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12
Customer-Driven Marketing
McGraw-Hill/Irwin
© 2008 The McGraw-Hill Companies, Inc. All rights reserved.
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Nature of Marketing
• To create value by allowing people and
organizations to obtain what they need
and want
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The Exchange Relationship
• Exchange:
– The act of giving up something
(money, credit, labor, goods) in
return for something else
(goods, services, or ideas)
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The Exchange Process: Giving Up
One Thing in Return for Another
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Marketing Creates Utility
• Utility--a product’s ability to satisfy human
needs and wants
– Place
– Time
– Ownership
– Form
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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 customer’s needs through
coordinated activities that allow it to
achieve its own goals (profit)
Did You Know?
Trying to determine a customer’s true needs
is difficult because no one fully understands
what motivates people to buy.
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Evolution of the Marketing Concept
• The production orientation
– During the second half of the 19th century
• The sales orientation
– By the early part of the 20th century
• The marketing orientation
– By the 1950s
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Marketing Orientation
• Requires organizations to:
– Gather information about customer needs
– Share that information throughout the entire
firm
– Use that information to help build long-term
relationships with customers
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Developing Marketing Strategy
• Marketing strategy:
– A plan of action for developing pricing,
distributing and promoting products that meet
the needs of specific customers
• Two major components:
– Selecting a target market
– Developing the appropriate marketing mix
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Selecting a Target Market
• 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 effort
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Total-Market Approach
• The marketer tries to appeal to
everyone and assumes that all buyers
have the same needs
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Target Market Strategies TotalMarket Approach
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Market Segmentation
• Market Segmentation:
– A strategy to divide the total market into
groups of people who have relatively similar
product needs
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Market Segment
• A collection of individuals, groups, or
organizations who share one or more
characteristics and have similar product
needs and desires
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Minority Buying Power by
Race,1990 versus 2003 & 2005
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Niche Market
• Narrow market segment focus when
efforts are on one small, well-defined
segment that has a unique, specific set of
needs
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Bases for Segmenting Markets
•
•
•
•
Demographic
Geographic
Psychographic
Behavioristic
Did You Know?
During its first year of operation, sales of Coca-Cola averaged
just nine drinks per day for total first-year sales of $50. Today,
Coca-Cola products are consumed at the rate of one billion
drinks per day.
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The Keys to Successful Market
Segmentation
1. Consumers’ product needs must be
heterogeneous
2. Segments must be identifiable and divisible
3. The market must be divided so segment sales,
cost, and profit can be compared
4. One segment must have enough profit potential
to justify a special marketing strategy
5. The chosen segment must be reached by the
firm with a particular marketing strategy
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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 &
Information Systems
• Marketing research
– A systematic, objective process of getting
customer information to guide marketing
decisions
• Marketing information system
– A framework for assessing information about
customers from internal and external sources
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Collecting Data
• Primary data
– Marketing information that is observed,
recorded, or collected directly from
respondents
• Secondary data
– Information that is compiled inside or outside
an organization for some purpose other than
changing the current situation
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Buying Behavior
• The decision processes
and actions of people who
purchase and use
products
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Psychological Variables of
Buying Behavior
•
•
•
•
•
Perception
Motivation
Learning
Attitude
Personality
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Social Variables of Buying
Behavior
•
•
•
•
Social roles
Reference groups
Social classes
Culture
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How America Spends
If you had an extra $1,000 to spend, what would you
do with the money?
Save
31%
Pay debt
29%
Buy a luxury item,
vacation or gift
20%
16%
Spend on essentials
Give it to charity
0%
2%
5%
10%
15%
20%
25%
30%
35%
Source: “If you had an extra $1,000 to spend, what would you do with the
money?,” USA Today, January 11, 2006, p.B1.
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U.S. Chocolate Consumption
• Chocolate consumed by
Americans
– 11.7 lbs./person
• Increase in sales (2003 vs.
1998)
– 11%
• Favorite forms of chocolate
– Reese’s Peanut Butter Cups
– Kit Kat
– Popable Pieces (such as M&Ms)
Source: Sandra Yin (2004) “Chock Full of Gold,” American Demographics, February 1,
http:/demographics.com (accessed August 3, 2004).
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Consumers Showing a Preference for
Additional Ingredients in their Chocolate
Nuts
72%
Caramel
Peanut Butter
Crispies
Cookies
71%
64%
56%
50%
Coconut
Mint Flavor
Raisins
47%
45%
39%
Coffee Flavor
None of these
29%
2%
Source: Sandra Yin (2004) “Chock Full of Gold,” American Demographics, February 1,
http:/demographics.com (accessed August 3, 2004).
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The Marketing Environment
• External forces that directly or indirectly
influence the development of marketing
strategies
– Political
– Legal
– Regulatory
– Social
– Competitive
– Economic, and technological
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The Marketing Mix and the
Marketing Environment
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Obesity Share by Nation
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Solve the Dilemma
1. What do you think were the main concerns
with the Olympus 2-door sports coupe?
– Is there a market for a 2-seat, $32,000 sports car
when the Miata sells for significantly less?
2. Evaluate the role of the marketing mix in the
Olympus introduction.
3. What are some of the marketing strategies
auto manufacturers use to stimulate sale of
certain makes of automobiles?
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Explore Your Career Options
• How will a career in
marketing be enhanced by
knowledge about customer
buying behavior and
customer service?
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Additional Discussion Questions
and Exercises
1. Utility is the ability of a product to satisfy human
needs and wants.
– What are the four kinds of utility?
2. Why are intermediaries helpful in distribution?
3. What are some different forms of promotion?
4. What is the difference between primary data
and secondary data?
5. What are some sources for obtaining
secondary data?
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Chapter 12 Quiz
1. When a business segments markets on the basis of
personality characteristics, motives, and lifestyles, that
segmentation is based on
a.
b.
c.
d.
demographics
geographic factors
psychographics
behavioristic characteristics
2. The act of giving up one thing in return for something
else is
a.
b.
c.
d.
marketing
utility
an exchange
promotion
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Chapter 12 Quiz
3.
The psychological factor described as “changes in a
person’s behavior based on information and
experience” is termed:
a.
b.
c.
d.
4.
Perception
Motivation
Personality
Learning
In developing a marketing mix, what should be the
central focus of all marketing activities?
a.
b.
c.
d.
Price
Buyer or target market
Product
Promotion
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Multiple Choice Questions
about the Video
1. The person responsible for helping the Pike Place Fish
Market achieve such success is:
a.
b.
c.
d.
Emeril Lagassi
John Yokoyama
Frederick Taylor
Abraham Maslow
2. The only advertising done by Pike Place Fish Market is
on:
a.
b.
c.
d.
QVC
Food TV
CNN
Its Web site
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