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11
LO1 What are the objectives, processes and scope
of marketing?
Marketing:
LO2 What is the customer’s role in marketing?
Building Profitable
Customer Connections
LO3 What are the elements of the marketing
strategy?
LO4 What is the decision-making process for
consumers? Businesses?
LO5 What are the key elements of marketing
research?
LO6 How have social responsibility and technology
impacted marketing?
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© The Studio Dog/Photodisc/Getty Images
American Marketing
Association Definition
Marketing – the activity, set of institutions,
and processes for creating, communicating,
delivering, and exchanging offerings that
have value for customers, clients, partners,
and society at large
3
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Marketing
Process of planning and executing the conception, pricing, promotion and distribution of ideas, goods
and services to facilitate exchanges that satisfy customer needs and organization objectives
Product
Pricing
Ideas
Promotion
Services
Place
Goods
2 Important Functions
Facilitate Exchanges
(Encourage Purchase)
Satisfy Customer
Needs
4
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Marketing Functions
5
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Marketing: Getting Value
by Giving Value
Form
Utility
Time
Utility
Utility created by converting production
inputs into finished products (ex. BMW
car, Apple iPhone)
The ability of
Utility created by making a product
available when customers wish to
purchase it (ex. fast food after
midnight, Christmas trees after
Thanksgiving)
goods
and services to
Place
Utility
Utility created by making a product
available at a location where
customers wish to purchase it (ex.
popcorn at movie theatre, a pair of
jeans at department store)
satisfy wants.
Possession /
Ownership
Utility
Utility created by transferring title
(or ownership) of a product to a buyer (ex.
credit card acceptance at stores, finance depts
at car dealerships)
6
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The Scope of Marketing:
It’s Everywhere!
• People Marketing
• Place Marketing
• Event Marketing
• Idea Marketing
7
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The Evolution of Marketing: From the
Product to the Customer
8
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Managing Customer Relationships
 Marketing Concept: business philosophy that a firm should
continually try to offer products that satisfy customers needs while
also making a business profit
•
•
•
Communicate with 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: establishing long-term, mutually satisfying
buyer-seller relationships
 Customer relationship management (CRM):
using information about customers to create marketing strategies
that develop and sustain desirable customer relationships


Ex. Gap Cards, “VIP” grocery store cards, frequent flyer programs, Starbucks
“registered” cards
Good CRM: 1) Provide Value (product benefits > product cost), 2) Satisfy
Customers (meet or exceed their expectations), and 3) Develop Loyalty (trust
between seller and buyer, repeat customers)
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or
Understanding Today’s Customers
 Today’s Customers are:
•
Sophisticated
•
Demanding
•
Price Sensitive
 Why is Customer Satisfaction Important?
•
Getting new customers costs more than keeping them.
•
Long-term customers boost profits.
•
Satisfied customers tell their friends.
•
Customers pay more for good service.
•
Unhappy customers spread the word.
10
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The Customer: Front and Center
Customer Relationship
Management (CRM)
Limited
Relationships
Value
Customer
Satisfaction
Full
Partnerships
Customer Loyalty
11
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Perceived Value versus Actual Value
•
•
•
•
Low cost does not mean value
Value is a relationship between cost and benefits
Loyal customers will pay more for their products
Creating value is not enough
Customers must believe
that your product is simply
uniquely qualified to meet
their needs
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Customer Satisfaction
You have satisfied customers when you deliver
perceived value above and beyond their
expectations, but
 Don’t overpromise
 Don’t underpromise
13
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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
2 Main Types of Markets
1) Consumer markets
•
Purchasers and/or household members who intend to consume or
benefit from the purchased products and who do not buy products to
make a profit
2) 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-to-day operations
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Consumer Markets versus Business
Markets
Consumer Markets
Products for
personal
consumption
Business Markets
How will the
buyer use the
product?
Products used
directly or
indirectly to
produce other
products
Different approaches to select target markets.
15
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Developing Your Marketing Plan
(Strategy)
 Marketing Strategy / Plan
• A formal plan that will enable an organization to make the best
use of its resources and advantages to meet its objectives
•
Consists of 2 Basic Steps:
1) Identify your Target Market
2) Create your Marketing Mix (a combination of product, price, distribution,
and promotion developed to satisfy a particular target market)
16
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Developing Marketing Strategy (Plan)
cont.
