Presentation on theme: "Building Customer Relationships Through Effective Marketing"— Presentation transcript:
1 Building Customer Relationships Through Effective Marketing Chapter 11Building Customer Relationships Through Effective Marketing
2 Learning ObjectivesUnderstand the meaning of marketing and the importance of management of customer relationships.Explain how marketing adds value by creating several forms of utility.Trace the development of the marketing concept and understand how it is implemented.Understand what markets are and how they are classified.Identify the four elements of the marketing mix and be aware of their importance in developing a marketing strategy.Explain how the marketing environment affects strategic market planning.Understand the major components of a marketing plan.Describe how market measurement and sales forecasting are used.Distinguish between a marketing information system and marketing research.Identify the major steps in the consumer buying decision process and the sets of factors that may influence this process.
3 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.
5 Exchange Between Buyer and Seller Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 15th ed. (Mason, Ohio: South-Western/Cengage Learning, 2010). Adapted with permission.
6 Relationship Marketing …establishing long-term, mutually satisfying buyer-seller relationships.Successful marketers respond to customer needs and strive to continually increase value to buyers over time.
7 Customer Relationship Marketing …using information about customers to create marketing strategies that develop and sustain desirable customer relationships.
8 Customer Lifetime Value …a combination of purchase frequency, average value of purchases, and brand-switching patterns over the entire span of a customer’s relationships with a company.
9 …the ability of a good or service to satisfy a human need. Utility…the ability of a good or service to satisfy a human need.
10 Types of UtilityForm: converting production inputs into finished productsPlace: making a product available at a location where customers wish to purchase itTime: making a product available when customers wish to purchase itPossession: transferring title (or ownership) of a product to a buyer
12 Marketing Concept…a business philosophy that a firm should provide goods and services that satisfy customers’ needs through a coordinated set of activities that allows the firm to achieve its objectives.
15 Implementing Marketing Concept Obtain informationDetermine needsDetermine how needs are currently satisfiedLearn how products might be improvedFind out opinions customers have of firm and marketing effortsUse information to pinpoint specific needs and potential customers
16 Mobilize Marketing Resources Provide productPrice productPromote productDistribute productObtain information
17 Market…a group of individuals or organizations, or both, that need products in a given category and that have the ability, willingness, and authority to purchase such products.
19 Business-to-Consumer Markets …consist of purchasers and/or household members who intend to consume or benefit from the purchased products and who do not buy products to make profits.
20 Business-to-Business Markets …are grouped broadly into producer, reseller, governmental, and institutional categories…. They purchase specific kinds of products for use in making other products, for resale, or for day-to-day operations.
21 B2B MarketsProducer : buys certain products to use in manufacture of other productsReseller: buys finished products and sells them for profitGovernmental: buys goods and services to maintain internal operations and to provide products to citizensInstitutional: buys goods for goals unrelated to profit, market share, or return on investment
22 Marketing Strategy…a plan that will enable an organization to make the best use of its resources and advantages to meet its objectives.
23 Using the InternetThe American Marketing Association’s website is an excellent resource for marketing information.
24 Parts of Marketing Strategy Select/analyze target marketCreate/maintain appropriate marketing mix
25 Marketing Mix…a combination of product, price, distribution, and promotion developed to satisfy a particular target market.
26 Target Market…a group of individuals or organizations, or both, for which a firm develops and maintains a marketing mix suitable for the specific needs and preferences of that group.
27 Marketing ManagersExamine potential markets for possible effect on firm’s sales, costs, and profitsDetermine if organization has the resources to produce a marketing mix that meets the needs of a target marketDetermine if satisfying those needs is consistent with firm’s objectivesAnalyze competitors
28 Approaches of Selecting Target Market Undifferentiated Company designs a single marketing mix and directs it at the entire market for a particular productMarket segmentation Company divides a market into segments and directs marketing mix at particular segment or segments rather than the total market
29 Market Segment…a group of individuals or organizations within a market that shares one or more common characteristics.
30 Figure 11.2: Selecting Target Markets The letters in each target market represent potential customers. Customers that have the same letters have similar characteristics and similar product needs.
31 Table 11.3: Common Bases of Market Segmentation Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 15th ed. (Mason, Ohio: South-Western/Cengage Learning, 2010). Adapted with permission.
