Transcript Developing Marketing Strategies to Satisfy Customers

Chapter 11
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•Marketing is the process of
planning and executing the
conception, pricing, promotion,
and distribution of ideas, goods,
and services to create exchanges
that satisfy individual and
organizational objectives.
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 Needs


and Wants
Need:
◦ Difference between a person's actual state
and his or her ideal state, provides the basic
motivation to make a purchase
Wants:
◦ Goods , services, and experiences that are
desirable in light of a person's experiences,
culture, and personality
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• Utility:Power of a good or service to satisfy a
human need.
• Form Utility-Consumer value created by converting raw
materials and other inputs into finished goods and services
• Time Utility- Consumer value added by making a
product available at a convenient time.
• Place Utility:Consumer value added by making a product
available in a convenient location
• Possession Utility: Consumer value created when
someone takes ownership of a product
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• Companies learn about their customers so they can deliver
quality products and provide good customer service. This
keeps customers satisfied and creates/maintains long-term
loyalty.
 Satisfying Customers and Keeping Them Loyal
 How do you know whether your customers are satisfied?
◦ Are you getting new customers?
◦ Are good customers leaving?
◦ What is your customer retention rate?
◦ Are your customers loyal?
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CONTROLABLE
Price
Product
Quality
Service
Quality
Image
CUSTOMER PERCEIVED VALUE
Customer Characteristics
UNCONTROLABLE
Innovation
Business Environment
LOYALTY
Market Share and Profitability
Shareholder Value
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Relationship Marketing:
◦ Focus on developing and maintaining long-term relationships
with customers, suppliers, and distributors for mutual benefit.
Database Marketing:
◦ Process of building, maintaining, and using customer
databases for purpose of contacting customers and
transacting business.
Data Mining:
◦ Finding patterns through data analysis
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The Buyer's Decision Process
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Need
Recognition
2
Information
Search
3
Evaluation of
Alternatives
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Purchase
Outcome
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Purchase
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Buyer's Culture

Social Class

Reference Groups

Self-image
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Situational Factors
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
Organizational Market:
◦ Customers who buy goods or services for resale or for use in
conducting their own operations

Industrial/Commercial

Resellers

Government

Consumer Markets:
◦ Individuals or households that buy goods or services for personal
use
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Examine Current
Marketing
Situation



Review
performance
Evaluate
competition
Examine internal
strengths and
weaknesses
Develop
Marketing
Strategy
Assess
Opportunities &
Set Objectives


Assess
product/market
opportunities
Set specific
measurable
objectives

Segment market

Choose target
market

Position market

Develop
marketing mix
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Demographics:
Study of statistical
characteristics of a population
Geodemographics:
Method of combining
geographic data with
demographic data to develop
profiles of neighborhoods
Geographics
Categorization of customers
according to their geographic
location
Psychographics:
Classification of customers on
the basis of their psychological
makeup
Behavior:
Categorization of customers according to their relationship with
products or response to product characteristics
Target Markets:
Specific customer groups or segments to whom a company wants to sell a
particular product.
Positioning:
Using promotion and other marketing mix elements to differentiate a good
or service from those of competitors in the mind of the prospective buyer
Differentiation:
Creating special benefits to put the product in a different position than the
competitors.
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Product
Price
Place (Distribution)
Promotion
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Chapter 12
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
Product:
◦ Good or service used as the basis of commerce—
anything offered to satisfy a customer’s wants or
needs
Tangible Products:
Things we can actually touch and possess
Intangible Products:
Services provided for our use or enjoyment, not for our
ownership
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GOODS
IDEAS
SERVICES
Tangible Dominant
Intangible Dominant
Organizational
Products
◦ Products sold to
firms
◦ Expense items
◦ Capital items
Consumer
Products
◦ Products sold to
consumers
◦ Convenience products
◦ Shopping products
◦ Specialty products
◦ Unsought goods
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Growth
Maturity
Decline
DVD
Players
Internet
VCRs
Cassette
Tapes
Sales Volume (units)
Introduction
+
0

Sales
Profits
Time
 Product
Mix:
◦ Complete list of all products that a
company offers for sale (width)
 Product
Line:
◦ A series of related products offered
by a firm (breadth)
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
Brand:

Brand Name:
◦ A name, term, sign, symbol, design, or
combination used to identify the products of a
firm and differentiate them from competing
products
◦ Portion of a brand that can be expressed orally,
including letters, words, or numbers

