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Chapter 13
Marketing:
Helping
Buyers Buy
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
What is
Marketing?
WHAT’S MARKETING?
LG1
• Marketing -- The activity and processes for
creating, communicating, delivering, and exchanging
offerings with value for customers, clients, partners,
and society at large.
• Often think of marketing as the activities buyers and
sellers perform to facilitate mutually satisfying
exchanges.
13-2
What is
Marketing?
LG1
FOCUS of CONTEMPORARY
MARKETING
• Marketing today involves helping the buyer buy
through:
- Websites that help buyers find the best price,
identify product features, and question sellers.
- Blogs and social networking sites that cultivate
consumer relationships.
- includes decisions about the best way to get the
product to the consumer
13-3
The Evolution
of Marketing
FOUR ERAS of U.S. MARKETING
LG1
• Production Era
• Selling Era
• Marketing Concept Era
• Customer Relationship
Era
13-4
The Evolution
of Marketing
LG1
The PRODUCTION ERA
and
SELLING ERA
• The general philosophy
was “Produce what you
can because the market
is limitless.”
• We still see this what
industry?
• By 1920s, after mass
production, the focus
turned from production
to persuasion.
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The Evolution
of Marketing
The MARKETING CONCEPT ERA
LG1
• After WWII in 1945, a consumer spending boom
developed.
• Why did this spending boom happen?
• Businesses knew they needed to be responsive
to consumers if they wanted their business.
13-6
The Evolution
of Marketing
LG1
APPLYING the
MARKETING CONCEPT
• The Marketing Concept includes three parts:
1. Customer Orientation -- Finding out what
customers want and then providing it.
2. Service Orientation -- Making sure everyone in
an organization is committed to customer
satisfaction…from President to the delivery
people.
3. Profit Orientation -- Focusing on the goods and
services that will earn the most profit.
Took a long time to come around…finally in 1980s
business adopted these concepts which lead to
Customer Relationship management (CRM)
13-7
The Evolution
of Marketing
LG1
The CUSTOMER
RELATIONSHIP ERA
• Customer Relationship Management (CRM) -Learning as much as you can about customers and
doing what you can to satisfy or exceed their
expectations over time.
• Organizations seek to enhance customer
satisfaction building long-term relationships.
• Today firms like Priceline and Travelocity use
CRM that allow customers to build a relationship
with the suppliers.
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The Evolution
of Marketing
LG1
SERVICE with a SMILE
Six Steps for Keeping Your Customers Happy
• The cost of acquiring a new customer is 5x the
cost of retaining one. Here’s how to keep them:
1. Build trust
2. Emphasize the long term
3. Listen
4. Treat your customers like stars
5. Show appreciation
6. Remember employees are
customers too!
Source: Inc. Guidebook, Vol. 2 No. 5 and Entrepreneur, February 2010.
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The Marketing
Mix
The FOUR P’s
LG2
13-10
Designing a
Product to Meet
Consumer
Needs
LG2
DEVELOPING a PRODUCT
• Product -- A good, service, or idea that
satisfies a consumer’s want or need.
• Test Marketing -- Testing
products among potential product
users. Concept Testing: Creating
an accurate description and ask
people what they think of the
product.
• Brand Name -- A word, letter, or a
group of words or letters that
differentiates one seller’s goods
from a competitor’s.
13-11
Setting an
Appropriate
Price
LG2
PRICING and
PLACING a PRODUCT
• Pricing products depends on many factors:
- Competitors’ prices
- Production costs
- Distribution
• Middlemen are important in place strategies
because getting a product to consumers is
critical.
13-12
Developing an
Effective
Promotional
Strategy
PROMOTING the PRODUCT
LG2
• Promotion -- All the techniques sellers use to
inform people about their products and motivate
them to purchase those products.
• Promotion includes:
- Advertising
- Personal selling
- Public relations
- Word of mouth
- Sales promotions
- Relationships – listening and responding to
customer feedback
Photo Courtesy of: Uri Baruchin
13-13
Providing
Marketers with
Information
SEARCHING for INFORMATION
LG3
• Marketing Research -- Analyzing markets to
determine challenges and opportunities, and finding
the information needed to make good decisions.
• Research used to determine what customers have
purchased in the past, what situational changes have
occurred to change consumer preferences, and what
consumers are likely to want in the future.
