1. Marketing: Helping Buyers Buy
Chapter 13
Marketing: Helping Buyers Buy
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

2. LEARNING GOALS
Chapter Thirteen
Define Marketing and apply the marketing concept to both for-profit and nonprofit organizations.
Describe the Four P’s of marketing.
Summarize the Marketing Research process.
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3. LEARNING GOALS
Chapter Thirteen
Show how marketers use Environmental Scanning to learn about the changing marketing environment.
Explain how marketers apply the tools of Market Segmentation, relationship marketing and the study of consumer behavior.
Compare the Business-to-Bsiness market and the consumer market.
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4. WHAT is MARKETING?
What is Marketing?
LG1
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.
See Learning Goal 1: Define marketing and apply the marketing concept to both for-profit and non-profit organizations.
Simply put, marketing is activities buyers and sellers perform to facilitate mutually beneficial exchanges.
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5. FOCUS of CONTEMPORARY MARKETING
What is Marketing?
LG1
Marketing today involves helping the buyer buy through:
Websites that help buyers find the best price, identify product features, and question sellers.
Blogs and social networking sites that cultivate consumer relationships.
See Learning Goal 1: Define marketing and apply the marketing concept to both for-profit and non-profit organizations.
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6. The EVOLUTION of BUSINESS (Ch. 1)
The Evolution of U.S. Business
LG8
Agriculture Era
Manufacturing Era
Service Era
Information-Based Era
See Learning Goal 8: Review how past trends are being repeated in the present and what they mean for tomorrow’s college graduate.
This slide along with the next four gives students a sense of perspective into the evolution of the United States economy.
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7. FOUR ERAS of U.S. MARKETING
The Evolution of Marketing
LG1
Production Era
Selling Era
Marketing Concept Era
Customer Relationship Era
See Learning Goal 1: Define marketing and apply the marketing concept to both for-profit and non-profit organizations.
In the United States, marketing has evolved through four eras: (1) production, (2) selling, (3) marketing concept, and (4) customer relationship.
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8. The PRODUCTION and SELLING ERAS
The Evolution of Marketing
LG1
The general philosophy was “Produce what you can because the market is limitless.”
After mass production, the focus turned from production to persuasion.
See Learning Goal 1: Define marketing and apply the marketing concept to both for-profit and non-profit organizations.
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9. The MARKETING CONCEPT ERA
The Evolution of Marketing
LG1
After WWII, a consumer spending boom developed.
Businesses knew they needed to be responsive to consumers if they wanted their business.
See Learning Goal 1: Define marketing and apply the marketing concept to both for-profit and non-profit organizations.
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10. APPLYING the MARKETING CONCEPT
The Evolution of Marketing
LG1
The Marketing Concept includes three parts:
Customer Orientation -- Finding out what customers want and then providing it.
Service Orientation -- Making sure everyone in an organization is committed to customer satisfaction.
Profit Orientation -- Focusing on the goods and services that will earn the most profit.
See Learning Goal 1: Define marketing and apply the marketing concept to both for-profit and non-profit organizations.
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11. The CUSTOMER RELATIONSHIP ERA
The Evolution of Marketing
LG1
Customer Relationship Management (CRM) -- Learning as much as you can about customers and doing what you can to satisfy or exceed their expectations.
Organizations seek to enhance customer satisfaction building long-term relationships.
Today firms like Priceline and Travelocity use CRM that allow customers to build a relationship with the suppliers.
See Learning Goal 1: Define marketing and apply the marketing concept to both for-profit and non-profit organizations.
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12. SERVICE with a SMILE Six Steps for Keeping Your Customers Happy
The Evolution of Marketing
LG1
The cost of acquiring a new customer is 5x the cost of retaining one. Here’s how to keep them:
Build trust
Emphasize the long term
Listen
Treat your customers like stars
Show appreciation
Remember employees are customers too!
See Learning Goal 1: Define marketing and apply the marketing concept to both for-profit and non-profit organizations.
Service with a Smile
It’s important for companies to keep hold of their customer base. It’s too costly to keep searching out new customers.
