Transcript Chapter Twelve

11
Building Customer
Relationships
Through Effective
Marketing
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Learning Objectives
① Understand the meaning of marketing and the
importance of management of customer
relationships.
② Explain how marketing adds value by creating
several forms of utility.
③ Trace the development of the marketing concept
and understand how it is implemented.
④ Understand what markets are and how they are
classified.
⑤ Understand the two major components of a
marketing strategy—target market and marketing
mix.
Copyright ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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Learning Objectives (cont’d)
⑥ Explain how the marketing environment affects
strategic market planning.
⑦ Understand the major components of a marketing
plan.
⑧ Describe how market measurement and sales
forecasting are used.
⑨ Distinguish between a marketing information system
and marketing research.
⑩ Identify the major steps in the consumer buying
decision process and the sets of factors that may
influence this process.
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Marketing
•
•
•
•
Creating,
Communicating,
Delivering, and
Exchanging
Offerings that have
value for customers,
clients, partners, and
society at large
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4
Marketing Functions
Exchanging
Distributing
Facilitating
Financing
Buying
Transporting
Standardization
Risk Taking
Selling
Storing
Gathering
Information
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5
Managing Customer Relationships
Relationship marketing:
• Establishing long-term, mutually satisfying buyer-seller
relationships
Customer relationship management
(CRM):
• Using information about customers to create marketing
strategies that develop and sustain desirable customer
relationships
Customer lifetime value:
• Measure of a customer’s worth (sales minus costs) to a
business over one’s lifetime
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6
Managing Customer Relationships
Who do customers want?
Sometimes it’s more profitable
to retain customers by offering
them big rewards than
attracting new customers who
may never develop the same
loyalty.
© SUSAN VAN ETTEN
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7
Utility: The Value Added by Marketing
 The ability of a good or service to satisfy a
human need
 Kinds of utility
• Form utility: Created by converting production
inputs into finished products
• Place utility: Created by making a product
available at a location where customers wish to
purchase it
• Time utility: Created by making a product available
when customers wish to purchase it
• Possession utility: Created by transferring title
(ownership) of a product to a buyer
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Utility: The Value Added by Marketing
Putting products at the
customer’s fingertips.
Firms try to provide
customers with products
whenever and wherever
they need them.
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Utility: The Value Added by Marketing
Types of Utility
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The Marketing Concept
 Providing goods and services that satisfy
customers’ needs
 To achieve success, a business must:
• Communicate with potential customers to
assess their needs
• Develop a good or service to satisfy those
needs
• Continue to seek ways to provide customer
satisfaction
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11
The Marketing Concept
Tell us what you
really think.
Surveys can be
conducted in a variety of
ways: in-person, by mail
or fax, or online. Online
surveys have made it
very inexpensive for
firms to gather customer
feedback
© ALAMY CREATIVITY / ALAMY
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12
Evolution of the Marketing Concept
 Industrial revolution through the early
twentieth century
• Business effort directed toward production
to meet great demand
• Production orientation –
Emphasis on increased output
 1920s
• Production began to exceed demand
• Business efforts included selling goods
than just producing them
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13
Evolution of the Marketing Concept
• Sales orientation - Increased advertising,
enlarged sales forces, and occasionally,
high-pressure selling techniques
 1950s
• Business efforts focused on satisfying
customers’ needs
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Implementing the Marketing Concept
 Obtain information about
present and
potential customers
• Their needs
• Satisfaction of the
needs
• Improving products
• Customer opinions
about the firm
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© PIXSOOZ/SHUTTERSTOCK
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Implementing the Marketing Concept
 Provide a product that will satisfy customers
 Price the product at an acceptable and profitable
level
 Promote the product to potential customers
 Ensure distribution for product availability when
and where wanted
 Obtain information on the effectiveness of the
marketing effort and modify efforts as necessary
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16
Markets and Their Classification
 Market: Group of individuals or organizations,
or both, that need products in a given category
and that have the ability, willingness, and
authority to purchase such products
•
Consumer markets Purchasers and/or
households members who
intend to consume or benefit
from the purchased products
and who do not buy products
to make a profit
© ED BOCKSTOCK/SHUTTERSTOCK
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Markets and Their Classification
• Business-to-business (industrial) markets Purchase specific kinds of products for use
in making other products for resale or for
day-to-day operations
Producer markets
Reseller markets
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Markets and Their Classification
- Governmental markets - Buy goods and
services to maintain internal operations and
to provide citizens with such products as
highways, education, water, energy, and
national defense
- Institutional markets - Churches, not-forprofit private schools and hospitals, civic
clubs, fraternities and sororities, charitable
organizations, and foundations
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19
Developing Marketing Strategies
 Marketing strategy: Plan that will enable
an organization to make the best use of its
resources and advantages to meet its
objectives
• Consists of:
- The selection and analysis of a target market
- The creation and maintenance of an
appropriate marketing mix (product, price,
distribution, and promotion)
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Target Market Selection and Evaluation
 Target market: Group
of individuals,
organizations, or both,
for which a firm
develops and
maintains a marketing
mix suitable for the
specific needs and
preferences of that
group
Teenagers
Women
New
Parents
College
Students
Baby
Boomers
Men
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Target Market Selection and Evaluation
 Undifferentiated
approach: Directing a
single marketing mix at
the entire market for a
particular product
• Useful in only a
limited number of
situations
© SUSAN VAN ETTEN
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Target Market Selection and Evaluation
 Market segment:
Group of individuals
or organizations
within a market that
share one or more
common
characteristics
© B.BBLES PHOTOLIBRARY / ALAMY
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Developing Marketing Strategies
Reaching the right market
segments. Some skin care
products are aimed at women,
while others, such as the LAB
Series, are aimed at men. Very
few brands of moisturizers that
are aimed at both men and
women.
COURTESY OF THE ADVERTISING ARCHIVES
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Developing Marketing Strategies
Two pens, two different concentrated targeting
strategies.
They do not compete for the same customers.
COURTESY OF THE ADVERTISING ARCHIVES; ©J GROUP PHOTO
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25
Developing Marketing Strategies
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 17th ed. (Mason, OH;: South-Western/Cengage
Learning 2014). Adapted with permission.
Copyright ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
26
Developing Marketing Strategies
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 17th ed. (Mason, OH;: South-Western/Cengage
Learning 2014). Adapted with permission.
Copyright ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
27
Developing Marketing Strategies
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 17th ed. (Mason, OH;: South-Western/Cengage
Learning 2014). Adapted with permission.
Copyright ©2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
28
Market Segmentation
Demographics
Psychographics
Geographic
Behavioristic
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Advertisers’ Classification
of Audiences
Name
Age
Needs
Millennials
<25
Tech Savvy
Gen Xers
25-38
Media Savvy
Boomers
39-58
Matures
57+
Avid
Consumers
Practical,
pragmatic
Influencer
Media
saturated,
ethnically
diverse
More cynical
than millennials,
individualistic
Deny aging
process
Money
conscious
Source: “Audience Research,” MediaKnowAll, http://www.mediaknowall.com/Advertising/research.html
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CLASS EXERCISE
 Identify one or several characteristics or
variables that could be used to segment the
markets for each of these products.
• Recreational
vehicles (RVs)
• Hotel rooms
• Baby food
• Soft drinks
• Rolls Royce
automobiles
• Movies
• Snow tires
• Magazines
• Shoes
• Bicycles
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Marketing Mix
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Creating a Marketing Mix
The maker of All Small & Mighty has
developed a specific marketing mix for
the detergent. Who do you think the
product is aimed at?
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33
Marketing Strategy and the
Marketing Environment
 The marketing mix consists of elements that
a firm controls and uses to reach its target
market
 Forces that make up the external marketing
environment
•
•
•
•
•
•
Economic forces
Sociocultural forces
Political forces
Competitive forces
Legal and regulatory forces
Technological forces
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34
Developing a Marketing Plan
Written document that specifies an
organization’s resources, objectives,
strategy, and implementation and control
efforts to be used in marketing a specific
product or product group
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35
Developing a Marketing Plan
 Components of the Marketing Plan
•
•
•
•
•
•
•
Executive summary
Environmental analysis
SWOT analysis
Marketing objectives
Marketing strategies
Marketing implementation
Evaluation and control
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36
Market Measurement and
Sales Forecasting
 Sales forecast: Estimate of the amount of a
product that an organization expects to sell
during a certain period of time based on a
specified level of marketing effort
• Organizations use several forecasting methods
-
Executive judgments
Surveys of buyers or sales personnel
Time-series analyses
Correlation analyses
Market tests
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Marketing Information Systems
 System for managing marketing information
that is gathered continually from internal and
external sources
• Internal data sources
- Sales figures, product and marketing costs,
inventory levels, and sales force activities
• External data sources
- Suppliers, intermediaries, customers,
competitors, and economic conditions
• Outputs
- Sales reports, sales forecasts, buying trends,
market share
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38
Marketing Information Systems
Can you hear me now? Would
you interested in having a prerecruited group of your
customers ready and willing to
participate in your surveys at a
moment’s notice? If so, you
might want to sign up for online
software such as PortalPanel,
produced the marketing
research company Toluna.
© TOLUNA
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39
Marketing Research
Process of systematically gathering,
recording, and analyzing data concerning
a particular marketing problem
https://www.youtube.com/watch?v=M66Z
U2PCIcM
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Six Steps of Marketing Research
Define the
Problem
Investigate
Plan the
Research
Gather
Information
Interpret
the
Information
Reach a
Conclusion
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Using Technology to Gather and
Analyze Marketing information
 Database - Collection of information arranged
for easy access and retrieval
• Databases such as LEXIS-NEXIS, Reader’s
Digest
 Single-source data - Information provided by a
single firm
 Online information services - Offer subscribers
access to e-mail, websites, mailing lists
 Internet - Useful in accessing Web pages such
as Nielsen and Advertising Age
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Types of Buying Behavior
 Decisions and actions of people involved in
buying and using products
 Consumer buying behavior: Purchasing of
products for personal or household use, not for
business purposes
 Business buying behavior: Purchasing of
products by producers, resellers,
governmental units, and institutions
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43
Types of Buying Behavior
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44
Consumer Buying Behavior
Recognizing a problem.
Problem recognition is the
first stage of the consumer
buying decision process. This
ad makes consumers aware
of an environmental problem
they might not have known
they were contributing to.
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45
Consumer Buying Behavior
 Personal income: The income an individual
receives from all sources less the Social Security
taxes the individual must pay
 Disposable income: Personal income less all
additional personal taxes
 Discretionary income
• Disposable income less savings and
expenditures on food, clothing, and housing
• Of particular interest to marketers due to choice
of how to spend it
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46
Business Buying Behavior
 Business buyers consider a product’s quality,
its price, and the service provided by suppliers
 Business buyers are better informed than
consumers about products and generally buy
in larger quantities
 In a business, a committee or a group of
people, rather than just one person, decides
on purchases
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