1. Chapter 11: Customer-Driven Marketing By: Chrishae Whitehead, Taylor Whitney, Tierney Whitney, Vernisha Williams, Darcy Williamson & Diante Willis

2. Learning Objectives Define marketing, and describe the exchange process Specify the functions of marketing Explain the marketing concept and its implications for developing marketing strategies Examine the development of a marketing strategy, including market segmentation and marketing mix Investigate how marketers conduct marketing research and study buying behavior Summarize the environmental forces that influence marketing decisions Assess a company’s marketing plans, and propose a solution for resolving its problem

3. Nature of Marketing Marketing is a group of activities designed to expedite transactions by creating, distributing, price, and promoting goods, services, and idea. These activities create value by allowing individuals and organizations to obtain what they need and what. A business cannot achieve its objective unless it provides something that customer’s value. Marketing is an important part of a firm’s overall strategy.

4. Marketing 4Ps Planning Pricing Promotion Product The Exchanging Relationship Exchanging the act of giving up one thing (money, credit, labor, goods) in return for something else (goods, services, or ideas)

5. Functions of Marketing Marketing focuses on a complex set of activities that be performed to accomplish objectives and generate exchanges. These activities include buying, selling, transporting, storing, grading, financing, marketing research, and risk taking. Buying consumers, stores, business, governments Selling advertising, personal selling, sales promotion, publicity, and packaging. Transporting- is the process of moving products from the seller to the buyer Storing- like transporting, storing is part of the physical distribution of products and includes warehousing goods.

6. Functions of Marketing Cont. Grading- refers to standardizing products by dividing them into subgroups and displaying and labeling them so that consumers clearly understand their nature and quality. Financing- For many products, especially large items such as automobiles, refrigerators, and new phones the marketer arranges credit to expedite the purchases. Marketing Research- by gathering information regularly, marketers can detect new trends and changes in consumer tastes. Risk taking- Risk is the chance of loss associated with marketing decisions.

7. Creating Value with Marketing Value- a customer’s subjective assessment of benefits relative to costs in determining the worth of a product. (customer value = customer benefits-customer cost) Customer benefits include anything a buyer receives in an exchanging. Customer Cost- include anything a buyer must give up to obtain the benefits the product provides. In developing marketing activities, it is important to recognize that customers receive benefits based on their experiences.

8. Developing a Marketing Strategy To implement the marketing concept and customer relationship management, a business needs to develop and maintain a marketing strategy, a plan of action for developing, pricing, distributing, and promoting products that meet the needs of specific customers

9. Selecting a Target Market A market is a group of people who have a need, purchasing power, and the desire and authority to spend money on goods, services, and ideas A target market is a more specific group of consumers on whose needs and wants a company focuses its marketing efforts. Marketing managers may define a target market as a relatively small number of people within a larger market

10. Selecting a Target Market Cont. Some firms uses a total-market approach, in which they try to appeal to everyone and assume that all buyers have similar needs and wants. Most firms, though, use market segmentation and divide the total market into groups of people. Companies use market segmentation to focus their efforts and resources on specific target markets so that they can develop a productive marketing strategy. Two common approaches to segmenting markets are the concentration approach and multisegment approach.

11. Market Segmentation Approaches In the concentration approach, a company develops one marketing strategy for a single market segment. -The concentration approach allows a firm to specialize, focusing all its efforts on the one market segment. In the multisegment approach, the marketer aims its marketing efforts at two or more segments, developing a marketing strategy for each.

12. For a firm to successfully use a concentration or multisegment approach to market segmentation, several requirements must be met: 1.Consumers’ needs for the product must be heterogeneous. 2.The segments must be identifiable and divisible. 3.The total market must be divided in a way that allows estimated sales potential, cost, and profits of the segments to be compared. 4.At least one segment must have enough profit potential to justify developing and maintaining a special marketing strategy. 5.The firm must be able to reach the chosen market segment w/ a particular market strategy.

13. Bases for Segmenting Markets Companies segment markets on the basis of several variables: 1.Demographics – age, sex, race, ethnicity, income, education, occupation, family size, religion, social class 2.Geographic – climate, terrain, natural resources, population density, subcultural values 3.Psychographic – personality characteristics, motives, lifestyles 4.Behavioristic – some characteristic of the consumer’s behavior toward the product

14. Developing a Marketing Mix Marketing mix is a module that covers 4 activities of marketing. -These are product, price, promotion and distribution/place. These factors are controlled by the firm to achieve specific goals within a dynamic marketing environment, and manipulate customers in certain ways that the business sees fit.

15. Product Product, whether a good, service or combination of both they have an emotional and psychological value. Some ways to help market these is to maximize consumer favourable attributes and minimize unfavourable attributes. -An example of this is including a warranty with a product and not making it more expensive.

16. Price Marketers see price as much more than a way of assessing value. This is because value is a key element that relates directly to revenue and profit. Price can also be altered quickly to stimulate demand and supple or respond to competitors’ actions.

17. Distribution Also known as place, refers to the making of the product available in the desired quantities. Retail stores are also like distribution stores as they make products available and easy for the consumer to see the product. With the use of the internet, retailers and other ‘middlemen’ of the industry are being eliminated as people can so easily go straight to the manufactures, which minimizes costs in which many consumers do not recognize.

18. Promotion A persuasive form of communication that attempts to expedite a marketing exchange by influencing individuals, groups, and organizations to accept goods, services and ideas

19. Marketing Research and Information Systems Marketing research is a systematic, objective process which gets information about potential customers to help guide marketing decisions. -A good example of this is making a survey and getting people of the public to do it with the answers of the questions, giving you an insight on what people like. Knowing what consumers want is a big advantage so you can fit their needs and potentially make the sale.

20. Marketing Research and Information Systems Cont. The 2 types of data which companies research are primary data and secondary data. Primary data is information which is observed, recorded or collected directly. -A survey compiled by the company is an example of primary data. Secondary data is information that is compiled inside or outside an organization for some purpose other than changing the current situation. -Using information from the U.S Census Bureau and relating it to the company is an example of secondary data

21. Online Marketing Research Online Marketing Research- researching in the pursuit of collection of data online about buying behaviors information of what people actually are buying and how they buy it. New technologies are changing the way businesses learn about theirs customers and the way businesses market their products. Interactive multimedia research or virtual testing combines sight, sound, and animation to visualize the testing of products design features and packaging.

22. Online Marketing Research Cont. Marketing research can use digital media and social network to gather useful information: Examples: Twitter Myspace Facebook Instagram Linked In These social media sites can also be substituted for focus groups and online surveys. Digital communication abilities have increased with emails, through websites, on blogs, and social network sites.

23. Buying Behavior Buying Behavior- the decision process and actions of people who purchase and use products. Psychological Variables of Buying Behavior -Perception -Motivation -Learning -Attitude -Personality

24. Social Variables of Buying Behavior Social Roles- a set of expectations for individuals based on some position they occupy. -Reference group -Social classes -Culture

25. Understanding Buying Behavior Understanding what consumers what and need. The Marketing Environment -Political, Legal, and regulatory forces -Social forces -Competitive and economic forces -Technological forces Marketing is a vital concept/element of business and society.