32 Advertisers’ Classification of Audiences NameAge(2003)NeedsInfluencerMillennials<25Tech SavvyGrew up in prosperous timesGen X-ers25–38Media SavvyGrew up in economic downturnBoomers39–58Avid ConsumersDeny aging processMatures57+Practical, pragmaticMoney consciousMediaKnowAll, “Audience Research”,
33 Figure 11.3: The Marketing Mix and the Marketing Environment
35 Pricing Decisions Spotlight Base PriceDiscountsGoalsMaximize profitMake room for new modelsSpotlightSource: Bayer Consulting for Deloitte LLP survey of 1,006 people ages 17 to 28.
36 Distribution Decisions TransportationStorageSelection of IntermediariesNumber of levelsWidth of distribution36
37 Promotion Decisions Advertising Personal Selling Sales Promotion Public Relations37
38 Controllable Elements of Mix Can Also Be Varied for... Organizational goalsMarketing goalsTarget markets38
39 Forces of External Marketing Mix EconomicSocioculturalPoliticalCompetitiveLegal & regulatoryTechnological39
40 Marketing Plan…a written document that specifies an organization’s resources, objectives, strategy, and implementation and control efforts to be used in marketing a specific product or product group.40
41 Describes firm’s current position Marketing PlanDescribes firm’s current positionEstablishes marketing objectives for productSpecifies how the organization will attempt to achieve these objectivesTime frameShort-range = 1 year or lessMedium-range = 1 to 5 yearsLong-range = 5+ years41
42 Marketing Plan Is Used for... Communication among employeesAssignment of responsibilities/tasksSchedules for implementationHow resources allocatedMonitor/evaluate performance42
43 Table 11.4: Components of Marketing Plan Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 15th ed. (Mason, Ohio: South-Western/Cengage Learning, 2010). Reprinted with permission..43
44 Sales Forecast…an estimate of the amount of a product that an organization expects to sell during a certain period of time based on a specified level of marketing effort.44
45 Surveys of buyers/sales personnel Time-series analyses Forecasting MethodsExecutive judgmentsSurveys of buyers/sales personnelTime-series analysesCorrelation analysesMarket tests45
46 Marketing Information System …a system for managing marketing information that is gathered continually from internal and external sources.46
47 Sources of Information InternalSales figuresProduct/marketing costsInventory levelsActivities of sales forceExternalOrganization’s suppliersIntermediariesCustomersCompetitors’ activitiesEconomic conditions47
48 Information Can Include Daily sales reportsForecasts of sales/buying trendsReports on changes in market share48
49 Marketing Research…the process of systematically gathering, recording, and analyzing data concerning a particular marketing problem.49
50 Table 11.5: The Six Steps of Market Research 50
51 Technology and Marketing Information DatabaseSingle-Source DataOnline Information ServicesInternetNielsenAdvertising AgeIntranet51
52 Table 11.6: Internet Sources of Marketing Information Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 15th ed. (Mason, Ohio: South-Western/Cengage Learning, 2010). Reprinted with permission.52
53 Buying Behavior…the decisions and actions of people involved in buying and using products.53
54 Consumer Buying Behavior …the purchasing of products for personal or household use, not for business purposes.54
55 Figure 11.4: Consumer Decision Process and Influences 55
57 Personal Income…the income an individual receives from all sources less the Social Security taxes the individual must pay..57
58 …personal income less all additional personal taxes. Disposable Income…personal income less all additional personal taxes.58
59 Discretionary Income…disposable income less savings and expenditures on food, clothing, and housing.59
60 Business Buying Behavior …the purchasing of products by producers, resellers, governmental units, and institutions.60
61 Business Buyers Consider Usually Quality Price Service provided Better informedBuy in larger quantities61
62 Business Buying Occurs Through... DescriptionInspectionSamplingNegotiation62
63 Chapter QuizThe utility created by transferring title of a product to the buyer is called __________ utility.formtimeproductionplacepossession63
64 Chapter QuizJ.C. Penney is considered to be a member of which type of market?Business-to-businessResellerConsumerProducerInstitutional64
65 Chapter QuizThe ingredient of the marketing mix concerned with product design, brand names, packaging, and warranties ispricing.quality.product.distribution.promotion.65
66 Chapter QuizAll of the following are true of marketing plans except that they shouldnot be modified.include details of task scheduling.specify task objectives.describe the firm’s current situation.focus on a particular product or product group.66
67 Chapter Quiz In this chapter, MIS refers to _________ system. merged informationmajor informationmarketing informationmarket influentialminor information67