1. MKT 101 Introduction to Marketing: Review Lecture

2. What Is Marketing?
Marketing is a process by which companies create value for customers and build strong customer relationships to capture value from customers in return
Note to Instructor:
Discussion Question
Ask students for examples of either national or local companies that are excellent at marketing and ask how they reflect the definition given in this slide.

3. Designing a Customer-Driven Marketing Strategy
Marketing management is the art and science of choosing target markets and building profitable relationships with them
What customers will we serve?
How can we best serve these customers?
Now that the company
fully understands its
consumers and the marketplace, it
must decide which customers it will
serve and how it will bring them value.

4. Designing a Customer-Driven Marketing Strategy
Selecting Customers to Serve
Market segmentation refers to dividing the markets into segments of customers Target marketing refers to which segments to go after
Note to Instructor:

5. Designing a Customer-Driven Marketing Strategy
Choosing a Value Proposition
Value proposition Set of benefits or values a company promises to deliver to customers to satisfy their needs

6. Designing a Customer-Driven Marketing Strategy
Marketing Management Orientations
Production concept
Product concept
Selling concept
Marketing concept
Societal concept

7. Designing a Customer-Driven Marketing Strategy
Marketing Management Orientations
Production concept is the idea that consumers will favor products that are available or highly affordable

8. Designing a Customer-Driven Marketing Strategy
Marketing Management Orientations
Product concept is the idea that consumers will favor products that offer the most quality, performance, and features. Organization should therefore devote its energy to making continuous product improvements.

9. Designing a Customer-Driven Marketing Strategy
Marketing Management Orientations
Selling concept is the idea that consumers will not buy enough of the firm’s products unless it undertakes a large scale selling and promotion effort

10. Designing a Customer-Driven Marketing Strategy
Marketing Management Orientations
Marketing concept is the idea that achieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do

11. Building Customer Relationships
Customer Relationship Management (CRM)
The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction

12. Companywide Strategic Planning
Developing Strategies for Growth and Downsizing Product/Market Expansion Grid Strategies
Market penetration
Market development
Product development
Diversification

13. Companywide Strategic Planning:
Note to Instructor
Stars are high-growth, high-share businesses or products requiring heavy investment to finance rapid growth. They will eventually turn into cash cows.
Cashcows are low-growth, high-share businesses or products that are established and successful SBUs requiring less investment to maintain market share.
Question marks are low-share business units in high-growth markets requiring a lot of cash to hold their share.
Dogs are low-growth, low-share businesses and products that may generate enough cash to maintain themselves but do not promise to be large sources of cash.

14. Potential Customer Profitability
Profitability and Loyalty Grid
4 Types of Customer
True Friends
???ent
Strangers
Barnacles

15. Companywide Strategic Planning
Developing Strategies
for Growth and Downsizing
Market penetration is a growth strategy increasing sales to current market segments without changing the product
Market development is a growth strategy that identifies and develops new market segments for current products

16. Companywide Strategic Planning
Developing Strategies
for Growth and Downsizing
Product development is a growth strategy that offers new or modified products to existing market segments
Diversification is a growth strategy through starting up or acquiring businesses outside the company’s current products and markets
Note to Instructor
This Web link leads to the hompage for Virgin. This is a great company to discuss as they provide examples of market development, product development and diversification. Their homepage lists all their industries and products including tourism, leisure, shopping, media, finance, and healthcare.

