Transcript chapter 4 - Ferris Marketing

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CHAPTER
4
THE BASICS
OF MARKETING
4-1 Changes in Today’s Marketing
4-2 Planning a Marketing Strategy
4-3 Deciphering Consumers and
Competitors
4-4 The Varied Role of Marketing
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©VISA
Focus Questions:
 What do you think is meant
by the ad’s headline?
 What role does Visa play in
helping businesses market
products and services to
customers?
 How do credit and financial
services such as the ones
described in this ad make it
easier for businesses to
participate in international
commerce?
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CHANGES IN
TODAY’S MARKETING
4-1
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Marketing Has Changed
Marketing Experiences
 Many people can only think of the bad
experiences they have
 The times a sale item was not available or a
product did not work as advertised
 Marketing is more than advertising
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Marketing Has Changed
Understanding the Differences
 From few to many
 Use to be marketing was getting people to buy
what was produced
 Now marketing involves everything from product
development to offer credit to customers
 From independence to integration
 Marketing used to be alone
 Now it is integrated—it is an essential part of all
business
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Marketing Has Changed
 Understanding the Differences cont…
 From problems to opportunities
 Marketing used to come in when there was a problem
 Too many products that have to be sold or competitors taking
customers away
 Marketing now is involved from the beginning by creating
market opportunities—finding new markets to sell
products and to improve what is offered to the existing
markets.
 From expense to investment
 When times were tough marketing used to be one of the
first areas cut, now businesses know that money invested
in marketing can help the whole business improve.
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What Does Marketing Marketing
Mean to a Business?
Focus on customer needs
 The business were not successful because:
 They were concerned only with the product and
service
 They believed they knew what the customer
wanted
 They did not study the market
 They failed to use a variety of marketing tools
available to them
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PLANNING A
MARKETING STRATEGY
4-2
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Putting Marketing Up Front
 Planning that identifies how a company expects to
achieve its goals is known as a strategy.
 Without a marketing concept a business first
develops/creates a product and then decides how it will be
marketed to customers
 Little to no consideration will be given to the needs of the
customers
 With a marketing concept the company believes it will
be most successful if it recognizes the needs of
customers and understands that these needs will
change over time.
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How does the Marketing Concept
Affect Planning?
Without the Marketing
Concept
With the Marketing Concept
1. Develop a Product
1. Conduct research to identify
potential customers and their
needs
2. Decide on marketing activities 2. Develop a marketing mix
(product, distribution, price,
promotion) that meets the
specific customer needs
3. Identify potential customers
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Understanding the Customer
 Identifying customer needs
 Meeting customer needs is not easy
1.
2.
3.
Customers are unsure of their needs
Customers have limited amounts of money to spend
The needs of individuals and groups of consumers can be quite
different
 Even people within the same household can have different feelings
 Businesses deal with customer needs in two ways
 They believe they know the needs better than customers and
just need to create the product and market it will to convince
people to buy it
 They study the needs of people and develop products based on
this information
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Understanding the Customer
 Satisfying customer needs
 Business that are concerned with customer needs
support the marketing concept
 They identify group with unmet needs
 Categorizes consumers according to similar characteristics,
needs and purchasing behavior
 Market Segments—groups of similar consumers within a larger
market
 Market Opportunity Analysis studies and prioritizes
market segments to locate the best potential based on
demand and competition
 A target market is a clearly defined segment of a
market to which a business wants to appeal
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Planning the Offering
 The marketing mix is the blend of the four
marketing elements—product, distribution,
price and promotion
 Creating the right mix
 Developing products
 Making distribution decisions (how to get it to
consumers)
 Pricing products and services
 Planning promotion
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Combining Parts of
the Marketing Mix
Product that offers choices
Distribution that provides
convenience
Price that gives value
Promotion that aids
decision-making
Satisfied customers
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Virtual Marketing-Page 102
Read and complete
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UNDERSTANDING
CONSUMERS AND COMPETITORS
4-3
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Making Decisions Activity
What steps do you use to make a
decision when you are going to buy a
product or service?
Brainstorm and make a list of the things
you do
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Consumer Decision Making
 The stages of a decision
1.
2.
3.
4.
5.
Recognize
Identify
Evaluate
Decide
Assess
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Consumer Decision-Making Stages
Consumers make a series of decisions
when deciding on a purchase.
