Download Chapter 11

Ferrell Hirt Ferrell
A CHANGING WORLD
EIGHTH EDITION
FHF
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
part
Marketing: Developing
Relationships
5
Chapter 11 Customer-Driven Marketing
Chapter 12 Dimensions of Marketing Strategy
Chapter 13 Digital Marketing and Social Networking
FHF
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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
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Marketing
Marketing is NOT
 Manipulating consumers
 Just selling & advertising
Marketing IS
 A systematic approach to satisfying consumers
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Exchange
[
The act of giving up one thing (money,
credit, labor, goods) in return (exchange) for
something else (goods, services, ideas)
]
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The Exchange Process
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Functions of Marketing
 Buying
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Selling
Transporting
Storing
Grading
Financing
Marketing research
Risk-taking
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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
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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
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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”
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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
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Marketing Goals
Customer satisfaction
 Achieve business objectives
 Boost productivity
 Reduce costs
 Capture market share
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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
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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
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Market Orientation
[
An approach requiring organizations to gather
information about customer needs, share information
across the firm and use information to build longterm relationships with customers
]
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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
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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
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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
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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
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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
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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
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Target Market Strategies
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Bases for Market Segmentation
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Demographic
Geographic
Psychographic
Behavioristic
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Developing the Marketing Mix
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Product
[
A good, service, or idea that has tangible
and intangible attributes that provide
satisfaction and benefits to consumers
]
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Price
[
A value placed on a product or service
that is exchanged between a buyer and
seller
]
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Distribution
[
Making products available to consumers
in the quantities and locations desired
]
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Promotion
[
A persuasive form of communication that
attempts to expedite a marketing exchange by
influencing individuals and organizations to
accept goods, services and ideas
]
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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
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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.
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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
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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
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Buying Behavior
[
Decision processes and actions of people
who purchase and use products
]
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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
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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
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Understanding Buying Behavior
Trying to understand consumers is the best way to satisfy them
 No exact tools
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The Marketing Environment
External forces that directly and indirectly
affect marketing strategy
 Political, legal and regulatory forces
 Social forces
 Competitive and economic forces
 Technological forces
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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
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The Marketing Mix and
Marketing Environment
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