Transcript Document
WHAT IS MARKETING? Marketing Organizational function and set of processes for creating, communicating, and delivering value to customers and for man- aging customer relationships in ways that benefit the organization and its stakeholders. Exchange process Activity in which two or more parties give something of value to each other to satisfy perceived needs. How Marketing Creates Utility Utility Want-satisfying power of a good or service. • Time utility Making a good or service available when customers want to purchase it. • Place utility Making a product available in a location convenient for customers. • Ownership utility Orderly transfer from the seller to the buyer. Emergence of the Marketing Concept Marketing concept Company-wide consumer orientation to promote long-run success. • Firm starts with analysis of customers’ needs and works backward to offer products that fulfill them. • Explained by shift from sellers’ market in which goods and services are relatively scarce to buyers’ market in which they are relatively plentiful. Delivering Added Value Through Customer Satisfaction and Loyalty • Firm starts with analysis of customers’ needs and works backward to offer products that fulfill them. Customer satisfaction Ability of a good or service to meet or exceed a buyer’s needs and expectations. • Increasing customer loyalty just five percent equals significant increases in lifetime profits per customer. Customer Satisfaction and Feedback • Can get feedback through toll-free telephone hotlines, customer satisfaction surveys, customer complaints, and other ways. DEVELOPING A MARKETING STRATEGY • First, study and analyze potential target markets and choose among them. • Second, create a marketing mix to satisfy the chosen market. Applying Marketing Research Data • As accuracy of research information increases, so does the effectiveness of the marketing strategies. • Example: GM’s H3 Hummer research Data Mining Data mining Computer searches of customer data to detect patterns and relationships. • Uses data warehouses, sophisticated customer databases that allow managers to combine data from several different organizational functions. • Example: Walmart’s use to determine local preferences and tailor its inventory appropriately. MARKET SEGMENTATION Market segmentation Process of dividing a total market into several relatively homogeneous groups. How Market Segmentation Works Segmenting Consumer Markets Geographic Segmentation • Divides market into homogeneous groups on the basis of their locations. Demographic Segmentation • Divides market on the basis of various demographic or socioeconomic characteristics. Psychographic Segmentation • Divides consumer market into groups with similar psychological characteristics, values, and lifestyles. Product-Related Segmentation • Divides market based on buyers’ relationship to the good or service. Segmenting Business Markets • Resembles segmentation for consumer markets, but some methods differ. Steps in the Consumer Behavior Process CREATING, MAINTAINING, AND STRENGTHENING MARKETING RELATIONSHIPS Relationship marketing Developing and maintaining long-term, cost-effective exchange relationships with partners. Benefits of Relationship Marketing • Lower costs and higher profits for the business. • Efficient targeting of best customers that increases the lifetime value of a customer. • Stronger relationships with business partners and opportunities to combine capabilities and resources to better accomplish goals. Tools for Nurturing Customer Relationships • 80/20 principle: Frequent customers have a higher lifetime value, so businesses allocate resources accordingly. Frequency Marketing and Affinity-Marketing Programs • Frequency marketing Reward purchasers with cash, rebates, and other premiums. • Affinity programs Solicit involvement based on common interest. Example: Credit card with baseball team logo • Comarketing Businesses jointly market each others’ products. • Cobranding Firms link their names in a single product. One-on-One Marketing • Customizing products and marketing and rapidly delivering goods.