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*Chapter Thirteen

Marketing: Helping

Buyers Buy

Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

*

*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

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Evolution of MarketingEvolution of Marketing

• Production Era - Up to early 1900s:farming & trades profited from this philosophy of limitless mkt. Produce as much as you can because of a vast demand of a growing needs.

• Selling Era - 1920s-1950s:

mass production (assembly line) reduced costs and made product available and accessible. Most companies emphasized selling & advertising to grow the business.

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Evolution of MarketingEvolution of Marketing• Marketing Era - 1950s+

Businesses recognized a need to be responsive to customer needs and demands to remain competitive ….

“The Marketing Concept”• Customer orientation!

• Service orientation!

• Profit orientation!

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Customer Relationship Customer Relationship Management (CRM)Management (CRM)

The process of learning as much as possible about customers and doing everything you can to satisfy them – or even exceed their expectations – with goods and services over time.

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Elements in the Marketing Elements in the Marketing MixMix

ProductProduct

MarketinMarketing g

ProgramProgram

PlacPlacee

PromotioPromotionn

Buy at Buy at Computers Computers

‘R Us‘R Us

PricPricee

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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.

• Price -- consider the costs of producing, distributing and promoting the product, which all influence the price.

• Promotion -- advertising, personal selling; public relations, publicity; word of mouth and various sales promotion efforts.

• Place -- Getting the product to consumers when and where they want is critical to market success

• 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

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Marketing ProcessMarketing Process

1.1. Find OpportunityFind Opportunity

2.2. Conduct ResearchConduct Research

3.3. Identify Target Identify Target MarketMarket

4.4. Design ProductDesign Product

5.5. Product TestingProduct Testing

6.6. Brand Name, Design Brand Name, Design & Price& Price

7.7. Develop Distribution Develop Distribution SystemSystem

8.8. Design Promotional Design Promotional ProgramProgram

9.9. Build Relationship Build Relationship With CustomerWith Customer

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*Providing Marketers with Information

• Test Marketing -- Testing product concepts among potential product users.

• 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

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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

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*** Focus GroupFocus Group

• A focus group is a small group of people (8 to 16 individuals) who meet under the direction of a discussion leader to communicate their opinions about a product or service that is offered by an organization.

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*Marketing Research

• Defining the question/problem/opportunity and determining the present situation.

• Collecting research data.

• Analyzing the research data.

• Choosing the best solution and implementing it

Marketing ResearchLG3

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*The Marketing EnvironmentThe MARKETING ENVIRONMENT

LG4

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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

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•geographic segmentation -Dividing a market by cities, countries, states or regions.

•demographic segmentation - Age, income and education level, religion, race, life stage, nationality and occupation. •psychographic segmentation - groups’ values, attitudes and interests

•benefit segmentation - comfort, convenience, durability, economy, health, luxury, safety, and status.

•volume/usage segmentation - Separating the market by volume of product.

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*The Consumer MarketMARKET Segmentation

LG5

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.

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*The Consumer MarketMARKET Segmentation

LG5

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•Reaching smaller market segments• Niche Marketing -BMW cars, Apple computers.• One to one marketing - travel agency.

•Moving towards Relationship marketing•Mass marketing - using mass media, such as TV, radio and news paper.•Relationship marketing tends to lead away from mass production and towards custom made goods and services.

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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

• 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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