Chapter Thirteen

Marketing: Helping Buyers Buy

Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

• Marketing -- The activity, set of institutions and processes for creating, communicating, delivering, and exchanging offerings with value for customers, clients, partners, and society at large.

• Helping the buyer buy

WHAT’S MARKETING?

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FOUR ERAS of U.S. MARKETING

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• The general philosophy was “Produce what you can because the market is limitless.”

1. The PRODUCTION ERA

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• After mass production arrived, the focus turned from production to persuasion.

2. The SELLING ERA

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• After WWII, a consumer spending boom developed.

• Businesses knew they needed to be responsive to consumers if they wanted their business.

3. The MARKETING CONCEPT ERA

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• 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.

3. Profit Orientation -- Focusing on the goods and services that will earn the most profit.

APPLYING the MARKETING CONCEPT

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• Customer Relationship Management (CRM) -- Learning as much as you can about customers and doing what you can to satisfy or exceed their expectations.

• Organizations seek to enhance customer satisfaction building long-term relationships.

4. The CUSTOMER RELATIONSHIP ERA

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THE MARKETING MIX

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ELEMENTS IN THE MARKETING MIX

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Product

Marketing

Program

Place

Promotion

Buy at Computers

‘R Us

Price

PRODUCTChapter 14

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PRODUCT

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Any physical good, service, or idea that satisfies a want or need; plus anything that would enhance the product in the eyes of the consumers, such as the brand

DEVELOPING a PRODUCT

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•Concept Testing•Prototypes•Test Marketing•Package Design/Brand Name

• Test Marketing -- Testing product concepts among potential product users.

• Brand Name -- A word, letter, or a group of words or letters that differentiates one seller’s goods from a competitor’s.

DEVELOPING a PRODUCT

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PRICEChapter 14

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• Pricing products depends on many factors:

- Competitors’ prices

- Production costs

- Distribution

PRICING a PRODUCT

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PRICING STRATEGIES

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•Cost-Plus

•Value-Based

•Competitive

•High/Low Price Strategies

• Skimming

• Discount

• Loss-Leader

• Psychological

PLACEChapter 15

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PLACE (Distribution)

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•Getting the product to the right place•Once the product is manufactured, you must choose how to get it to the consumer

Marketing Intermediaries are important in place strategies because getting a product to consumers is critical.

PLACING a PRODUCT

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PROMOTIONChapter 16

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• 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

- Sales promotions

PROMOTING the PRODUCT

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PROVIDING MARKETERS WITH INFORMATION

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• Marketing Research and Forecasting -- Analyzing markets to determine challenges and opportunities, and finding the information needed to make good decisions.

• Research is used to identify products consumers have used in the past and forecast what, and how much, they want in the future.

• Research uncovers market trends and attitudes held by company insiders and stakeholders.

SEARCHING for INFORMATION

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1. Defining the problem or opportunity and determining the present situation.

FOUR STEPS in the MARKETING RESEARCH PROCESS

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• What’s the present situation?

• What are the alternatives?

• What information is needed?

• How should the information be gathered?

DEFINING the PROBLEM or OPPORTUNITY

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2. Collecting research data.

FOUR STEPS in the MARKETING RESEARCH PROCESS

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• Secondary Data -- Existing data that has previously been collected by sources like the government.

COLLECTING SECONDARY RESEARCH DATA

• Secondary data incurs little or no expense and is usually easily accessible.

• Secondary data doesn’t always provide all the needed information for marketers.

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• 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.

COLLECTING PRIMARY RESEARCH DATA

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3. Organizing and Analyzing the data.

FOUR STEPS in the MARKETING RESEARCH PROCESS (cont.)

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• Marketers must first organize the data

• Marketers then turn the data into useful information.

ORGANIZING and ANALYZINGthe DATA

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4. Choosing the best solution and implementing it.

FOUR STEPS in the MARKETING RESEARCH PROCESS (cont.)

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• Must use their analysis to plan strategies and make recommendations.

• Finally, marketers must evaluate their actions and determine if further research is needed.

IMPLEMENTING the DECISION

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DIFFERENT MARKETS

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TWO MARKETS

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1. Consumer – B2C

2. Business-to-Business – B2B

• Consumer Market -- All the individuals or households that want goods and services for personal use and have the resources to buy them.

The CONSUMER and B2B MARKET

• Business-to-Business (B2B) -- Individuals and organizations that buy goods and services to use in production or to sell, rent, or supply to others.

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CONSUMER MARKET

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• 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.

MARKETING to CONSUMERS

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• 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, interests, and opinions.

SEGMENTING the CONSUMER MARKET

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• Benefit Segmentation -- Dividing the market according to product benefits the customer prefers.

• Volume (Usage) Segmentation -- Dividing the market by the volume of product use.

SEGMENTING the CONSUMER MARKET

(continued)

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• Mass Marketing -- Developing products and promotions to please large groups of people.

• Relationship Marketing -- Rejects the idea of mass production and focuses toward custom-made goods and services for customers.

MASS MARKETING vs. RELATIONSHIP MARKETING

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1. Problem recognition

2. Search for information

3. Evaluating alternatives

4. Purchase decision

5. Post-purchase evaluation (cognitive dissonance)

STEPS in the CONSUMER DECISION-MAKING PROCESS

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The CONSUMER DECSION MAKING PROCESS AND OUTSIDE INFLUENCES

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BUSINESS MARKET

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• B2B marketers include:

- Manufacturers

- Wholesalers and retailers

- Hospitals, schools and charities

- Government

• Products are often sold and resold several times before reaching final consumers.

BUSINESS-to-BUSINESS MARKET (B2B)

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• There are relatively few customers.

• Customers tend to be large buyers.

• Markets are geographically concentrated.

• Buyers are more rational than emotional.

B2B MARKET DIFFERENCES

• Sales are direct.

• Promotions focus heavily on personal selling.

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YOUR PROSPECTSIN MARKETING

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There is a wider variety of careers in marketing than in most business areas