Download Market Segment

FERRELL | HIRT | FERRELL
3e
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
PART
5
•
Chapter 11 Customer-Driven Marketing
•
Chapter 12 Dimensions of Marketing Strategy
•
Chapter 13 Digital Marketing and Social Networking
11-2
Marketing
A group of activities designed to expedite
transactions by creating, distributing,
pricing and promoting goods, services and
ideas
Creates value by allowing individuals and organizations
to obtain what they need and want
11-3
Marketing
Marketing is NOT
 Manipulating consumers
 Just selling & advertising
Marketing IS
 A systematic approach to satisfying
consumers
11-4
Exchange
The act of giving up one thing (money,
credit, labor, goods) in return
(exchange) for something else (goods,
services, ideas)
11-5
The Exchange Process
11-6
Functions of Marketing
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Buying
Selling
Transporting
Storing
Grading
Financing
Marketing research
Risk-taking
11-7
Creating Value
Value
 A customer’s subjective assessment of benefits
relative to costs in determining the worth of a
product
 customer value = customer benefits – customer costs
Benefits

Anything a buyer receives in an exchange
Costs
Anything a buyer must give up to obtain the
product’s benefits
 Monetary costs and time and effort expended to
procure the product

11-8
M&M’s Create Value
M&M’s uses personalization to:
 Increase market share
 Satisfy consumers with custom-created gifts
 Create value
 Reach out to new markets
• NASCAR
• Business-to-business markets
Launched http://www.mymms.com to connect
with consumers and offer personalized products
11-9
The Marketing Concept
The idea that an organization should try to
satisfy customers’ needs through coordinated
activities that also allow it to achieve its own
goals
 Walmart’s slogan “Save Money, Live Better”
11-10
Customer-Contact Employees
Must know what customers want
 They are not selling goods and services,
but:
• Ideas
• Benefits
• Philosophies
• Experiences
 Customers’ perception of value = Level of success
11-11
Marketing Goals
Customer satisfaction
 Achieve business objectives
 Boost productivity
 Reduce costs
 Capture market share
11-12
Netflix Gives Consumers
What They Want
Netflix has been very successful at providing
customers with what they want
 Recommendations feature helps customize the
experience for every customer
 Constantly developing new initiatives that add to
perceived value and enhance Netflix’s competitive
advantage
 Treats every interaction as a personal one
11-13
Evolution of the Marketing Concept
Production Orientation
 19th Century
• Manufacturing efficiency
Sales Orientation
 Early 20th Century
• Supply exceeds demand; a need to “sell” products
exists
Market Orientation
 1950s
• First determine what customers want
• New technologies are helping to improve
communication and are helping companies learn
what customers want
11-14
Market Orientation
An approach requiring organizations to
gather information about customer
needs, share information across the firm
and use information to build long-term
relationships with customers
11-15
Marketing Strategy
 A plan of action for developing, pricing,
distributing and promoting products meeting
the needs of specific customers
The Oreo cookie
 Market segmentation is geographic
 Variations in the cookie recipe
 Packaging may vary
 Some countries pair the brand name with different
company names
 Promotions change based on cultural subtleties
11-16
Market
 A group of people who have a need,
purchasing power and the desire and authority
to spend money on goods, services and ideas
Target Market
• A more specific group of consumers on whose needs
and wants a company focuses its marketing efforts
11-17
Total-Market Approach
 A firm tries to appeal to all consumers and
assumes that they all have similar needs
Salt, sugar, flour and white bread are all
examples of products that typically are
sold using a total market approach
11-18
Market Segmentation
 A strategy to divide the total market into
groups of people with relatively similar
product needs
Market Segment
 A collection of individuals, groups, or
organizations sharing one or more
characteristics, thus having relatively
similar needs and desires for products
11-19
Segmentation Approaches
Concentration Approach
 A market segmentation strategy whereby a company
develops one marketing strategy approach for a single
market segment
Multisegment Approach
 A market segmentation strategy whereby a company
aims its efforts at two or more segments, developing a
marketing strategy for each
11-20
Niche Marketing
 A narrow segment focus usually on one small
well-defined group with a unique and specific
set of needs
 Inland Marine Supply
• Based in Houston
• Fills grocery orders for ships with limited time at
dock
• Delivers to ships in refrigerated vans
• Small added fee
11-21
Target Market Strategies
11-22
Bases for Market Segmentation
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Demographic
Geographic
Psychographic
Behavioristic
11-23
Developing the Marketing Mix
11-24
Product
A good, service, or idea that has tangible
and intangible attributes that provide
satisfaction and benefits to consumers
11-25
Price
A value placed on a product or service
that is exchanged between a buyer and
seller
11-26
Distribution
Making products available to
consumers in the quantities and
locations desired
11-27
Promotion
A persuasive form of communication that
attempts to expedite a marketing exchange
by influencing individuals and
organizations to accept goods, services and
ideas
11-28
Marketing Research
 Systematic and objective process to collect
information about potential customers
 Guides marketing decisions
 May include data on age, income, ethnicity,
educational level, etc. of the target market and
how frequently they purchase the product
11-29
Marketing Information Systems
 A framework for accessing information
about customers from sources inside and
outside the organization
 Inside the organization:
• Continuous flow of information on prices, sales and
expenses
 Outside the organization:
• Data are available through public and private reports,
census statistics, digital media sources, etc.
11-30
Collecting Data
Primary Data

Marketing information that is observed, recorded
or collected directly from respondents (consumers)
Secondary Data

Information compiled inside or outside the
organization for some purpose other than
changing the current situation
11-31
Online Marketing Research
New information technologies are changing how
businesses learn about consumers and market their
products
 Digital media and online social networks
 Opportunity to reach new markets via the Internet
Virtual Testing
 Interactive multimedia research that combines sight,
sound and animation to improve testing of products
and their features
11-32
Buying
Buying Behavior
Decision processes and actions of
people who purchase and use
products
11-33
Psychological Variables for
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
11-34
Social Variables for
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
11-35
Understanding Buying Behavior
Trying to understand consumers is the best way
to satisfy them
 No exact tools
11-36
The Marketing Environment
External forces that directly and
indirectly affect marketing strategy
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Political, legal and regulatory forces
Social forces
Competitive and economic forces
Technological forces
11-37
Green Marketing
 Increasing trend toward green products
 “Green” versions of popular brands
Terra Choice is an environmental marketing agency
 Released a report “The Seven Sins of Greenwashing”
 Very little regulation of green marketing
 Consumers must be aware to make responsible choices
11-38
The Marketing Mix and
Marketing Environment
11-39