Ask students: What has a company done to keep you coming back? What has a company done to you that ensures you’ll never leave?
Source: Inc. Guidebook, Vol. 2 No. 5 and Entrepreneur, February 2010.
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13. NONPROFIT MARKETING Nonprofit marketing strategies include:
Nonprofit Organizations and Marketing
NONPROFIT MARKETING
LG1
Nonprofit marketing strategies include:
Determine the firm’s goals and objectives
Focus on long-term marketing
Find a competent board of directors
Exercise strategic planning
Train and develop long-term volunteers
Carefully segment the target market
See Learning Goal 1: Define marketing and apply the marketing concept to both for-profit and non-profit organizations.
Marketing Strategies in Non-Profit Organizations
This slide identifies many ideas for developing a successful marketing strategy for non-profit organizations.
Regardless of the type or size of the organization, nonprofits will need marketing strategies and techniques to maximize their effectiveness.
Marketing tactics nonprofits may consider as a part of an overall marketing program include the following: newspaper inserts, cross promotions, packaging promotions, and corporate newsletters.
Public relations will play an important role with recognition and support for building strong community goodwill. Based on the following statistics, nonprofit organizations are very successful:
During the past 10 years the number of reporting “public charities” grew by 6.3 percent annually.
The nonprofit sector includes more than 1 million organizations that spend nearly $500 billion each year – more than the GDP of Brazil, Russia or Australia.
Approximately 6 percent of all organizations in the United States are nonprofits, and one in every 15 people works for a nonprofit.
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14. The FOUR P’s The Marketing Mix LG2
See Learning Goal 2: Describe the four P’s of marketing.
The Four P’s are also known as the marketing mix.
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15. DEVELOPING a PRODUCT
Designing a Product to Meet Consumer Needs
LG2
Product -- A good, service or idea that satisfies a consumer’s want or need.
Test Marketing -- Testing product concepts among potential product users.
Brand Name -- A word, letter or a group of words or letters that differentiates one seller’s goods from a competitor’s.
See Learning Goal 2: Describe the four P’s of marketing.
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16. PRICING and PLACING a PRODUCT
Setting an Appropriate Price
PRICING and PLACING a PRODUCT
LG2
Pricing products depends on many factors:
Competitors’ prices
Production costs
Distribution
High or low price strategies
Middlemen are important in place strategies because getting a product to consumers is critical.
See Learning Goal 2: Describe the four P’s of marketing.
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17. Photo Courtesy of: Uri Baruchin
PROMOTING the PRODUCT
Developing an Effective Promotional Strategy
LG2
Promotion -- All the techniques sellers use to inform people about their products and motivate them to purchase those products.
Promotion includes:
Advertising
Personal selling
Public relations
Word of mouth
Sales promotions
See Learning Goal 2: Describe the four P’s of marketing.
Photo Courtesy of: Uri Baruchin
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18. TANGLED WEB of PROMOTION Seven Sins of Web Design
Developing an Effective Promotional Strategy
TANGLED WEB of PROMOTION Seven Sins of Web Design
LG1
Too much clutter
Too difficult to navigate
Stale information
Copycatting
Ignoring the needs of your customer base
Not analyzing data
Refusing to get outside help
See Learning Goal 2: Describe the four P’s of marketing.
Tangled Web of Promotion
Companies often create web sites because they believe they have to. However, if it’s not done right, it could cause you to lose customers.
Not enough emphasis is put on checking the analytics. As noted in this chapter, market research is extremely important. The same goes for web research.
Ask students: Can you think of other things to add to this list? What are some companies that have good web sites? Bad web sites?
Photo Courtesy of: Cortes de Cima
Source: Entrepreneur, January 2011.
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19. CALLING ALL BUSINESSES! (Social Media in Business)
Consumers have smartphones and digital tablets that can get them online anywhere.
Devices lack of uniform design which is a challenge to web designers, making it costly.
mShopper helps retailers break into the mobile market with the Mobile Commerce Platform, or mStore.
See Learning Goal 2: Describe the four P’s of marketing.
