Ferrell Hirt Ferrell M: Business 2

nd

Edition

FHF

Customer-Driven Marketing

McGraw-Hill/Irwin

FHF

Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.

Marketing

[

A group of activities designed to expedite transactions by creating, distributing, pricing, and promoting goods, services, and ideas

]

Creates value by allowing individuals and organizations to obtain what they need and want

FHF 12-3

Marketing is NOT

• • Manipulating consumers Just selling & advertising

Marketing IS

• A systematic approach to satisfying consumers FHF 12-4

Exchange

[

The act of giving up one thing (money, credit, labor, goods) in return (exchange) for something else (goods,

services, or ideas)

]

FHF 12-5

FHF The Exchange Process 12-6

The New Marketing Environment in Retail

Permanent discounts (Wal-Mart’s model) Taking market share rather than focusing on growth

• • Some stores are differentiating through going upscale Some are opening new stores to get greater market share

Focus on value

FHF 12-7

Functions of Marketing • • • • • • • • Buying Selling Transporting Storing Grading Financing Marketing research Risk-taking FHF 12-8

•

The idea that an organization should try to satisfy customers’ needs through coordinated activities that also allow it to achieve its own goals.

• Wal-Mart’s slogan “Save Money, Live Better” The Marketing Concept FHF 12-9

Yodle

Founded in 2005 Raised $25 million in venture capital Provides advertising services for small businesses

• • • Online promotion Personalized content Tracks success of advertising efforts FHF 12-10

Customer-Contact Employees

Must know what customers want They are not selling goods and services, but:

• • Ideas Benefits • • Philosophies Experiences

Customers’ perception of value= Level of success

FHF 12-11

Marketing Goals • • • • • Customer satisfaction Achieve business objectives Boost productivity Reduce costs Capture market share FHF 12-12

FHF Evolution of the Marketing Concept

Production Orientation

• 19th Century • Manufacturing efficiency

Sales Orientation

• • Early 20th Century Supply exceeds demand -need to “sell” products

Marketing Orientation

• • 1950s First determine what customers want 12-13

Marketing Orientation

[

An approach requiring organizations to gather information about customer needs, share information across firm,

]

use information to build long-term relationships with customers FHF 12-14

Marketing Strategy

A plan of action for developing, pricing, distributing, and promoting products meeting the needs of specific customers.

Specialty’s Café and Bakery

• • • • 25 bakery/café’s in U.S.

Introduced online ordering in 2009 in response to slow sales Now 40% of all orders are online Customers customize orders and pick them up without waiting FHF 12-15

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 efforts FHF 12-16

A firm tries to appeal to all consumers and assumes that they all have similar needs

• Salt, sugar, flour, white bread are all examples of products that typically are sold using a total market approach Total-Market Approach FHF 12-17

Market Segmentation

A strategy to divide the total market into groups of people with relatively similar product needs

Market segment

• A collection of individuals, groups or organizations sharing one or more characteristics thus having relatively similar needs and desires for products.

FHF 12-18

Segmentation Approaches Segmentation Approaches

Concentration Approach

• A market segmentation strategy whereby a company develops one marketing strategy approach for a single market segment

Multisegment Approach

• A market segmentation strategy whereby a company aims its efforts at two or more segments, developing a marketing strategy for each FHF 12-19

Niche Marketing

A narrow segment focus usually on one small well-defined group with a unique and specific set of needs.

Inland Marine Supply

• • • • Based in Houston Fills grocery orders for ships with limited time at dock Delivers to ships in refrigerated vans Small added fee FHF 12-20

FHF Target Market Strategies 12-21

Bases for Market Segmentation • • • • Demographic Geographic Psychographic Behavioristic FHF 12-22

FHF Developing the Marketing Mix 12-23

Product A good, service or idea that has

[

tangible and intangible attributes that provide satisfaction and benefits to

]

consumers FHF 12-24

Price

[

A value placed on a product or service that is exchanged between a buyer and seller

]

FHF 12-25

Distribution

Making products available to

[

consumers in the quantities and locations desired

]

FHF 12-26

Mobile Shopping

Prevalence of smart phones have led to more online shopping

• Amazon paired with iPhone to allow customers to shop for books online, and to read information about products • Sears even allows consumers to shop for refrigerators online

Customers expect online shopping to be available and easy

FHF 12-27

Promotion

[

A persuasive form of communication that attempts to expedite a marketing exchange by influencing individuals and organizations to accept goods, services, and ideas

]

FHF 12-28

Marketing Research

Systematic and objective process to collect information about potential customers

• Guides marketing decisions FHF 12-29

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 FHF 12-30

Buying Behavior

[

Decision processes and actions of people who purchase and use products

]

FHF 12-31

Psychological Variables for 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)

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 FHF 12-32

Social Variables for Buying Behavior

Social Roles

• Set of expectations of individuals based on some position they occupy

Reference Groups

• Groups with whom buyers identify and whose values or attitudes they adopt

Social Classes

•

Culture

Ranking of people into higher or lower positions of respect • Integrated, accepted pattern of behavior including thought, speech, beliefs, actions and artifacts FHF 12-33

Understanding Buying Behavior

Trying to understand consumers is the best way to satisfy them

• No exact tools FHF 12-34

The Marketing Environment

External forces that directly and indirectly affect marketing strategy

• • • • Political, legal and regulatory forces Social forces Competitive and economic forces Technological forces FHF 12-35

Green Marketing

Increasing trend toward green products “Green” versions of popular brands



Terra Choice

is an environmental marketing agency  Released a report

“ The Seven Sins of Greenwashing ”

 Very little regulation of green marketing  Consumers must be aware to make responsible choices FHF 12-36

The Marketing Mix and Marketing Environment FHF 12-37

FHF 12-38