 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
17
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A Well-Chosen Target Market
Size: There must be enough people in your target group to
support a business
Profitability: The people must be willing and able
spend more than the cost of producing and marketing the product
Accessibility: Your target must be reachable through
channels that your business can afford
Limited Competition: Look for markets with
limited competition; a crowded market is tough to crack
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Consumer Market Segmentation
• Demographic
• Geographic
• Psychographic
• Behavioral
© 2012 Zappos.com, Inc. or its affiliates.
• Combination (i.e. Geodemographic)
• Marketers may select multiple segments to target
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or
Bases of Segmentation Chart
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Color Me…Hungry?!
Surrounding fast-food customers with red, yellow, and orange encourages
them to eat a lot quickly and leave.
• Marketing researchers
found that American
consumers associate red
with energy, passion,
speed, and hunger.
• Purple is royalty, luxury,
dignity, spirituality,
nightmares, craziness
©David P. Smith/ Shutterstock.com
Source: The psychology of color in marketing by June Campbell, accessed March 19, 2005, UCSI website, http://www.ucsi.cc/webdesign/color-marketing.html; Color psychology in marketing by Al Martinovic, June 21, 2004, ImHosted website, http://developers.evrsoft.com/article/web-design/graphics-multimedia-design/color-psychology-in-marketing.shtml; Colors that sell by
Suzanne Roman, November 29, 2004, ImHosted website, http://developers.evrsoft.com/article/web-design/graphics-multimedia-design/colors-that-sell.shtml; Reinvent Wheel? Blue Room. Defusing a Bomb? Red Room. By Pam Belluck, February 6, 2009, New York Times website, http://www.nytimes.com/2009/02/06/science/06color.html, accessed February 26, 2009.
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or
The 4P’s of Marketing: Creating The
Marketing Mix
Product
Price
Decisions about product’s
design, purpose, brand
name, packaging, and
warranties
Decisions based on price
setting (what to charge for
product) including
rebates, and discounts
Promotion
Place (Distribution)
Decisions that sellers use
to persuade and
communicate to people
to buy their products /
services
Decisions based on
moving products from
producers to consumers
(marketing channels)
22
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The Marketing Environment
• Markets must conduct
environmental scanning to
analyze the external
environment
• External environment
includes competition and
market share analysis
• Key external factors must be
considered:





Economic
Social/Cultural
Technological
Political/Legal
Competitive
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The Global Marketing Environment
• The world market has become more
accessible to every business
• Understanding the marketing environment
is more important
• Researching opportunities in other
countries is a growing challenge
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Customer Behavior: Decisions! Decisions!
Decisions!
Understanding customers is critical
• Why do people buy one
product but not
another?
• How do they use the
products they buy?
©Yuri Arcurs/ Shutterstock.com
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Consumer Decision Process and How
Marketing Can Impact This Process
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Elements That Influence the Consumer
Decision-Making Process
27
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Marketing Research: So What Do They
REALLY Think?
Marketing research involves gathering,
interpreting, and applying information to
uncover opportunities and challenges
 Identify external opportunities
 Monitor and predict customer behavior
 Evaluate and improve marketing mix
Why to find information?
1) Secondary Data – Information that already exists, has already
been collected
2) Primary Data – Information collected specific to the problem
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duplicated,
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Research Data Comparison
Secondary Data:
Existing Data
Primary Data: New
Data that is Compiled
Lower Cost
More Expensive
May not be Specific
Customized
Frequently Outdated
Fresh, New
Available to Competitors
Proprietary
29
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Primary Research Tools
Observation Research –
the researcher does not
directly interact with the
research subject
• Scanner Data
• Traffic counters
• Garbage Analysis
Survey Research – the
researcher does interact
with the research
subjects
• Questionnaires
• Interviews
• Focus Groups
30
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11
Looking Back
• What are the objectives, processes and scope of marketing?
• What is the customer’s role in marketing?
• What are the elements of the marketing strategy?
• What is the decision-making process for consumers? Businesses?
• What are the key elements of marketing research?
• How have social responsibility and technology impacted marketing?
31
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