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11 ©2013 Cengage Learning. All Rights Reserved. o re n pos t eed Lteoa ra n p u b .l i A c l y a icgche tsss iRbel se e w e b ds .i t M e , yi n n © 2 0 1 3 ©2013 C Ceng ga ag g e L e a r n ii n ng g . A ll ll R Rights Reser rv ve ed. Ma ay n p pu po os s tt e ed d tt o o a a p ub b ll ii c c ll y y a ac cc ce es ss s ii b b ll e e w we eb bs s ii tt e e ,, ii n n w wh ho o ll e e o or r May not be scanned, copied or duplicated, w th ob lee socra ni nn epda, r ct .o p i e d o r d u p l i c a t e d , o r o ot be scanned, copied or duplicated, or ii n n p pa ar r tt .. 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? 2 © ©2 20 01 13 3 C Ce en ng ga ag ge e L Le ea ar rn n ii n ng g .. A A ll ll R R ii g gh h tt s s R Re es se er rv ve ed d .. M Ma ay y n no o tt p pu cc b ll e we o ll e r ii n po os s tt e ed d tt o o a a p ub b ll ii c c ll y y a ac ce es ss s ii b e w eb bs s ii tt e e ,, ii n n w wh ho e o or n b be e s sc ca an nn ne ed d ,, pa r tt .. p ar c co op p ii e ed d o or r d du up p ll ii c ca a tt e ed d ,, o or r © 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 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or Marketing Functions 5 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or The Scope of Marketing: It’s Everywhere! • People Marketing • Place Marketing • Event Marketing • Idea Marketing 7 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or The Evolution of Marketing: From the Product to the Customer 8 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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) ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, 9 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 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or The Customer: Front and Center Customer Relationship Management (CRM) Limited Relationships Value Customer Satisfaction Full Partnerships Customer Loyalty 11 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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 12 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or Customer Satisfaction You have satisfied customers when you deliver perceived value above and beyond their expectations, but Don’t overpromise Don’t underpromise 13 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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 14 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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 18 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, 19 or Bases of Segmentation Chart 20 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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. ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, 21 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 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in 23 be scanned, part. copied or duplicated, or 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 24 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or 25 duplicated, or Consumer Decision Process and How Marketing Can Impact This Process 26 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or Elements That Influence the Consumer Decision-Making Process 27 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or 28 duplicated, or 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 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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 ©2013 Cengage Learning. All Rights Reserved. May not posted to a publicly accessible website, in whole or in be scanned, part. copied or duplicated, or 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 © ©2 20 01 13 3 C Ce en ng ga ag ge e L Le ea ar rn n ii n ng g .. A A ll ll R R ii g gh h tt s s R Re es se er rv ve ed d .. M Ma ay y n no o tt p pu cc b ll e we o ll e r ii n po os s tt e ed d tt o o a a p ub b ll ii c c ll y y a ac ce es ss s ii b e w eb bs s ii tt e e ,, ii n n w wh ho e o or n b be e s sc ca an nn ne ed d ,, pa r tt .. p ar c co op p ii e ed d o or r d du up p ll ii c ca a tt e ed d ,, o or r