4 Designing a Customer-Driven Marketing Strategy Product concept is the idea that consumers will favor products that offer the most quality, performance, and features. Organization should therefore devote its energy to making continuous product improvements.Marketing Management Orientations
5 Companywide Strategic Planning Developing Strategies for Growth and DownsizingProduct/market expansion grid strategies
6 Companywide Strategic Planning Developing Strategiesfor Growth and DownsizingMarket penetration is a growth strategy increasing sales to current market segments without changing the productMarket development is a growth strategy that identifies and develops new market segments for current products
7 Companywide Strategic Planning Developing Strategiesfor Growth and DownsizingProduct development is a growth strategy that offers new or modified products to existing market segmentsDiversification is a growth strategy through starting up or acquiring businesses outside the company’s current products and marketsNote to InstructorThis Web link leads to the hompage for Virgin. This is a great company to discuss as they provide examples of market development, product development and diversification. Their homepage lists all their industries and products including tourism, leisure, shopping, media, finance, and healthcare.
8 Marketing Information and Customer Insights Marketing Information Systems (MIS)Marketing information system (MIS) consists of people and procedures for:Assessing the information needsDeveloping needed informationHelping decision makers use the information for customer
9 Developing Marketing Information Marketing IntelligenceMarketing intelligence is the systematic collection and analysis of publicly available information about consumers, competitors and developments in the marketplaceNote to InstructorThis Web link brings you to AC Nielsen’s homepage. This includes not just their online division but their entire company. It is very interesting to explore the area called trends an insights.In slideshow view, click on movie icon to launch Meredith video snippet. See accompanying DVD for full video segment.Discussion QuestionAsk students what Nielsen might have learned about customers in these insights.
10 Developing Marketing Information Marketing ResearchMarketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization
11 Developing Marketing Information Internal DataInternal databases are electronic collections of consumer and market information obtained from data sources within the company networkNote to InstructorPizza Hut’s database is highlighted in the text. They have:Detailed customer data on 40 million U.S. households, gleaned from phone orders, online orders, and point-of-sale transactions at its more than 7,500 restaurants.The company can organize the data by order details to enhance customer relationships such as the Pizza Hut designed VIP (Very Into Pizza) program to retain its best customers. It invites these customers to join the VIP program for $14.95 and receive a free large pizza. Then, for every two pizzas ordered each month, VIP customers automatically earn a coupon for another free large pizza.
12 Business Buyer Behavior Major Types of Buying SituationsStraight rebuy is a routine purchase decision such as reorder without any modificationModified rebuy is a purchase decision that requires some research where the buyer wants to modify the product specification, price, terms, or suppliersNew task is a purchase decision that requires thorough research such as a new product
13 Boston Consulting Group Growth-Share Matrix Note to InstructorStars are high-growth, high-share businesses or products requiring heavy investment to finance rapid growth. They will eventually turn into cash cows.Cash cows are low-growth, high-share businesses or products that are established and successful SBUs requiring less investment to maintain market share.Question marks are low-share business units in high-growth markets requiring a lot of cash to hold their share.Dogs are low-growth, low-share businesses and products that may generate enough cash to maintain themselves but do not promise to be large sources of cash.
14 The Marketing Environment The marketing environment includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with customers
15 The Marketing Environment Microenvironment consists of the actors close to the company that affect its ability to serve its customers, the company, suppliers, marketing intermediaries, customer markets, competitors, and publics
16 The Company’s Microenvironment Actors in the Microenvironment
17 The Company’s Microenvironment SuppliersProvide the resources to produce goods and servicesTreated as partners to provide customer value
18 The Company’s Microenvironment Marketing IntermediariesHelp the company to promote, sell and distribute its products to final buyersNote to InstructorThe text explains how Coke delivers value for their marketing intermediaries:They understand each retailer partner’s businessThe conduct consumer research and share with partnersThey develop marketing programs and merchandising for partners
19 Types of Buying Decision Behavior Four Types of Buying BehaviorBuying behavior varies greatly fordifferent types of products. For example,someone buying an expensive new PCmight undertake a full information gatheringand brand evaluation process.
20 The Buyer Decision Process Buyer Decision Making ProcessThe actual purchasedecision is part of a muchlarger buying process—starting withneed recognition through how you feelafter making the purchase. Marketerswant to be involved throughout theentire buyer decision process.
21 Business Buyer Behavior Participants in the Business Buying ProcessUsers are those that will use the product or serviceInfluencers help define specifications and provide information for evaluating alternativesBuyers have formal authority to select the supplier and arrange terms of purchaseDeciders have formal or informal power to select and approve final suppliersGatekeepers control the flow of information
23 Segmenting Consumer Markets Market SegmentationSegmenting Consumer MarketsGeographic segmentation divides the market into different geographical units such as nations, regions, states, counties, or cities
24 Segmenting Consumer Markets Market SegmentationSegmenting Consumer MarketsDemographic segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality
25 Segmenting Consumer Markets Market SegmentationSegmenting Consumer MarketsPsychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality traitsNote to InstructorThere are a whole group of products which are targeted to the affluent including hotels like Four Seasons, which is mentioned in the book. Their products offerings are deluxe:Kids in the City package for $520 a night and, among other things, enjoy a visit in their room from the Ice Cream Man, who arrives with all the fixings to make any concoction they desire.The Benjamin Hotel in New York City provides dog beds in a variety of styles and doggie bathrobes, as well as canine room service and DVDs for dogs.At the Ritz-Carlton, Lake Las Vegas in Henderson, Nevada, the Love at Lake Las Vegas weekend package includes two nights in the 2,400 square foot presidential suite, helicopter and gondola rides, a champagne-tasting party on a yacht complete with rose petals strewn about and a string trio, use of a luxury car throughout the stay, in-room couples spa treatment, a $5,000 casino line of credit, a $50,000 shopping spree at Neiman Marcus, 14 dozen roses, and a butler-drawn Cristal champagne bath.
26 Segmenting Consumer Markets Market SegmentationSegmenting Consumer MarketsBehavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a productOccasionsBenefits soughtUser statusUsage rateLoyalty statusNote to InstructorOccasion segmentationDividing the market into segmentsaccording to occasions when buyers getthe idea to buy, actually make theirpurchase, or use the purchased item.Benefit segmentationaccording to the different benefits thatconsumers seek from the product.Students often get confused with the difference between behavioral and psychographic segmentation. Behavior is more tied into how consumers use the product. A good illustration is greeting cards—ask students how their purchasing would be different when buying a birthday card for their mother versus one for a new boyfriend. In addition, ask them how people might look for different benefits when purchasing a car? Some might look for safety while others will look for the best gas mileage.
27 4 Major Steps in Designing a Customer-Drive Marketing Strategy In concept, marketing boils down totwo questions: (1) Which customerswill we serve? and (2) How will weserve them? Of course, the toughpart is coming up with good answersto these simple-sounding yet difficultquestions. The goal is to create morevalue for the customers we servethan competitors do
28 Target Market Strategies Market TargetingTarget Market StrategiesConcentrated marketing targets a small share of a large marketLimited company resourcesKnowledge of the marketMore effective and efficient