 Recognize a need
 Identify alternatives
 Evaluate choices
 Make a decision
 Assess satisfaction
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Consumer Decision-Making Stages
Stage 1: Recognize a need
 This could be a fast process or could take a
long time
 Ex: You realize you are hungry when you are
out shopping
 Ex: You will need to move into an apartment
when you graduate
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Consumer Decision-Making Stages
Stage 2: Identify the alternatives
 Sometimes there are a lot of choices and
sometimes they are limited
 Ex1: You realize you are hungry when you are
out shopping, so you look at the choices at the
mall
 Ex2: You will need to move into an apartment
when you graduate, there are only 5 complex in
the city you are moving to,
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Consumer Decision-Making Stages
 Stage 3: Evaluate the Choices
 Decide if one choice is more available than others, is more
affordable or is “better” in some way.
 Ex1: You realize you are hungry when you are out shopping, so
you look at the choices at the mall, you could go to the food
court (cheap) or a sit down place (more expensive)
 Ex2: You will need to move into an apartment when you
graduate, there are only 5 complex in the city you are moving to,
one place has a gym in the complex, another has a pool
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Consumer Decision-Making Stages
 Stage 4: Decide
 Once the consumer is comfortable the decision is made and
choice is selected
 Ex1: You realize you are hungry when you are out shopping, so
you look at the choices at the mall, you could go to the food
court (cheap) or a sit down place (more expensive), you go with
the fast food choice
 Ex2: You will need to move into an apartment when you
graduate, there are only 5 complex in the city you are moving to,
one place has a gym in the complex, another has a pool. You
choose the apartment that is more expensive but has a gym on
site
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Consumer Decision-Making Stages
 Stage 5: Assess Satisfaction
 The final step is to assess and determine if the decision was
a good choice or not. If it was a good decision, the purchase
maybe repeated again later. If it was a bad decision there is
a good chance it will not be repeated
 Ex1: You realize you are hungry when you are out shopping, so
you look at the choices at the mall, you could go to the food
court (cheap) or a sit down place (more expensive), you go with
the fast food choice but the food was cold and nasty. BAD
Choice
 Ex2: You will need to move into an apartment when you
graduate, there are only 5 complex in the city you are moving to,
one place has a gym in the complex, another has a pool. You
choose the apartment that is more expensive but has a gym on
site and the apartment was perfect. Good Choice
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Responding to Competition
 Intense competition—business compete with others
offering very similar products
 Ex. Paper Towel
 Usually companies rely on price and promotion to get
customers to buy their products since there are few if any
differences between companies
 Limited competition—little or no direct competition
 Ex. Theme Parks (there are not many around)
 Monopolistic competition—there are many
competitors but customers can see the differences
 Ex. Cars
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Digital Digest—Page 108
How does good inventory management
affect consumer satisfaction?
How can detailed sales data help gauge
the effectiveness of a sales promotion?
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THE VARIED
ROLE MARKETING
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The Varied Uses of Marketing
 Producers and manufacturers usually focus the most on the
product element of the marketing mix.
 Even if they do not sell directly to customers they need to know
what people want to buy
 Channel members focus on the distribution process and pricing
processes of the marketing mix
 Wholesalers get the products to retailers and the retailers price
them to sell to customers.
 Service businesses have unique marketing challenges. Since
they work directly with their customers they have to handle all
elements of the marketing mix
 Services usually have more control over pricing than other
businesses because there are less material costs.
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Non-Business Organizations
 Primary focus is on something other than
providing products and service for a profit
 Examples
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
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Government agencies
Churches
Schools
Museums
Professional organizations
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Marketing By
Non-Business Organizations
 Government agencies
 Services are usually paid for by taxes so citizens do not have a
choice (fire, police, garbage, snow removal, etc.)
 Governments are trying to keep citizens more informed though
websites to increase customer service
 If people are happy more people will move in to the city and there
are more taxes collected
 Nonprofit organizations
 These business do not operate for profit BUT they need to provide a
product and service people need so the marketing mix is very
important
 Example: The Red Cross helping is disaster areas
 Supporting non-business organizations—They often look
for help from businesses who understand marketing
Chapter 4
MARKETING
© 2009 South-Western, Cengage Learning