, both large and small, the goal of expeditionary marketing is to find new areas for growth in markets that are small but growing Internal and external research is done to find markets that are complementary to the skills of the company and the needs of the market, as is extensive planning for new products or services

33 11-33 Marketing Research Marketing Research A systematic, objective process of getting information about potential customers to guide marketing decisions Guides marketing decisions May include data on age, income, ethnicity, educational level, etc. of the target market and how frequently they purchase the product Vital because the marketing concept cannot be implemented without information about customers

34 11-34 Marketing Information Systems Marketing information system A framework for accessing information about customers from sources both inside and outside the organization Inside the organization Continuous flow of information on prices, sales, and expenses Outside the organization Data are available through public and private reports, census statistics, digital media sources, etc.

35 11-35 Primary and Secondary Data Primary Data Marketing information that is observed, recorded, or collected directly from respondents Mystery shoppers, surveys, and focus groups Passive observation of consumer behavior and open-ended questions techniques Secondary Data Information that is compiled inside or outside an organization for some purpose other than changing the current situation Information compiled by the U.S. Census Bureau and other government agencies, databases created by marketing research firms, as well as sales and other internal reports

36 11-36 Online Marketing Research New information technologies are changing how businesses learn about consumers and market their products Digital media and online social networks Opportunity to reach new markets via the Internet Online surveys are becoming an important part of marketing research Virtual testing Interactive multimedia research that combines sight, sound, and animation to improve testing of products and their features

37 11-37 Buying Behavior Buying Behavior The decision processes and actions of people who purchase and use products Marketers analyze buying behavior because a firm s marketing strategy should be guided by an understanding of buyers Both psychological and social variables are important to an understanding of buying behavior

38 11-38 Psychological Variables of Buying Behavior Perception The process by which a person selects, organizes, and interprets information received from his or her senses Motivation Inner drive that directs a person s behavior toward goals Learning Changes in a person s behavior based on information and experience Attitude Knowledge and positive or negative feelings about something Personality The organization of an individual s distinguishing character traits, attitudes, or habits

39 11-39 Social Variables of Buying Behavior Social Roles A set of expectations for individuals based on some position they occupy Reference Groups Groups with whom buyers identify and whose values or attitudes they adopt Social Classes A ranking of people into higher or lower positions of respect Culture The integrated, accepted pattern of human behavior, including thought, speech, beliefs, actions, and artifacts

40 11-40 Understanding Buying Behavior Trying to understand consumers is the best way to satisfy them Tools and techniques for analyzing consumers are not exact McDonald s decided to go focus more on Millennials because they are the most profitable Millennials spend $247 billion annually on restaurants McDonald s has made changes to emphasize trends among Millennials Renovated its restaurants to look more modern Added more customized menu options Improved the nutritional value of some of its products

41 11-41 The Marketing Environment External forces directly or indirectly influence the development of marketing strategies: Political, legal, and regulatory forces Social forces Competitive and economic forces Technological forces Marketing requires creativity and consumer focus because environmental forces can change quickly and dramatically

42 11-42 Social Concerns Force Businesses to Climate Rethink change, global Marketing warming, and Strategies the impact of carbon emissions on out environment have been social concerns are causing businesses to rethink marketing strategies Governments have instituted stricter laws of greenhouse gas emissions U.S. government has mandated that by 2025 vehicles must be able to reach 54.5 miles per gallon General Motors and others are investigating ways to make cars more fuel-efficient without significantly raising price These laws are introducing opportunities for new products Concern over the environment are encouraging automobile companies to release electric cars Chevrolet Volt and Nissan Leaf

43 11-43 The Marketing Mix and the Marketing Environment

44 11-44 Importance of Marketing to Business and Society Marketing is a necessary function to reaching consumers, establishing relationships, and driving sales Marketing is essential in communicating the value of products and services Nonprofits, government institutions, and even people must market themselves to spread awareness and achieve desired outcomes All organizations must reach their target markets, communicate their offerings, and establish high-quality services

45 11-45 Solve the Dilemma Will It Go? Ventura Motors makes midsized and luxury automobiles in the United States Success of two-seat sports cars like the Mazda RX-8 started company evaluating market for two-seat sports cars priced midway between moderate & luxury market Research found significant demand Venture needed to act fast to take advantage of this market opportunity Designed, engineered, & produced in just over 2 years Higher than anticipated costs Price set at $32,000 for two-seat car Olympus

46 11-46 Solve the Dilemma Will It Go? (cont.) However: Initial sales have been slow, & company executives are surprised and concerned Olympus was introduced quickly, made available at all Venture dealers, priced midway between luxury and moderate models, & advertised heavily Discussion Questions What do you think were the main concerns with the Olympus two-door sports coupe? Is there a market for a two-seat, $32,000 sports car when the RX-8 sells for significantly less? Evaluate the role of the marketing mix in the Olympus introduction. What are some of the marketing strategies auto manufacturers use to stimulate sales of certain makes of automobiles?

47 11-47 Discussion? What is the marketing concept? Why is it so important?? List the variables in the marketing mix. How is each used in a marketing strategy?? Why are marketing research and information systems important to an organization s planning and development of strategy?? Briefly describe the factors that influence buying behavior. How does understanding buying behavior help marketers?