17. Marketing Information and Customer Insights
Marketing Information Systems (MIS)
Marketing information system (MIS) consists of people and procedures for:
Assessing the information needs
Developing needed information
Helping decision makers use the information for customer

18. Assessing Marketing Information Needs
MIS provides information to the company’s marketing and other managers and external partners such as suppliers, resellers, and marketing service agencies

19. Developing Marketing Information
Marketers obtain information from
Internal data
Marketing intelligence
Marketing research

20. Developing Marketing Information
Internal Data
Internal databases are electronic collections of consumer and market information obtained from data sources within the company network
Note to Instructor
Pizza Hut’s database is highlighted in the text. They have:
Detailed customer data on 40 million U.S. households, gleaned from phone orders, online orders, and point-of-sale transactions at its more than 7,500 restaurants.
The company can organize the data by order details to enhance customer relationships such as the Pizza Hut designed VIP (Very Into Pizza) program to retain its best customers. It invites these customers to join the VIP program for $14.95 and receive a free large pizza. Then, for every two pizzas ordered each month, VIP customers automatically earn a coupon for another free large pizza.

21. Developing Marketing Information
Marketing Intelligence
Marketing intelligence is the systematic collection and analysis of publicly available information about consumers, competitors and developments in the marketplace
Note to Instructor
This Web link brings you to AC Nielsen’s homepage. This includes not just their online division but their entire company. It is very interesting to explore the area called trends an insights.
In slideshow view, click on movie icon to launch Meredith video snippet. See accompanying DVD for full video segment.
Discussion Question
Ask students what Nielsen might have learned about customers in these insights.

22. Developing Marketing Information
Marketing Research
Marketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization

23. Types of Buying Decision Behavior
Four Types of Buying Behavior
Buying behavior varies greatly for
different types of products. For example,
someone buying an expensive new PC
might undertake a full information gathering
and brand evaluation process.

24. The Buyer Decision Process
Buyer Decision Making Process
The actual purchase
decision is part of a much
larger buying process—starting with
need recognition through how you feel
after making the purchase. Marketers
want to be involved throughout the
entire buyer decision process.

25. The Buyer Decision Process
Need Recognition
Occurs when the buyer recognizes a problem or need triggered by:
Internal stimuli
External stimuli
The buying process starts long
before the actual purchase and
continues long after. In fact, it
might result in a decision not to
buy. Therefore, marketers must
focus on the entire buying process,
not just the purchase decision.
Internal stimuli when one of the person’s normal needs—for example,
hunger or thirst—rises to a level high enough to become a drive
External stimuli. For example, an advertisement or a discussion with a friend
might get you thinking about buying a new car.

26. The Buyer Decision Process
Information Search
Sources of Information
Personal sources—family and friends
Commercial sources—advertising, Internet
Public sources—mass media, consumer organizations
Experiential sources—handling, examining, using the product

27. The Buyer Decision Process
Evaluation of Alternatives
How the consumer processes information to arrive at brand choices
Note to Instructor
This Web link brings you to PriceGrabber—an online comparison shopping site. What is interesting on this site is on the left hand side, you can search by features. These features help a consumer know how to evaluate a product. For instance, this example is laptop computers and one can search by processing speed, processor type, screen size, etc.

28. The Buyer Decision Process
Purchase Decision
The act by the consumer to buy the most preferred brand
The purchase decision can be affected by:
Attitudes of others
Unexpected situational factors

29. The Buyer Decision Process
Post-Purchase Decision
The satisfaction or dissatisfaction that the consumer feels about the purchase
Relationship between:
Consumer’s expectations
Product’s perceived performance
The larger the gap between expectation and performance, the greater the consumer’s dissatisfaction
Cognitive dissonance is the discomfort caused by a post-purchase conflict

30. Market Structure and Demand
Business Markets
Market Structure and Demand
Fewer and larger buyers
Derived demand
Inelastic demand
Fluctuating demand
Buyer and seller dependency
Derived demand
Business demand that ultimately comes
from (derives from) the demand for
consumer goods.
inelastic demand; that is, the total demand
for many business products is not much affected by price changes, especially
in the short run. A drop in the price of leather will not cause shoe manufacturers
to buy much more leather unless it results in lower shoe prices that, in
turn, will increase the consumer demand for shoes.
fluctuating demand. The demand for
many business goods and services tends to change more—and more quickly—
than the demand for consumer goods and services does. A small percentage
increase in consumer demand can cause large increases in business demand.
Sometimes a rise of only 10 percent in consumer demand can cause as much
as a 200 percent rise in business demand during the next period.
buyer and seller are often much more dependent
on each other. B-to-B marketers may roll up their sleeves and work closely with their
customers during all stages of the buying process—from helping customers define problems,
to finding solutions, to supporting after-sale operation. They often customize their offerings
to individual customer needs.