Some retailers are hoping to use social media to enter the mobile market. Although many companies use social media to create awareness, there is a trend now of setting up direct outlets on social platforms. J.C. Penney and Delta Airlines have been in talks for months about obtaining a direct presence on Facebook.
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20. SEARCHING for INFORMATION
Providing Marketers with Information
LG3
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.
See Learning Goal 3: Summarize the marketing research process.
To understand customer wants and needs, it is critical to conduct market research. Good market research will identify products consumers have used, want to use in the future and market trends.
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21. FOUR STEPS in the MARKETING RESEARCH PROCESS
LG3
Defining the problem or opportunity and determining the present situation.
Collecting research data.
Analyzing the data.
Choosing the best solution and implementing it.
See Learning Goal 3: Summarize the marketing research process.
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22. DEFINING the PROBLEM or OPPORTUNITY
The Marketing Research Process
DEFINING the PROBLEM or OPPORTUNITY
LG3
What is the present situation?
What are the alternatives?
What information is needed?
How should the information be gathered?
See Learning Goal 3: Summarize the marketing research process.
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23. COLLECTING SECONDARY RESEARCH DATA
The Marketing Research Process
COLLECTING SECONDARY RESEARCH DATA
LG3
Secondary Data -- Existing data that has previously been collected by sources like the government.
Secondary data incurs no expense and is usually easily accessible.
Secondary data doesn’t always provide all the needed information for marketers.
See Learning Goal 3: Summarize the marketing research process.
Secondary research is cheaper and often easier to gather than primary research, but may be outdated.
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24. COLLECTING PRIMARY RESEARCH DATA
The Marketing Research Process
COLLECTING PRIMARY RESEARCH DATA
LG3
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.
See Learning Goal 3: Summarize the marketing research process.
Primary data is timely, but can be expensive and time consuming to gather.
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25. FOCUS GROUPS
The Marketing Research Process
LG3
Focus Group -- A group of people who meet under the direction of a discussion leader to communicate opinions.
See Learning Goal 3: Summarize the marketing research process.
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26. ANALYZING the DATA and IMPLEMENTING the DECISION
The Marketing Research Process
ANALYZING the DATA and IMPLEMENTING the DECISION
LG3
Marketers must turn data into useful information.
Must use their analysis to plan strategies and make recommendations.
Finally, marketers must evaluate their actions and determine if further research is needed.
See Learning Goal 3: Summarize the marketing research process.
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27. KEY BENEFITS of MARKETING RESEARCH
The Marketing Research Process
KEY BENEFITS of MARKETING RESEARCH
LG3
Analyze customer needs and satisfaction.
Analyze current markets and opportunities.
Analyze the effectiveness of marketing strategies.
Analyze marketing process and tactics currently used.
Analyze the reasons for goal achievement or failure.
See Learning Goal 3: Summarize the marketing research process.
Key Benefits of Marketing Research
This slide identifies the key benefits of marketing research.
As discussed early in the chapter, marketing is about understanding customers wants and needs. To accomplish this goal marketers must conduct marketing research.
Ask students: How has the Internet changed the way market research is conducted? (The Internet has made gathering both primary and secondary information easier and quicker. Also, information can now be gathered via blogs and social networks.
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28. MARKET RESEARCH vs. MARKETING RESEARCH
The Marketing Research Process
MARKET RESEARCH vs. MARKETING RESEARCH
LG3
Market Research: Global information
Marketing Research: In depth information on your customers and your products
Products
Goods
Services
Ideas
See Learning Goal 3: Summarize the marketing research process.
Key Benefits of Marketing Research
This slide identifies the key benefits of marketing research.
As discussed early in the chapter, marketing is about understanding customers wants and needs. To accomplish this goal marketers must conduct marketing research.
Ask students: How has the Internet changed the way market research is conducted? (The Internet has made gathering both primary and secondary information easier and quicker. Also, information can now be gathered via blogs and social networks.
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29. WAYS to FIND OUT WHAT CONSUMERS THINK
The Marketing Research Process
WAYS to FIND OUT WHAT CONSUMERS THINK
LG3
Conduct informal consumer surveys
Host a customer focus group
Listen to competitor’s customers
Survey your sales force
Become a “phantom” customer
See Learning Goal 3: Summarize the marketing research process.
