Chapter 10Marketing and Product Development: Creating and Positioning Goods and Services

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What is Marketing?Marketing an organizational function and a 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

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Marketing, Product Development, and SalesCustomer needs consumer needs that can be satisfied by the qualities and features of a good or serviceProduct development the set of technical, scientific, and engineering processes involved in creating new or improved products to better satisfy customer needs

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Marketing, Product Development, and SalesSales the development and use of techniques to inform customers about the value of a companys products in order to persuade them to buy them

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Marketing, Product Development, and SalesCustomer relationship management the process of tracking the demand and satisfaction of customers in an effort to develop products they will want to buy on an ongoing basis

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How Marketing, Product Development, and Sales Cooperate to Get Products to CustomersFigure 10.1

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Marketing and the Business Vision, or MissionBusiness vision (business mission) a brief statement of a companys business model that tells stakeholders why the firm is in business, how it intends to satisfy customer needs, and why it will satisfy their needs better than its competitors

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The Product Life CycleProduct life cycle the typical sequence of changes in demand for a product that occur over time

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A Product Life CycleFigure 10.2

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Marketing ResearchMarketing research the systematic search for information that uncovers met and unmet customer needs, the different needs of different customer groups, and whether or not a products marketing mix appeals to customers

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Identifying Customer Needs through Marketing ResearchFigure 10.3

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Use Focus GroupsFocus group a group of people brought together to share their thoughts and feelings about a particular product and why it may or may not meet their needs

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Adopt a Customer-Oriented ApproachFocus on why existing products failed to meet customer needs as well as how future products should be designed

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Identifying Customer Groups and SegmentsCustomer groups groups of people who have a similar need for a particular product because the product satisfies several different kinds of needs

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How Customer Groups and Market Segments Are IdentifiedPrimary product needPrice rangeOther differentiating characteristics

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Identifying Customer GroupsFigure 10.4

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Choosing Markets to ServeMass marketing selling of a mass-produced product to all customersMultiple-segment marketing different models of a product are made and sold to different customer groupsFocused marketing developing products for customers in one or two targeted market segments

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Three Approaches to Market SegmentationFigure 10.6

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Dells Main Customer GroupsFigure 10.7

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Differentiating Products via the Marketing MixProduct differentiation the process of setting a product apart from its competitors by designing and marketing it to better satisfy customers needs

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Differentiating Products via the Marketing MixMarketing mix the combination of a products qualities and features, its price, the way it is promoted and sold, and the places at which it is sold

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Components of the Marketing MixFigure 10.8

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Product Branding and the Marketing MessageProduct branding using a unique name, design, symbol, or other element to differentiate a product from its competitorsBrand name the specific name, sign, or symbol a company uses to distinguish and legally protect the identity of its products

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Product Branding and the Marketing MessageBrand loyalty the tendency of customers to consistently purchase a particular product over time because they believe it can best satisfy their needsProduct positioning the process of customizing or tailoring a product to a specific market segment

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Products Creating real product differencesCreating perceived product differencesPackagingWhat products are available at the Homestar-runner store

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Price Target price the price a typical customer will be willing to pay for a product with a particular set of qualities and features

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Promotion AdvertisingSales promotionsPublic relationsPersonal selling

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PromotionPromotion the way in which a company advertises, announces, publicizes, and pushes its productsPromotional mix the combination of advertising, sales promotions, public relations, and personal selling used to reach and persuade customers to buy a product

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PromotionAdvertising the paid, nonpersonal promotion of a companys goods and services using mass media to influence consumersSales promotion nonpersonal, persuasive efforts designed to boost a companys sales immediately

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PromotionPublic relations the practice of conveying messages to the public through the media to influence peoples opinions about the company and its products

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PromotionPersonal selling direct, face-to-face communication by salespeople with existing and potential customers to promote a companys products

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Place Place the distribution and sales channels used to get both a product and its marketing message to the customer

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Different Types of Marketing ChannelsFigure 10.9

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