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Marketing Business 40 Week 6 Chapter 13 23 February, 2005.

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Presentation on theme: "Marketing Business 40 Week 6 Chapter 13 23 February, 2005."— Presentation transcript:

1 Marketing Business 40 Week 6 Chapter 13 23 February, 2005

2 Article – WSJ Nextel Why do you think Nextel's original walkie-talkie feature was so successful, particularly with construction crews? See page 403- what do you think Nextel did? Based on the information contained in the article, and your own personal observations, what are some of the major challenges involved with selling to the teen market? See page 417 – how do teens buy products? Do you think Nextel is underestimating the challenge involved with selling to the teen market? Do you think it will be successful? Why or why not? See page 417 – do you think teens buy the way Nextel thinks they will?

3 What is Marketing? Target Market Market Needs Satisfy Needs

4 4 Ps: The Marketing MixProduct Marketing Program Place Promotion Buy at Computers R Us Price

5 Product Design Concept Test Prototype Test Market Outsource Package Design/Brand Name

6 Pricing (March 2 nd )

7 Promotion (March 9 th )

8 Place (Distribution)

9 Uses of Market Research Analyze Customer Needs/Satisfaction Analyze Markets & Opportunities Analyze Effectiveness of Strategy/Tactics Analyze Goal Achievement

10 Guidelines for Market Research Clarify research objectives/stay on target. Decide whether you will do the research or use a professional researcher. Make certain questions are directed to objectives. Ask for relevant information.

11 Sources for Market Research Information Secondary Data Company Records Govt Agencies Trade Associations Research Companies Primary Data Surveys Observations Focus Groups

12 Different Markets Consumer -Niche -One-to-One Business-to- Business (B2B)

13 Consumer Market Segmentation (p. 413) Geographic Demographic Psychographic Benefit Volume

14 What is happening by city?

15 U.S. Buying Power* In Million $ *Excludes senior citizens, as not all sources characterize them as a diversity market

16 Urban Adult Spending Habits Source: Simmons Market Research

17 Buying Process Step 1: Recognize Problem Step 2: Information Search Step 3: Evaluate Alternatives Step 4: Make Purchase Decision Step 5: Postpurchase Evaluation

18 Consumer Decision Making P. 417

19 Consumer Influences p. 417-418 Learning Subculture Reference Group Cognitive Dissonance Customer Culture

20 Break, Nascar Video Watch for references to elements of: 1) Market Segmentation (p.413) 2) Consumer Influences (p.417) Decide amongst yourselves how youll Break first? Later? Organize the tables for watching for specifics

21 Business-to-Business (B2B) Segments 1.Number 2.Size 3.Geographic Concentration 4.Rational 5.Direct Sales 6.Personal Selling

22 Tips: Successful Marketing in Small Organizations Identify your best customers. Build lasting relationships. Share your customers with other businesses by developing strategic alliances. Practice integrated marketing. Know what makes your customers happy. Personally thank your customers for support. Stand out above the competition.

23 Customer Relationship Management

24 So why is this so important? (Bain & Company) research found that only 31 percent of online retail customers generate 65 percent of profits. Other segments identified by the survey ("Casual Buyers," "Relationship Seekers," and "Bargain Hunters" are less profitable or even losing. A 5 percent increase in customer loyalty can increase profitability by 40 percent to 95 percent Why does loyalty matter so much to profits?, Bain & Co

25 Banking example Banks Profits Customer segment

26 How the Safeway Club built loyalty { Total grocery shopping } Spent at Safeway 1 st 20% 2 nd 20% 3 rd 20% 4 th 20% 5 th 20%

27 What they did… Segmented Secondary Shoppers Did most of their shopping elsewhere Were sent coupon for a manufacturer-sponsored item ( Dannon Yogurt) Received a $1 off coupon for anything in meat or produce (if they did not shop heavily there). Changing customer behavior, by getting people to visit store departments that they had not previously shopped. Primary Shoppers Maxed out- no point in giving them extra discounts So, they got a $1 off in the cookie department. But, if you give $1 off to good customers who had not previously bought cookies, it generates incremental revenue.

28 More of what they did… Newsletter - Food Sense, contained tips and recipes. Targeted inserts Peanut butter conversion series to Jif, Skippy users Month 1, 2 – Articles on Safeway PB, how made Month 3 – Stock up" offer - $1 off any two jars Month 4 – Cross sell" $0.50 off Safeway jelly Card, free ice cream on the customers birthday

29 Best practices Easy to use Provide immediate rewards Have value that is worth it from the customers perspective Be targeted to customers whose behavior your are trying to change Be limited to what you can afford to spend Have a published exit strategy

30 Market Stakeholders of Business Employees Stockholders Creditors Suppliers Customers Distributors, Wholesalers, Retailers Business Firm See Figure 1.2 on page 8

31 Nonmarket Stakeholders of Business Communities Governments Activist Groups Media Business Support Groups General Public Business Firm See Figure 1.3 on page 9

32 Customer Relationship Management 80/20 Rule Software

33 Next week: Chapter 14 Papers are due on March 16 th How are they coming? Midterm is also on March 16 th Open book, open note Might be a case youve already seen

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