Brand Equity:
◦ Degree to which brand name represents an asset
to its company
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

National Brands:
◦ Brands offered by a manufacturer
Private Brands:
◦ Carry retailer or wholesaler labels rather than manufacturer
labels

Generic Products:
Plain label, no advertising, and no brand name

Family Branding:
Brand name on a variety of related products

Co-Branding:
Two or more companies closely link brand names together for a single
product
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
Seven Factors Affecting Pricing Decisions

Marketing Objectives

Government Regulations
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Consumer Perceptions
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Manufacturing and Selling Costs

Competition

Consumer Demand

Wholesalers and retailers needs
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

Cost-Based Pricing:
◦ Markup added to the actual production costs to provide a
profit margin
Price-Based Pricing :
◦ Optimum price for a good or service established based on:

analysis of a product’s competitive advantages

users’ perception of the item

target market
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Method
of calculating the minimum
volume of sales needed at a given price to
cover all costs
Variable
Costs:
Business costs that increase with the number of
units produced
Fixed
Costs:
Business costs that remain constant regardless of
the number of units produced
Break-Even
Point:
Sales volume at a given price that will cover all of
a company’s costs
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
Promotion:
◦ Wide variety of persuasive techniques to
communicate with target markets and the general
public

Promotional Strategy:
◦ Statement or document that defines the direction
and scope of promotional activities useb to meet
marketing objectives
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Personal Selling
Advertising
Direct Marketing
Sales Promotion
Public Relations
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
Personal Selling:
◦ In-person communication between a seller and one
or more potential buyers

Advertising:
◦ Paid, nonpersonal communication to target market
from identified sponsor using mass
communications channels
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


Direct communication other than personal sales
contacts designed to effect a measurable response
Direct Mail:
◦ Advertising sent directly to potential customers,
usually through the U.S. Postal Service
Telemarketing:
◦ Selling or supporting the sales process over the
telephone
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
Wide range of events and activities designed to stimulate
interest in a product:
◦ Coupons
◦ Rebates/Premiums
◦ Contests
◦ In-store Demonstrations
◦ Free Samples
◦ Trade Shows
◦ Point-of-Purchase Displays
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


Nonsales communication that businesses have with their
various audiences (included both communication with the
general public and press relations)
News Release:
◦ Brief statement or video program released to the press
announcing new products, management changes, sales
performance, and other potential news items
News Conference:
◦ Gathering of media representatives at which companies
announce new information; also called a press briefing
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Integrated Marketing
Communications (IMC)

Strategy
of coordinating and
integrating all of a company's
communications and promotions efforts
with customers so it presents only one
voice and one message to the
marketplace, increasing promotional
and marketing effectiveness.
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Push Strategy:
Promotional approach designed to motivate
wholesalers and retailers to push a producer's
products to end users
Pull Strategy:
Promotional strategy that stimulates consumer
demand, which then exerts pressure on
wholesalers and retailers to carry a product
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Distribution Channels:
Systems for moving goods and services from producers to
customers
Also known as marketing channels
Distribution Mix:
Combination of intermediaries and channels a producer uses
to get a product to end users
Distribution Strategy:
Firm's overall plan for moving products to intermediaries
and final customers
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Marketing Intermediaries:
Businesspeople and organizations that channel goods and
services from producers to consumers, also called
“middlemen”
How Intermediaries Simplify Commerce

Provide sales force

Stock & deliver products
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Provide market information
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Assume risks
Provide promotional
support
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Provide financing
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Match buyers and sellers
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Break bulk


Gather an assortment of
goods
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Producer
Consumer Good & Services
Producer
Producer
Producer
Producer
Producer
Agent/Broker
Consumer
Retailer
Consumer
Wholesaler
Retailer
Consumer
Wholesaler
Retailer
Consumer
Business Good & Services
Wholesaler
Consumer
Consumer
Channels for Services
Most service marketers use a direct
channel to reach their customers.
Examples:

Hair stylists

Lawyers

Accounting firms
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Wholesalers:
Sell products to other firms for resale or for
organizational use
Industrial Distributors:
Sell to industrial customers, rather than to retailers
Retailers:
Sell goods and services to individuals for their own
use rather than for resale
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Mail-Order Firms
Companies that sell products through catalogs and ship
them directly to customers
Direct Selling
Vending machines, telemarketers, and door-to-door
direct sellers, etc.
Electronic Retailing
Internet, interactive kiosks, and television home
shopping, etc.
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