Ways to Find Out What Consumers Think
The goal of market research is to better understand what consumers are thinking.
This slide addresses some of the ways that organizations can discover consumer wants and needs.
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30. SCANNING the MARKETING ENVIRONMENT
LG4
Environmental Scanning -- The process of identifying factors that affect marketing success.
Factors involved in the environmental scan include:
Global factors
Technological factors
Sociocultural factors
Competitive factors
Economic factors
See Learning Goal 4: Show how marketers use environmental scanning to learn about the changing marketing environment.
Environmental scanning is the process of identifying factors that affect marketing success. The environment of marketing is changing faster than at any time in history. Companies that don’t keep up, will fail to survive. Today’s marketing environment is influenced by the global marketplace and the explosion of the information age. To be fully prepared, a company must recognize and understand: cultural influences; governmental and political influences; demographic and lifestyle trends; local, national, and world economic trends; the strengths of multi-national competitors; and the influence of technology on physical distribution.
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31. The MARKETING ENVIRONMENT
LG4
See Learning Goal 4: Show how marketers use environmental scanning to learn about the changing marketing environment.
To effectively understand the marketing environment, it is critical companies continually scan the environment.
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32. The ABC’s of MARKETING Always be customer-focused.
The Marketing Environment
LG4
Always be customer-focused.
Benchmark against the best firms.
Continuously improve performance.
Develop the best value package.
Empower your employees.
Focus on relationship building.
Goal achievement is the reward.
See Learning Goal 4: Show how marketers use environmental scanning to learn about the changing marketing environment.
The ABC’s of Marketing
This slide identifies keys to marketing success.
One point on this slide mentions the empowerment of employees. Ask students: Why is empowering employees a key to successful marketing? (Answers will vary, but should focus on how empowerment should lead to greater employee motivation, creating a more customer focused environment.)
A key to marketing is understanding the organization’s strengths and weaknesses and your ultimate customer.
4. Once you have identified your strengths and weaknesses, what you really sell and to whom, and have reviewed your communication to the target market, you need to ensure that the message resonates with them positively. You can do that by engaging in savvy public relations (newsletters, press releases, etc.).
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33. The CONSUMER and B2B MARKET
Two Different Markets: Consumer and B2B
The CONSUMER and B2B MARKET
LG4
Consumer Market -- All the individuals or households that want goods and services for personal use and have the resources to buy them.
Business-to-Business (B2B) -- Individuals and organizations that buy goods and services to use in production or to sell, rent, or supply to others.
See Learning Goal 4: Show how marketers use environmental scanning to learn about the changing marketing environment.
The buyer’s intended end use of the product determines whether a product is consumer or B2B.
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34. MARKETING to CONSUMERS
The Consumer Market
LG5
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.
See Learning Goal 5: Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior.
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35. SEGMENTING the CONSUMER MARKET
LG5
Geographic Segmentation -- Dividing the market by cities, counties, states, or regions.
Demographic Segmentation -- Dividing the market by age, income, education, and other demographic variables.
Psychographic Segmentation -- Dividing the market by group values, attitudes, and interests.
(continued)
See Learning Goal 5: Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior.
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36. SEGMENTING the CONSUMER MARKET (continued)
LG5
Benefit Segmentation -- Dividing the market according to product benefits the customer prefers.
Volume (Usage) Segmentation -- Dividing the market by the volume of product use.
See Learning Goal 5: Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior.
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37. MARKETING to SMALL SEGMENTS
Reaching Smaller Market Segments
MARKETING to SMALL SEGMENTS
LG5
Niche Marketing -- Identifies small but profitable market segments and designs or finds products for them.
One-to-One Marketing-- Developing a unique mix of goods and services for each individual consumer.
See Learning Goal 5: Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior.
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38. MASS MARKETING vs. RELATIONSHIP MARKETING
Moving Toward Relationship Marketing
MASS MARKETING vs. RELATIONSHIP MARKETING
LG5
Mass Marketing -- Developing products and promotions to please large groups of people.
