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Customer-Driven Marketing McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. Nature of Marketing To create value by allowing people and organizations to obtain what they need and want 12-3 The Exchange Relationship Exchange: The act of giving up something (money, credit, labor, goods) in return for something else (goods, services, or ideas) 12-4 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved The Exchange Process: Giving Up One Thing in Return for Another 12-5 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Marketing Creates Utility Utility--a product’s ability to satisfy human needs and wants Place Time Ownership/Possession Form Information 12-6 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Functions of Marketing Selling Pricing Channel Management Product Service Management Marketing Information Management Promotion Market Planning 12-7 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved 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. 12-8 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved 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 12-9 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved 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 12-10 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved 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 12-11 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved 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 12-12 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Total-Market Approach The marketer tries to appeal to everyone and assumes that all buyers have the same needs 12-13 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Market Segmentation Market Segmentation: A strategy to divide the total market into groups of people who have relatively similar product needs 12-14 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Market Segment A collection of individuals, groups, or organizations who share one or more characteristics and have similar product needs and desires 12-15 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Niche Market Narrow market segment focus when efforts are on one small, well-defined segment that has a unique, specific set of needs 12-16 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Bases for Segmenting Markets Demographic Geographic Psychographic Product Usage 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. 12-17 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Developing the Marketing Mix 12-18 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved 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 12-19 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Price A value placed on a product or service that is exchanged between a buyer and seller 12-20 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Distribution Making products available to consumers in the quantities and locations desired 12-21 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Promotion A persuasive form of communication that attempts to expedite a marketing exchange by influencing individuals and organizations to accept goods, services, and ideas 12-22 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved 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 12-23 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved 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 12-24 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Buying Behavior The decision processes and actions of people who purchase and use products 12-25 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Motives of Buying Behavior Rational Emotional 12-26 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Social Variables of Buying Behavior Social roles Reference groups Social classes Culture 12-27 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved The Marketing Mix and the Marketing Environment 12-28 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Review Questions 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 12-29 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved Review Questions 3. The psychological factors such as love and affection, often affect buying decisions. This is an example of what type of buying motive. a. Emotional b. Rational 4. 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 12-30 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved