Transcript Chapter 11: MARKETING

CHAPTER 11: MARKETING
Building Profitable Connections with Your Customers
MARKETING IS MORE THAN ADVERTISING
Marketing – a set of processes for creating,
communicating, and delivering value to customers
and for managing customer relationships in ways
that benefit the organization and its stakeholders.
UTILITY
Form
Utility
Time
Utility
The ability of goods
and services to satisfy
wants.
Place
Utility
Ownership
Utility
THE SCOPE OF MARKETING: IT’S EVERYWHERE

People Marketing

Place Marketing

Event Marketing

Idea Marketing
THE EVOLUTION OF MARKETING: FROM
THE PRODUCT TO THE CUSTOMER
THE CUSTOMER:
FRONT AND CENTER
Customer Relationship
Management (CRM)
Limited
Relationships
Full
Partnerships

Value

Customer Satisfaction

Customer Loyalty
MARKETING STRATEGY
WHERE ARE YOU GOING AND HOW WILL YOU GET THERE?
THE ENVIRONMENT IS CONSTANTLY
CHANGING
When low carbohydrate
diets swept through
American culture, retail sales
of french fries plummeted,
dropping 2.9% in 2001,
3.3% in 2002, and 10% in
2003.
TARGET MARKET

A Well Chosen
Target Market:
 Size

Profitability

Accessibility

Limited
Competition
CONSUMER MARKETS VS BUSINESS MARKETS
Consumer Markets
Products for personal
consumption.
How will the
buyer use the
product?
Business
Markets
Products used
directly or indirectly
to produce other
products.
Different approaches to select target markets.
ANALYZING PROMOTIONAL
STRATEGIES
MARKET SEGMENTATION
Selecting a target market
begins with dividing your
market into segments.
Marketers may select
multiple segments to target.
CONSUMER MARKET SEGMENTATION

Demographic

Geographic

Psychographic

Behavioral
BUSINESS MARKET SEGMENTATION
• Geographic
• Customer-based
• Product-use based
TURN UP THE VOLUME ON NAGGING:
MARKETING TO KIDS


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
Advertising directly to kids in the United
States is a $15 billion business
Kids under 13 influence about $600 billion in
family spending each year
Media-savvy kids often don’t notice the
pitches
A scary result: 53% of kids say buying
certain products makes them feel better
about themselves
THE MARKETING MIX
THE GLOBAL MARKETING MIX


Do you need to change your
marketing mix for every
country?
Most consumer products
require a new marketing mix
for each global market.
GRASS ROOTS MARKETING IS A
BUNCH OF BULL...RED BULL

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
Red Bull launched in Europe in 1987
They gave away cases of the product to student
advocates and encouraged them to throw a PARTY!
They stayed connected with their young target
market, becoming popular in bars

Red Bull launched in the US in 1997

They still employ Word-of-Mouth strategies
CUSTOMER BEHAVIOR: DECISIONS,
DECISIONS, DECISIONS
Consumer Behavior
How people act when they
are buying products.
CONSUMER DECISION MAKING
PROCESS
Need Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Postpurchase Behavior
INFLUENCE IN DECISION MAKING
Cultural: Values, attitudes, customs, social
class
Social: Family, friends & reference
groups
Personal: Demographics, personality
Psychological: Motivation, attitudes, perceptions,
learning
BUSINESS BUYER BEHAVIOR

Rationale Criteria

Specific Purchase Criteria

Objective Standards

Input from Multiple Internal Sources

Formal Process

Frequently Seek Customized Goods
MARKETING RESEARCH: SO WHAT DO
THEY REALLY THINK?


Monitor and predict customer
behavior
Evaluate and improve marketing
mix

Better marketing decisions

More value for consumers

More profits for business
Conducting Market Research
1.
2.
3.
4.
5.
6.
7.
8.
Define the problem
Access available information
Gather additional information
Review internal records; interview employees
Collect outside data
Organize and interpret data
Make a decision and take action
Assess the results of the action
Define the Problem

List the possible causes
 Eliminate

any that can not be measured
Beware of symptoms

Your company has missed its revenue targets
 Symptom – sales declined
 Possible causes:
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
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Have your customers changed?
Have their tastes changed?
Have their buying habits changed?
Have you changed your product?
Are there new competitors?
Gathering Information


Assess what you already have available
If you need more…
 Stay
as close to home as possible
 Sales
records
 Complaints
 Receipts
 Credit records
 Ask
your employees
MARKETING RESEARCH DATA
Secondary Data: Existing Primary Data: New Data
Data
that is Compiled
Lower Cost
More Expensive
May not be Specific
Customized
Frequently Outdated
Fresh, New
Available to Competitors
Proprietary
 Already published material
 Trade associations
 Direct mail
 Questionnaires
 Telephone or street surveys
 Panel studies
 Test marketing
Organizing and Interpreting Data

Prioritize the data with the most important on top
 What
strategies are suggested?
 How can they be accomplished?
 How are they different from what I’m doing?
 What current activities should be increased?
 What current activities should be decreased or
dropped?
Making Decisions and Taking Action

Prioritize each possible strategy from the standpoint
of:
 Immediate
goal to be achieved
 Cost to implement
 Time to accomplish
 Measurements

Select those with the greatest impact
 Develop
tactics to implement
Assess the Results

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
Analyze your progress measures
Adjust if necessary
At the conclusion..
 Did
you achieve your goal ?
 Should the decision be renewed or expanded ?
COLOR ME HUNGRY?
Surrounding customers with red, yellow, and orange encourages
them to eat a lot quickly and leave.
• Marketing researchers found that American
consumers associate red with energy, passion,
speed, and hunger.
• Yellow suggests happiness and warmth;
orange suggests playfulness, fun,
affordability.
A MAJOR MARKETING SHIFT: SOCIAL
RESPONSIBILITY

Marketers have responded to social demands:
Setting higher standards for environmentalism
 Abolishment of sweatshops
 Involvement in the community


Many companies have begun to employ green
marketing
GO GREEN
 Target consumers who buy based on their convictions

A MAJOR MARKETING SHIFT: TECHNOLOGY

Technology has revolutionized marketing
 Power
has shifted from producers to consumers
 Customers
have 24/7 access to information
 Marketers
have an abundance of promotional
opportunities

Companies can mass customize products for customers
Sales Forecast

Assess how the total market will perform


Assess your performance and market share


What is the overall economic climate ?
Will customers make decisions on the same basis they have
in the past ?
How will your competitors perform
Will there be new competitors ?
 Will they introduce new products ?
 Will some competitors leave the market ?

Foundation Simulation
Customers
Product Questions:
 What do the customers want?
 What are the characteristics of the product that are
important to customers?
 What is the most important product characteristic
• In the low tech segment?
• In the high tech segment?
 What is “perceived age” of a product?
 How is reliability measured?
 What will increase material costs?
Pricing Questions:
 What do the customers want?
 What is the price range for low tech products?
 What is the high tech price range?
 If Demand is greater than Supply, what is the impact on
sensor prices?
 If Supply is greater than Demand, what is the impact
on sensor prices?
Promotional mix
 You will invest money in a “promotion” budget and
create “awareness”.


It relates to your advertising efforts.
The awareness you create is specific to a single product.
 You will invest money in a “sales” budget and create
“access” to your products.


Accessibility applies to the segment, not the product
Sales Budget is spent on distribution, order entry, customer
service, etc.