Business in a Changing World McGraw-Hill/Irwin Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved. Chapter 12 Customer-Driven Marketing Asst. Prof. Dr. Serdar AYAN

12-2

12-3 The group of activities that add value and designed to expedite transactions by creating, distributing, pricing, and promoting goods, services and ideas. The Nature of Marketing MARKETING The Importance of Marketing Planning & execution to satisfy customer goals – Product development Product pricing Product promotion Distribution of goods, ideas, services

12-4 Marketing – The Exchange Relationship The Exchange Relationship – act of giving up one thing (money, credit, labor, goods) in return (exchange) for something else (goods, services, or ideas)

12-5 Industry groups use marketing to increase demand for the industry’s product. Buying Selling Transporting Storing Grading Financing Marketing research Risk taking Functions of Marketing

12-6 Marketing Goal – Customer satisfaction Achieve business objectives Boost productivity Reduce costs Capture market share The Marketing Concept Marketing is NOT – Manipulating consumers Selling & advertising Marketing IS – Satisfying consumers

12-7 The Marketing Concept 46% of executives believe firm is customer focused 67% of executives frequently meet with customers Marketing is more important as markets are more competitive Production Orientation – 19 th century manufacturing efficiency Sales Orientation – early 20 th century Supply exceeds demand – need to “sell” products Marketing Orientation – 1950’s First determine what customers want

12-8 The Marketing Concept Marketing Orientation – approach requiring organizations to gather information about customer needs, share information across firm, use information to build long-term relationships with customers.

12-9 Developing a Marketing Strategy Marketing strategy – plan of action for developing, pricing, distributing, and promoting products meeting the needs of specific customers. Target Market – very specific group of consumers that a company focuses its marketing efforts to, (e.g. Nike – golf clubs for recreational golfers).Nike Total-market approach – firm tries to appeal to everyone and assumes that all buyers have similar needs. (e.g. Salt, sugar, agricultural products).

12-10 Developing a Marketing Strategy Market segmentation – strategy to divide the total market into groups of people with relatively similar product needs. Market segment – collection of individuals, groups or organizations sharing one or more characteristics thus having relatively similar needs and desires for products.

12-11 Total-Market Approach

12-12 Market Segmentation Approaches Concentration – company develops one marketing strategy for a single market segment. Specialization (e.g. Porsche’s focus on high-income individuals)Porsche’s Multi-segment – aims at two or more segments with strategy for each. (e.g. Raleigh bicycles for racers, commuters, and children)Raleigh Niche marketing – narrow segment focus usually on one small well- defined group with a unique and specific set of needs. (IceCreamSource.com)IceCreamSource.com

12-13 Bases for Market Segmentation Demographic Geographic Psychographic Behavioristic

12-14 Developing the Marketing Mix

12-15 Product A good, service, or idea that has tangible and intangible attributes that provide satisfaction and benefit to consumers Products should be sold at a profit

12-16 Price A value placed on a product or service that is exchanged between a buyer and seller

12-17 Distribution Making products available to consumers in the quantities and locations desired

12-18 Promotion A persuasive form of communication that attempts to expedite a marketing exchange by influencing individuals and organizations to accept goods, services, and ideas

12-19 Marketing Research Systematic and objective process to collect information about potential customers. Guides marketing decisions.

12-20 Consumer Buying Behavior Perception – process by which a person selects, organizes, and interprets information received from one’s senses. (hearing a radio ad, touching a product) Learning – brings changes in behavior based on information and experience. Attitude – positive or negative feelings about something. Personality – individuals distinguishing character traits, attitudes, or habits.

12-21 Business Buyers Fewer and larger Geographically concentrated More decision participants Professional purchasers Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

12-22 Business Decision characteristics Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall More complex High prices Formal process Buyers and seller dependency

12-23 Business Buying Process Problem Recognition Product Specification Supplier Search Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall General Need Description Solicit Proposal Performance Review Order-Routine Specification Select Supplier

12-24 Buying Behavior Social roles – set of expectations of individuals based on some position they occupy. Reference groups – groups with whom buyers identify and whose values or attitudes they adopt Social classes – ranking of people into higher or lower positions of respect Culture – integrated, accepted pattern of behavior including thought, speech, beliefs, actions, and artifacts

12-25 The Marketing Mix and the Marketing Environment