31. Business Markets Decision Process
More complex
More decision participants
More professional purchasing effort

32. Business Buyer Behavior
Major Types of Buying Situations
Straight rebuy is a routine purchase decision such as reorder without any modification
Modified rebuy is a purchase decision that requires some research where the buyer wants to modify the product specification, price, terms, or suppliers
New task is a purchase decision that requires thorough research such as a new product

33. Business Buyer Behavior
Participants in the Business Buying Process
Buying center is all of the individuals and units that participate in the business decision-making process
Users
Influencers
Buyers
Deciders
Gatekeepers

34. Business Buyer Behavior
Participants in the Business Buying Process
Users are those that will use the product or service
Influencers help define specifications and provide information for evaluating alternatives
Buyers have formal authority to select the supplier and arrange terms of purchase
Deciders have formal or informal power to select and approve final suppliers
Gatekeepers control the flow of information

35. Market Segmentation
Market segmentation Dividing a market into smaller segments with distinct needs, characteristics, or behavior that might require separate marketing strategies or mixes.

36. Segmenting Consumer Markets
Market Segmentation
Segmenting Consumer Markets
Geographic segmentation
Demographic segmentation
Psychographic segmentation
Behavioral segmentation

37. Segmenting Consumer Markets
Market Segmentation
Segmenting Consumer Markets
Geographic segmentation divides the market into different geographical units such as nations, regions, states, counties, or cities

38. Segmenting Consumer Markets
Market Segmentation
Segmenting Consumer Markets
Demographic segmentation divides the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality

39. Segmenting Consumer Markets
Market Segmentation
Segmenting Consumer Markets
Psychographic segmentation divides buyers into different groups based on social class, lifestyle, or personality traits
Note to Instructor
There are a whole group of products which are targeted to the affluent including hotels like Four Seasons, which is mentioned in the book. Their products offerings are deluxe:
Kids in the City package for $520 a night and, among other things, enjoy a visit in their room from the Ice Cream Man, who arrives with all the fixings to make any concoction they desire.
The Benjamin Hotel in New York City provides dog beds in a variety of styles and doggie bathrobes, as well as canine room service and DVDs for dogs.
At the Ritz-Carlton, Lake Las Vegas in Henderson, Nevada, the Love at Lake Las Vegas weekend package includes two nights in the 2,400 square foot presidential suite, helicopter and gondola rides, a champagne-tasting party on a yacht complete with rose petals strewn about and a string trio, use of a luxury car throughout the stay, in-room couples spa treatment, a $5,000 casino line of credit, a $50,000 shopping spree at Neiman Marcus, 14 dozen roses, and a butler-drawn Cristal champagne bath.

40. Segmenting Consumer Markets
Market Segmentation
Segmenting Consumer Markets
Behavioral segmentation divides buyers into groups based on their knowledge, attitudes, uses, or responses to a product
Occasions
Benefits sought
User status
Usage rate
Loyalty status
Note to Instructor
Occasion segmentation
Dividing the market into segments
according to occasions when buyers get
the idea to buy, actually make their
purchase, or use the purchased item.
Benefit segmentation
according to the different benefits that
consumers seek from the product.
Students often get confused with the difference between behavioral and psychographic segmentation. Behavior is more tied into how consumers use the product. A good illustration is greeting cards—ask students how their purchasing would be different when buying a birthday card for their mother versus one for a new boyfriend. In addition, ask them how people might look for different benefits when purchasing a car? Some might look for safety while others will look for the best gas mileage.

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