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Business in aChanging World

McGraw-Hill/Irwin Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved.

Chapter 12Customer-Driven Marketing

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David’s Bridal: Captured 30% of the wedding dress market.

In the past 60 years, the bridal industry has reinvented itself numerous times. David’s Bridal enters the market in the 1990’s and has never looked back.

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The Importance of Marketing

Planning & execution to satisfy customer goals –•Product development•Product pricing•Product promotion•Distribution of goods, ideas, services

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The group of activities that add value and designed to expedite transactions by creating, distributing, pricing, and promoting goods, services and ideas.

The Nature of Marketing

MARKETING

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•Marketing is NOT –•Manipulating consumers•Selling & advertising

•Marketing IS –•Satisfying consumers

The Nature of Marketing

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The Exchange Relationship – act of giving up one thing (money, credit, labor, goods) in return (exchange) for something else (goods, services, or ideas)

Marketing

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

Marketing – The Exchange Relationship

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Industry groups use marketing to increase demand for the industry’s product.

America’s Beef Producers

Functions of Marketing

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•Buying•Selling•Transporting•Storing•Grading •Financing•Marketing research•Risk taking

Functions of Marketing

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The idea that an organization should try to satisfy customers’ needs through coordinated activities that also allow it to achieve its own goals.

The Marketing Concept

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•Marketing Goal –•Customer satisfaction•Achieve business objectives•Boost productivity•Reduce costs•Capture market share

The Marketing Concept

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Implementing the Marketing Concept

•Good information re: customer wants•Consumer orientation•Coordinate organizational efforts

Customer’s perception of value = measure of success

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The Marketing Concept

•46% executives believe firm is customer focused•67% executives frequently meet with customers

Marketing is more important as markets are more competitive

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The Marketing Concept

Production Orientation – 19th century •manufacturing efficiency

Sales Orientation – early 20th century •Supply exceeds demand – need to “sell” products

Marketing Orientation – 1950’s •First determine what customers want

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The Marketing Concept

Marketing Orientation – approach requiring organizations to gather information about customer needs, share information across firm, use information to build long-term relationships with customers.

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Marketing Orientation

Wrigley’s sells products in 180 countries. Continues to reinvent itself; in 2008, merger with candy maker Mars.

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Developing a Marketing Strategy

Marketing strategy – plan of action for developing, pricing, distributing, and promoting products meeting the needs of specific customers.

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Developing a Marketing Strategy

Target Market – very specific group of consumers that a company focuses its marketing efforts to

(e.g. Nike – golf clubs for recreational golfers).

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Developing a Marketing Strategy

Total-market approach – firm tries to appeal to everyone and assumes that all buyers have similar needs.

(e.g. Salt, sugar, agricultural products).

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Developing a Marketing Strategy

Market segmentation – strategy to divide the total market into groups of people with relatively similar product needs.

Market segment – collection of individuals, groups or organizations sharing one or more characteristics thus having relatively similar needs and desires for products.

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Market Segmentation

Minority Buying Power by Race, 1990 versus 2003 & 2005

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Total-Market Approach

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Market Segmentation ApproachesConcentration – company develops one marketing strategy for a single market segment. Specialization (e.g. Porsche’s focus on high-income individuals)

Multi-segment – aims at two or more segments with strategy for each. (e.g. Raleigh bicycles for racers, commuters, and children)

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Market Segmentation Approaches

Niche marketing – narrow segment focus usually on one small well-defined group with a unique and specific set of needs. (IceCreamSource.com)

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Bases for Market Segmentation

•Demographic •Geographic•Psychographic•Behavioristic

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Developing the Marketing Mix

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Product

A good, service, or idea that has tangible and intangible attributes that provide satisfaction and benefit to consumersProducts should be sold at a profit

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Price

A value placed on a product or service that is exchanged between a buyer and seller

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Distribution

Making products available to consumers in the quantities and locations desired

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Promotion

A persuasive form of communication that attempts to expedite a marketing exchange by influencing individuals and organizations to accept goods, services, and ideas

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Marketing Research

Systematic and objective process to collect information about potential customers. Guides marketing decisions.

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Collecting Data

Primary data – marketing information that is observed, recorded or collected directly from respondents (consumers).

Secondary data – information compiled inside or outside the organization for some purpose other than changing the current situation

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Buying Behavior

Buying behavior – decision processes and actions of people who purchase and use products.•Consumers personal and household•Organizations for business use

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Buying Behavior

Perception – process by which a person selects, organizes, and interprets information received from one’s senses. (hearing a radio ad, touching a product)

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Buying Behavior

Learning – brings changes in behavior based on information and experience.

Attitude – positive or negative feelings about something.

Personality – individuals distinguishing character traits, attitudes, or habits.

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Social Variables of Buying Behavior

Social roles – set of expectations of individuals based on some position they occupy.

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Buying Behavior

Reference groups – groups with whom buyers identify and whose values or attitudes they adopt

Social classes – ranking of people into higher or lower positions of respect

Culture – integrated, accepted pattern of behavior including thought, speech, beliefs, actions, and artifacts

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What Does Green Marketing Mean for Marketers?

• Entrepreneurial marketers will be leaders– new energy efficient products– changing consumption patterns (3 R’s)

• Reduce carbon emissions– source locally– eco-friendly transportation– master e-business strategies

• Green Marketing = Profits

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The Marketing Mix and the Marketing Environment