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Customer-Driven Marketing

Chapter 12

Summarize the ways in which marketing creates utility.

Discuss the marketing concept.

Describe not-for-profit marketing, and identify the five major categories of nontraditional marketing.

Outline the basic steps in developing a marketing strategy.

Describe the marketing research function.

Identify and explain the methods available for segmenting consumer and business markets.

Outline the determinants of consumer behavior.

Discuss the benefits and tools for relationship marketing.

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Learning

Goals5

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• Marketing - 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.

– Best marketers create a link in consumers’ minds between the new need and the fulfillment of that need by the product.

• Exchange process - activity in which two or more parties give something of value to each other to satisfy perceived needs.

What is

Marketing?

Utility - want-satisfying power of a good or service.

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.

How Marketing

Creates Utility

Evolution of the

Marketing

Concept

• 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.

• Explained by shift from sellers’ market in which goods and services are relatively scarce to buyers’ market in which they are relatively plentiful.

Emergence of the

Marketing

Concept

Not-for-Profit

Marketing

20 million not-for-profits exist worldwide.

Apply marketing tools to reach audiences, secure funding, improve their images, and accomplish their overall missions.

Sometimes partner with a profit-seeking company to promote a message.

Non-Traditional

Marketing

1. Study and analyze potential target markets and choose among them.

2. Create a marketing mix to satisfy the chosen market.

Developing a

Marketing

Strategy

• 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.

→ Product strategy involves the nature of the product and its package design, brand names, trademarks, and product image.

→ Distribution strategy ensures that 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.

Selecting a

Target Market

• 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 - firms mass produce goods and services and add unique features to individual or small groups of orders.

Marketing Mix for

International Markets

• 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.

Marketing

Research

Market

Segmentation

Market segmentation – the process of dividing a total market into several relatively homogeneous groups.

How Market

Segmentation

Works

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.

Product-Related Segmentation• Divides market based on buyer’s relationship to the good or

service.

Segmenting

Consumer

Markets

• Geographic segmentation – targets geographically concentrated industries.

• 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.

Segmenting

Business

Markets

• 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: needs and motives, perceptions, attitudes, self-concept.

– Interpersonal factors: cultural, social, and family influences.

• Business buying behavior - often includes a variety of influences from multiple decision makers.

Determining What

Customers Want

Steps in

Consumer

Behavior Process

• Relationship marketing - 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

• Lower costs and higher profits for the business.

• Efficient targeting of best customers increases the lifetime value of a customer.

• Stronger relationships with business partners and opportunities to combine capabilities and resources to better accomplish goals.

Benefits of

Relationship

Marketing

• 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.

• Affinity programs: solicit involvement based on common interest.

• Comarketing: businesses jointly market each others’ products.

• Cobranding: firms link their names in a single product.

Tools for Nurturing

Customer

Relationships

Customizing products and marketing and rapidly delivering

goods.

Customer relationship management software helps companies gather, sort, and interpret data about specific

customers.

One-to-One

Marketing