Chapter Thirteen Marketing: Helping Buyers Buy Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

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. Helping the buyer buy WHAT’S MARKETING? 13-2

FOUR ERAS of U.S. MARKETING 13-3

The general philosophy was “Produce what you can because the market is limitless.” 1. The PRODUCTION ERA 13-4

After mass production arrived, the focus turned from production to persuasion. 2. The SELLING ERA 13-5

After WWII, a consumer spending boom developed. Businesses knew they needed to be responsive to consumers if they wanted their business. 3. The MARKETING CONCEPT ERA 13-6

The Marketing Concept includes three parts: 1. Customer Orientation -- Finding out what customers want and then providing it. 2. Service Orientation -- Making sure everyone in an organization is committed to customer satisfaction. 3. Profit Orientation -- Focusing on the goods and services that will earn the most profit. APPLYING the MARKETING CONCEPT 13-7

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. 4. The CUSTOMER RELATIONSHIP ERA 13-8

THE MARKETING MIX 13-9

ELEMENTS IN THE MARKETING MIX Product Marketing Program Place Promotion Buy at Computers ‘R Us Price

PRODUCT Chapter

PRODUCT Any physical good, service, or idea that satisfies a want or need; plus anything that would enhance the product in the eyes of the consumers, such as the brand

DEVELOPING a PRODUCT Concept Testing Prototypes Test Marketing Package Design/Brand Name

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. DEVELOPING a PRODUCT 13-14

PRICE Chapter

Pricing products depends on many factors:  Competitors’ prices  Production costs  Distribution PRICING a PRODUCT 13-16

PRICING STRATEGIES Cost-Plus Value-Based Competitive High/Low Price Strategies Skimming Discount Loss-Leader Psychological

PLACE Chapter

PLACE (Distribution) Getting the product to the right place Once the product is manufactured, you must choose how to get it to the consumer

Marketing Intermediaries are important in place strategies because getting a product to consumers is critical. PLACING a PRODUCT 13-20

PROMOTION Chapter

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  Sales promotions PROMOTING the PRODUCT 13-22

PROVIDING MARKETERS WITH INFORMATION 13-23

Marketing Research and Forecasting -- 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 forecast what, and how much, they want in the future. Research uncovers market trends and attitudes held by company insiders and stakeholders. SEARCHING for INFORMATION 13-24

1. Defining the problem or opportunity and determining the present situation. FOUR STEPS in the MARKETING RESEARCH PROCESS 13-25

What’s the present situation? What are the alternatives? What information is needed? How should the information be gathered? DEFINING the PROBLEM or OPPORTUNITY 13-26

2.Collecting research data. FOUR STEPS in the MARKETING RESEARCH PROCESS 13-27

Secondary Data -- Existing data that has previously been collected by sources like the government. COLLECTING SECONDARY RESEARCH DATA Secondary data incurs little or no expense and is usually easily accessible. Secondary data doesn’t always provide all the needed information for marketers

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. COLLECTING PRIMARY RESEARCH DATA 13-29

Focus Group -- A group of people who meet under the direction of a discussion leader to communicate opinions. FOCUS GROUPS 13-30

3.Organizing and Analyzing the data. FOUR STEPS in the MARKETING RESEARCH PROCESS (cont.) 13-31

Marketers must first organize the data Marketers then turn the data into useful information. ORGANIZING and ANALYZING the DATA 13-32

4.Choosing the best solution and implementing it. FOUR STEPS in the MARKETING RESEARCH PROCESS (cont.) 13-33

Must use their analysis to plan strategies and make recommendations. Finally, marketers must evaluate their actions and determine if further research is needed. IMPLEMENTING the DECISION 13-34

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. KEY BENEFITS of MARKETING RESEARCH 13-35

Conduct informal consumer surveys WAYS to FIND OUT WHAT CONSUMERS THINK Host a customer focus group Listen to competitor’s customers Survey your sales force Become a “phantom” customer 13-36

DIFFERENT MARKETS 13-37

TWO MARKETS Consumer – B2C 2.Business-to-Business – B2B

Consumer Market -- All the individuals or households that want goods and services for personal use and have the resources to buy them. The CONSUMER and B2B MARKET Business-to-Business (B2B) -- Individuals and organizations that buy goods and services to use in production or to sell, rent, or supply to others

CONSUMER MARKET 13-40

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. MARKETING to CONSUMERS 13-41

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, interests, and opinions. SEGMENTING the CONSUMER MARKET 13-42

Benefit Segmentation -- Dividing the market according to product benefits the customer prefers. Volume (Usage) Segmentation -- Dividing the market by the volume of product use. SEGMENTING the CONSUMER MARKET (continued) 13-43

13-44

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. MASS MARKETING vs. RELATIONSHIP MARKETING 13-45

Niche Marketing -- Identifies small but profitable market segments and designs or finds products for them. MARKETING to SMALL SEGMENTS One-to-One Marketing-- Developing a unique mix of goods and services for each individual consumer

1. Problem recognition 2. Search for information 3. Evaluating alternatives 4. Purchase decision 5. Post-purchase evaluation (cognitive dissonance) STEPS in the CONSUMER DECISION-MAKING PROCESS 13-47

The CONSUMER DECSION MAKING PROCESS AND OUTSIDE INFLUENCES 13-48

BUSINESS MARKET 13-49

B2B marketers include:  Manufacturers  Wholesalers and retailers  Hospitals, schools and charities  Government Products are often sold and resold several times before reaching final consumers. BUSINESS-to-BUSINESS MARKET (B2B) 13-50

There are relatively few customers. Customers tend to be large buyers. Markets are geographically concentrated. Buyers are more rational than emotional. B2B MARKET DIFFERENCES Sales are direct. Promotions focus heavily on personal selling

YOUR PROSPECTS IN MARKETING There is a wider variety of careers in marketing than in most business areas