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Ferrell Hirt Ferrell M: Business 2




Customer-Driven Marketing



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



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



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


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


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



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


FHF 12-25


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



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


• Process by which a person selects, organizes, and interprets information received from one’s senses. (hearing a radio ad, touching a product)


• Brings changes in behavior based on information and experience


• Positive or negative feelings about something


• 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


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