Relationship Marketing-- Rejects the idea of mass production and focuses toward custom-made goods and services for customers.
See Learning Goal 5: Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior.
Mass marketing uses little market segmentation.
The goal of relationship marketing is to keep customers happy by offering products that meet exact expectations
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39. DECISION MAKING
Decision Making: Finding the Best Alternative
LG3
Decision Making: Choosing among two or more alternatives. 7 STEPS--
Define the situation
Describe and collect needed information
Develop alternatives
Develop agreement among those involved
Decide which alternative is best
Do what is indicated
Determine if the decision was good and follow up
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
Managers don’t always go through this seven step process. However, they must always make sound decisions. It is easier said than done. As an interesting exercise, you can ask the students, working in a group, to go through a simple process of identifying an automobile to purchase using these steps. Everyone’s input should be obtained in the group. They either can select a group manager or all can have an equal say/vote. Both scenarios should produce different, but interesting experiences for students.
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40. STEPS in the CONSUMER DECISION-MAKING PROCESS
LG5
Problem recognition
Search for information
Evaluating alternatives
Purchase decision
Postpurchase evaluation
See Learning Goal 5: Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior.
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41. The CONSUMER DECISION MAKING PROCESS AND OUTSIDE INFLUENCES
LG5
See Learning Goal 5: Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior.
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42. KEY FACTORS in CONSUMER DECISION-MAKING
The Consumer Decision-Making Process
LG5
Learning
Reference Groups
Culture
Subcultures
Cognitive Dissonance
See Learning Goal 5: Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior.
Learning - Creates changes in consumer behavior through experiences and information.
Reference groups - Reference points in forming beliefs, attitudes, values or behaviors.
Culture - The set of values, attitudes and ways of doing things passed from generations.
Subculture - Values, attitudes and ways of doing things from belonging to a certain group.
Cognitive dissonance - Psychological conflict that may occur after a purchase.
Photo Courtesy of: Peter Hilton
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43. BUSINESS-to-BUSINESS MARKET (B2B)
The Business-to-Business Market
BUSINESS-to-BUSINESS MARKET (B2B)
LG6
B2B marketers include:
Manufacturers
Wholesalers and retailers
Hospitals, schools and charities
Government
Products are often sold and resold several times before reaching final consumers.
See Learning Goal 6: Compare the business-to-business market and the consumer market.
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44. B2B MARKET DIFFERENCES There are relatively few customers.
The Business-to-Business Market
LG6
There are relatively few customers.
Customers tend to be large buyers.
Markets are geographically concentrated.
Buyers are more rational than emotional.
Sales are direct.
Promotions focus heavily on personal selling.
See Learning Goal 6: Compare the business-to-business market and the consumer market.
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45. IN CONCLUSION What are the Four P’s of the Marketing Mix?
Progress Assessment
What are the Four P’s of the Marketing Mix?
What is environmental scanning?
What factors are included in environmental scanning?
Define the terms consumer market and business- to-business market.
Name and describe five ways to segment the consumer market.
The consumer market consists of all the individuals or households that want goods and services for personal consumption or use and have the resources to buy them. Business-to-business markets consist of all the individual and organizations that want goods and services to use in producing other goods and services or to sell, rent, or supply goods to others.
Geographic segmentation is the process of dividing the market by cities, counties, states, or regions. Demographic segmentation involves dividing the market by age, income, education level, religion, race, and occupation. Psychographic segmentation is the process of dividing the market by values, attitudes, and interests. Benefit segmentation involves determining which benefits to promote. Volume or usage segmentation is the process of determining how your customers purchase and use the product.
3. Niche marketing is identifying small but profitable market segments and designing or finding products for them. One-to-one marketing means developing a unique mix of goods and service for each individual customer.
The four key factors that make B2B markets different from consumer markets are: (1) Customers in B2B markets are relatively few as compared to households in the consumer market, (2) B2B customers tend to be geographically centered, (3) B2B sales tend to be direct, and (4) In the B2B marketplace sales are based on personal selling.
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