Download Chapter 12

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Business in a
Changing World
Chapter 12
Customer-Driven Marketing
McGraw-Hill/Irwin
Copyright © 2009 by the McGraw-Hill Companies, Inc. All rights reserved.
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David’s Bridal: Captured 30%
of the wedding dress market.
In the past 60 years, the bridal industry has
reinvented itself numerous times. David’s Bridal
enters the market in the 1990’s and has never
looked back.
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The Importance of Marketing
Planning & execution to satisfy customer
goals –
•Product development
•Product pricing
•Product promotion
•Distribution of goods, ideas, services
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The Nature of Marketing
MARKETING
The group of activities that add value and
designed to expedite transactions by creating,
distributing, pricing, and promoting goods,
services and ideas.
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The Nature of Marketing
•Marketing is NOT –
•Manipulating consumers
•Selling & advertising
•Marketing IS –
•Satisfying consumers
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Marketing
The Exchange Relationship – act of giving up one thing
(money, credit, labor, goods) in return (exchange) for
something else (goods, services, or ideas)
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Marketing – The Exchange Relationship
The Exchange Process: Giving Up One Thing in Return for Another
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Functions of Marketing
Industry groups use marketing
to increase demand for the
industry’s product.
America’s Beef Producers
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Functions of Marketing
•Buying
•Selling
•Transporting
•Storing
•Grading
•Financing
•Marketing research
•Risk taking
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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.
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The Marketing Concept
•Marketing Goal –
•Customer satisfaction
•Achieve business objectives
•Boost productivity
•Reduce costs
•Capture market share
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Implementing the Marketing Concept
•Good information re: customer wants
•Consumer orientation
•Coordinate organizational efforts
Customer’s perception of value = measure of success
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The Marketing Concept
•46% executives believe firm is customer focused
•67% executives frequently meet with customers
Marketing is more important as markets are more competitive
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The Marketing Concept
Production Orientation – 19th century
•manufacturing efficiency
Sales Orientation – early 20th century
•Supply exceeds demand – need to “sell” products
Marketing Orientation – 1950’s
•First determine what customers want
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The Marketing Concept
Marketing Orientation – approach requiring
organizations to gather information about
customer needs, share information across firm, use
information to build long-term relationships with
customers.
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Marketing Orientation
Wrigley’s sells products in 180 countries.
Continues to reinvent itself; in 2008, merger
with candy maker Mars.
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Developing a Marketing Strategy
Marketing strategy – plan of action for developing,
pricing, distributing, and promoting products
meeting the needs of specific customers.
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Developing a Marketing Strategy
Target Market – very specific group of consumers
that a company focuses its marketing efforts to
(e.g. Nike – golf clubs for recreational golfers).
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Developing a Marketing Strategy
Total-market approach – firm tries to appeal to
everyone and assumes that all buyers have similar
needs.
(e.g. Salt, sugar, agricultural products).
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Developing a Marketing Strategy
Market segmentation – strategy to divide the total
market into groups of people with relatively similar
product needs.
Market segment – collection of individuals, groups or
organizations sharing one or more characteristics thus
having relatively similar needs and desires for
products.
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Market Segmentation
Minority Buying Power by Race, 1990 versus
2003 & 2005
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Total-Market
Approach
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Market Segmentation Approaches
Concentration – company develops one
marketing strategy for a single market segment.
Specialization (e.g. Porsche’s focus on highincome individuals)
Multi-segment – aims at two or more segments
with strategy for each. (e.g. Raleigh bicycles for
racers, commuters, and children)
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Market Segmentation Approaches
Niche marketing – narrow segment focus usually
on one small well-defined group with a unique
and specific set of needs. (IceCreamSource.com)
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Bases for Market Segmentation
•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 benefit to consumers
Products should be sold at a profit
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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.
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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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Buying Behavior
Buying behavior – decision processes and actions
of people who purchase and use products.
•Consumers personal and household
•Organizations for business use
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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)
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Buying Behavior
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 of Buying Behavior
Social roles – set of
expectations of individuals
based on some position they
occupy.
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Buying Behavior
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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What Does Green Marketing Mean for
Marketers?
• Entrepreneurial marketers will be leaders
– new energy efficient products
– changing consumption patterns (3 R’s)
• Reduce carbon emissions
– source locally
– eco-friendly transportation
– master e-business strategies
• Green Marketing = Profits
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The Marketing Mix and the
Marketing Environment
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