Download Business 7e - Pride, Hughes, Kapor

Chapter Thirteen
Building Customer
Relationships
Through Effective
Marketing
Marketing
• The process of planning and executing
the conception, pricing, promotion, and
distribution of ideas, goods, and
services to create exchanges that
satisfy individual and organizational
objectives
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Major marketing functions
• Exchange functions
– Buying
– Selling
• Physical distribution functions
– Transportation
– Storing
• Facilitating functions
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–
–
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Financing
Standardizing and Grading
Risk taking
Gathering information
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Types of Utility
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The Marketing Concept
• To achieve success, a business must:
– Talk to its potential customers to assess their needs
– Develop a good or service to satisfy those needs
– Continue to seek ways to provide customer satisfaction
• Relationship marketing
– Developing mutually beneficial long-term partnerships
with customers to enhance customer satisfaction and
to stimulate long-term customer loyalty
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How is a customer’s needs satisfied?
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Markets and Their Classification
• Market
– A group of individuals or organizations, or both, that
need products in a given category and that have the
ability, willingness, and authority to purchase such
products
• Consumer markets
– Purchasers and/or households members who intend
to consume or benefit from the purchased products
and who do not buy products to make a profit
• Business-to-business (industrial) markets
– Producer, reseller, governmental, and institutional
customers that purchase specific kinds of products for
use in making other products for resale or for day-today operations
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Developing Marketing Strategies
• Marketing strategy
– A plan that will enable an organization to
make the best use of its resources and
advantages to meet its objectives
– Consists of
• The selection and analysis of a target market
• The creation and maintenance of an appropriate
marketing mix (a combination of product, price,
distribution, and promotion developed to satisfy a
particular target market)
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Developing Marketing Strategies (cont’d)
• Target market selection and evaluation
– Target market
• A group of individuals, organizations, or both, for which a firm
develops and maintains a marketing mix suitable for the
specific needs and preferences of that group
– Market segment
• A group of individuals or organizations within a market that
share one or more common characteristics
– Market segmentation
• The process of dividing a market into segments and directing
a marketing mix at a particular segment or segments rather
than at the total market
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Types of Buying Behavior
• The decisions and actions of people
involved in buying and using products
• Consumer buying behavior
– The purchasing of products for personal or
household use, not for business purposes
• Business buying behavior
– The purchasing of products by producers,
resellers, governmental units, and
institutions
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Consumer Buying Decision Process and
Possible Influences on the Process
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 12th ed. Copyright © 2003 by Houghton Mifflin Company,
Adapted with permission.
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The American Consumer
• Consumer income
– Personal income
• The income an individual receives from all
sources less the Social Security taxes the
individual must pay.
– Disposable income
• Personal income less all additional personal
taxes
– Discretionary income
• Disposable income less savings and
expenditures on food, clothing, and housing
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Customer purchases
•
•
•
•
Why do customers buy?
What do customers buy?
Where do customers buy?
When do customers buy?
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Why Do Consumers Buy?
• They have a use for the product
• They like the convenience a product
offers
• They believe the purchase will
enhance their wealth
• They take pride in ownership
• They buy for safety
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What Do Consumers Buy?
• What percentage of disposable income
is pent on various categories of
products and services?
Source: “Consumer Expenditures in 2002,” Bureau of Labor Statistics, April 2002.
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Poverty
• People that are living at or below the
poverty line have no discretionary
income.
• The poverty line is the minimum level of
income deemed necessary to achieve
an adequate standard of living
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Where Do Consumers Buy?
• Influences on where to buy
– Perception of the store
– General impressions of an establishment’s
products, prices, and sales personnel
– Types of retail outlets
• Specialty store, department store, discount
store
– Location
– Product assortment
– Services such as credit terms, return
privileges, free delivery
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When Do Consumers Buy?
• When buying is most convenient
• Hours have stretched to include
evenings, holidays, and Sundays
• Many online catalog companies now
offer twenty-four hours a day, seven
days a week access
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