12 1 Business in a Changing World Chapter

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Business in a Changing World Chapter 12 Customer-Driven Marketing Mc. Graw-Hill/Irwin Copyright © 2009 by the Mc. Graw-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. 12 -4

The Importance of Marketing Planning & execution to satisfy customer goals – • Product development • Product pricing • Product promotion • Distribution of goods, ideas, services 12 -5

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. 12 -6

The Nature of Marketing • Marketing is NOT – • Manipulating consumers • Selling & advertising • Marketing IS – • Satisfying consumers 12 -7

Marketing The Exchange Relationship – act of giving up one thing (money, credit, labor, goods) in return (exchange) for something else (goods, services, or ideas) 12 -8

Marketing – The Exchange Relationship The Exchange Process: Giving Up One Thing in Return for Another 12 -9

Functions of Marketing Industry groups use marketing to increase demand for the industry’s product. America’s Beef Producers 12 -10

Functions of Marketing • Buying • Selling • Transporting • Storing • Grading • Financing • Marketing research • Risk taking 12 -11

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. 12 -12

The Marketing Concept • Marketing Goal – • Customer satisfaction • Achieve business objectives • Boost productivity • Reduce costs • Capture market share 12 -13

Implementing the Marketing Concept • Good information re: customer wants • Consumer orientation • Coordinate organizational efforts Customer’s perception of value = measure of success 12 -14

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 12 -15

The Marketing Concept Production Orientation – 19 th century • manufacturing efficiency Sales Orientation – early 20 th century • Supply exceeds demand – need to “sell” products Marketing Orientation – 1950’s • First determine what customers want 12 -16

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. 12 -17

Marketing Orientation Wrigley’s sells products in 180 countries. Continues to reinvent itself; in 2008, merger with candy maker Mars. 12 -18

Developing a Marketing Strategy Marketing strategy – plan of action for developing, pricing, distributing, and promoting products meeting the needs of specific customers. 12 -19

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). 12 -20

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). 12 -21

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. 12 -22

Market Segmentation Minority Buying Power by Race, 1990 versus 2003 & 2005 12 -23

Total-Market Approach 12 -24

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) 12 -25

Market Segmentation Approaches Niche marketing – narrow segment focus usually on one small well-defined group with a unique and specific set of needs. (Ice. Cream. Source. com) 12 -26

Bases for Market Segmentation • Demographic • Geographic • Psychographic • Behavioristic 12 -27

Developing the Marketing Mix 12 -28

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 -29

Price A value placed on a product or service that is exchanged between a buyer and seller 12 -30

Distribution Making products available to consumers in the quantities and locations desired 12 -31

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 -32

Marketing Research Systematic and objective process to collect information about potential customers. Guides marketing decisions. 12 -33

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 12 -34

Buying Behavior Buying behavior – decision processes and actions of people who purchase and use products. • Consumers personal and household • Organizations for business use 12 -35

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) 12 -36

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. 12 -37

Social Variables of Buying Behavior Social roles – set of expectations of individuals based on some position they occupy. 12 -38

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 12 -39

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 12 -40

The Marketing Mix and the Marketing Environment 12 -41