13-14
The Marketing
Research
Process
LG3
FOUR STEPS in the MARKETING
RESEARCH PROCESS
1. Defining the problem or opportunity and
determining the present situation.
2. Collecting research data.
3. Analyzing the data.
4. Choosing the best solution and implementing it.
13-15
The Marketing
Research
Process
LG3
COLLECTING SECONDARY
RESEARCH DATA
• Secondary Data -- Existing data that has
previously been collected by sources like the
government.
• Secondary data incurs no
expense and is usually
easily accessible.
• Secondary data doesn’t
always provide all the
needed information for
marketers….leads to primary
data
13-16
The Marketing
Research
Process
LG3
COLLECTING PRIMARY
RESEARCH DATA
• Primary Data -- In-depth
information gathered by
marketers from their own
research.
• Telephone, online and
mail surveys, personal
interviews, and focus
groups are ways to
collect primary data.
13-17
The Marketing
Research
Process
FOCUS GROUPS
LG3
• Focus Group -- A group of people who meet under
the direction of a discussion leader to communicate
opinions.
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The Marketing
Research
Process
LG3
WAYS to FIND OUT WHAT
CONSUMERS THINK
• Conduct informal consumer surveys
• Host a customer focus
group
• Listen to competitor’s
customers
• Survey your sales force
• Become a “phantom”
customer
13-19
The Marketing
Environment
LG4
SCANNING the MARKETING
ENVIRONMENT
• Environmental Scanning -- The process of
identifying factors that affect marketing success.
• Factors involved in the
environmental scan include:
- Global factors
- Technological factors
- Sociocultural factors
- Competitive factors
- Economic factors
13-20
Two Different
Markets:
Consumer and
B2B
LG4
The CONSUMER and
B2B MARKET
• Consumer Market -- All the individuals or
households that want goods and services for
personal use and have the resources to buy them.
• Business-to-Business
(B2B) -- Individuals and
organizations that buy goods
and services to use in
production or to sell, rent, or
supply to others.
13-21
The Consumer
Market
MARKETING to CONSUMERS
LG5
• The size and diversity of the consumer market
forces marketers to decide which groups they
want to serve.
• Market Segmentation -- Divides the total market
into groups with similar characteristics.
• Target Marketing -- Selecting which segments an
organization can serve profitably.
• Campbell soup example…
13-22
Segmenting
the Consumer
Market
LG5
Different ways to
Segment the Consumer Market
• Geographic Segmentation -- Dividing the market
by cities, counties, states, or regions.
• Demographic Segmentation -- Dividing the
market by age, income, education, and other
demographic variables.
• Psychographic Segmentation -- Dividing the
market by group values, attitudes, and interests.
(continued)
13-23
Segmenting
the Consumer
Market
LG5
SEGMENTING the CONSUMER
MARKET
(continued)
• Benefit Segmentation -- Dividing the market
according to product benefits the customer prefers.
• Volume (Usage) Segmentation -- Dividing the
market by the volume of product use.
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Reaching
Smaller Market
Segments
LG5
MARKETING to
SMALL SEGMENTS
• Niche Marketing -- Identifies small but profitable
market segments and designs or finds products for
them.
13-25
Moving Toward
Relationship
Marketing
LG5
MASS MARKETING vs.
RELATIONSHIP MARKETING
• Mass Marketing -- Developing products and
promotions to please large groups of people. Selling
to as many people as possible; using mass media
like TV; so focused on competition that they often
become less responsive to the market; airlines are an
example of this
• Relationship Marketing-- Rejects the idea of
mass production and focuses toward custom-made
goods and services for customers.
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The Businessto-Business
Market
LG6
BUSINESS-to-BUSINESS
MARKET (B2B)
• B2B marketers include:
- Manufacturers
- Wholesalers and retailers
- Hospitals, schools and charities
- Government
• Products are often sold and resold several times before
reaching final consumers.
• B2B market involves the marketing of goods and
services to institutions that sell, rent, produce or supply
goods to others
13-27
The Businessto-Business
Market
B2B MARKET DIFFERENCES
from the consumer market
LG6
1) There are relatively few customers.
2) Customers tend to be large buyers.
3) Markets are geographically concentrated.
4) Buyers are more rational than emotional.
5) Sales are direct.
6) Promotions focus heavily on personal selling.
13-28