Marketing: Helping Buyers Buy

CRICKET LEE Fitlogic Developed a system of clothes sizing called Fitlogic. Lee s system standardizes sizes and provides flexibility. Though she has an excellent idea, Lee must market her product. Profile 13-2

WHAT S MARKETING? What is Marketing? Marketing -- The activity, set of institutions and processes for creating, communicating, delivering, and exchanging offerings with value for customers, clients, partners, and society at large. LG1 13-3

FOCUS of CONTEMPORARY MARKETING What is Marketing? LG1 Marketing today involves helping the buyer buy through: - Websites that help buyers find the best price, identify product features, and question sellers. - Blogs and social networking sites that cultivate consumer relationships. 13-4

FIND A NEED AND FILL IT Spotlight on Small Business Lance Fried was an electrical engineer who went into business after he built a waterproof MP3 player. Focused his marketing plan on small surf shops instead of large stores. Now, Fried attends trade shows and runs a website to help sell more products. 13-5

FOUR ERAS of U.S. MARKETING Production Era Selling Era Marketing Concept Era Customer Relationship Era The Evolution of Marketing LG1 13-6

The PRODUCTION and SELLING ERAS The Evolution of Marketing LG1 The general philosophy was Produce what you can because the market is limitless. After mass production, the focus turned from production to persuasion. 13-7

The MARKETING CONCEPT ERA After WWII, a consumer spending boom developed. The Evolution of Marketing Businesses knew they needed to be responsive to consumers if they wanted their business. LG1 13-8

APPLYING the MARKETING CONCEPT The Evolution of Marketing LG1 The Marketing Concept includes three parts: 1. Customer Orientation -- Finding out what customers want and then providing it. 2. Service Orientation -- Making sure everyone in an organization is committed to customer satisfaction. 3. Profit Orientation -- Focusing on the goods and services that will earn the most profit. 13-9

The CUSTOMER RELATIONSHIP ERA The Evolution of Marketing LG1 Customer Relationship Management (CRM) -- Learning as much as you can about customers and doing what you can to satisfy or exceed their expectations. Organizations seek to enhance customer satisfaction building long-term relationships. Today firms like Priceline and Travelocity use CRM that allow customers to build a relationship with the suppliers. 13-10

NONPROFIT MARKETING Nonprofit marketing tactics include: Nonprofit Organizations and Marketing LG1 - Fundraising - Public Relations - Special Campaigns - Ecological practices - Changing public opinions and attitudes - Increasing organizational membership 13-11

MARKETING STRATEGIES for NONPROFITS Nonprofit Organizations and Marketing LG1 Nonprofit marketing strategies include: - Determine the firm s goals and objectives. - Focus on long-term marketing. - Find a competent board of directors. - Exercise strategic planning. - Train and develop long-term volunteers. - Carefully segment the target market. 13-12

DEVELOPING a PRODUCT Product -- A good, service, or idea that satisfies a consumer s want or need. Designing a Product to Meet Consumer Needs LG2 Test Marketing -- Testing product concepts among potential product users. Brand Name -- A word, letter, or a group of words or letters that differentiates one seller s goods from a competitor s. 13-13

PRICING and PLACING a PRODUCT Setting an Appropriate Price LG2 Pricing products depends on many factors: - Competitors prices - Production costs - Distribution - High or low price strategies Middlemen are important in place strategies because getting a product to consumers is critical. 13-14

PROMOTING the PRODUCT Developing an Effective Promotional Strategy Promotion -- All the techniques sellers use to inform people about their products and motivate them to purchase those products. Promotion includes: - Advertising - Personal selling - Public relations - Viral marketing - Sales promotions LG2 13-15

PROGRESS ASSESSMENT Progress Assessment What does it mean to help the buyer buy? What are the three parts of the marketing concept? What are the Four P s of the Marketing Mix? 13-16

SEARCHING for INFORMATION Providing Marketers with Information Marketing Research -- Analyzing markets to determine challenges and opportunities, and finding the information needed to make good decisions. Research is used to identify products consumers have used in the past and what they want in the future. Research uncovers market trends and attitudes held by company insiders and stakeholders. LG3 13-17

FOUR STEPS in the MARKETING RESEARCH PROCESS 1. Defining the problem or opportunity and determining the present situation. 2. Collecting research data. 3. Analyzing the data. The Marketing Research Process LG3 4. Choosing the best solution and implementing it. 13-18

DEFINING the PROBLEM or OPPORTUNITY Defining the Question and Determining the Present Situation LG3 What s the present situation? What are the alternatives? What information is needed? How should the information be gathered? 13-19

COLLECTING SECONDARY RESEARCH DATA Collecting Data LG3 Secondary Data -- Existing data that has previously been collected by sources like the government. Secondary data incurs no expense and is usually easily accessible. Secondary data doesn t always provide all the needed information for marketers. 13-20

COLLECTING PRIMARY RESEARCH DATA Collecting Data LG3 Primary Data -- In-depth information gathered by marketers from their own research. Telephone, online and mail surveys, personal interviews, and focus groups are ways to collect primary data. 13-21

FOCUS GROUPS Collecting Data LG3 Focus Group -- A group of people who meet under the direction of a discussion leader to communicate opinions. 13-22

ANALYZING the DATA and IMPLEMENTING the DECISION Analyzing the Research Data LG3 Marketers must turn data into useful information. Must use their analysis to plan strategies and make recommendations. Finally, marketers must evaluate their actions and determine if further research is needed. 13-23

KEY BENEFITS of MARKETING RESEARCH Analyze customer needs and satisfaction. Analyze current markets and opportunities. Analyze the effectiveness of marketing strategies. Analyze marketing process and tactics currently used. Analyze the reasons for goal achievement or failure. Analyzing the Research Data LG3 13-24

WAYS to FIND OUT WHAT CONSUMERS THINK Analyzing the Research Data LG3 Conduct informal consumer surveys. Host a customer focus group. Listen to competitor s customers. Survey your sales force. Become a phantom customer. 13-25

SCANNING the MARKETING ENVIRONMENT Environmental Scanning -- The process of identifying factors that affect marketing success. Factors involved in the environmental scan include: - Global factors - Technological factors - Sociocultural factors - Competitive factors - Economic factors The Marketing Environment LG4 13-26

The Marketing The MARKETING ENVIRONMENT Environment LG4 13-27

SOCIAL MARKETING GOES GLOBAL (Reaching Beyond Our Borders) Debra Wexler and Brian Gavin founded Whiteflash, an online diamond dealer. About 10,000 worldwide users visit their site each month. Wexler started a social marketing campaign and is planning an interactive website to help customers buy. 13-28

The ABC s of MARKETING Always be customer-focused. The Marketing Environment LG4 Benchmark against the best firms. Continuously improve performance. Develop the best value package. Empower your employees. Focus on relationship building. Goal achievement is the reward. 13-29

The CONSUMER and B2B MARKET Two Different Markets: Consumer and B2B LG4 Consumer Market -- All the individuals or households that want goods and services for personal use and have the resources to buy them. Business-to-Business (B2B) -- Individuals and organizations that buy goods and services to use in production or to sell, rent, or supply to others. 13-30

PROGRESS ASSESSMENT Progress Assessment What are the four steps in the marketing research process? What s environmental scanning? What factors are included in environmental scanning? 13-31

MARKETING to CONSUMERS The size and diversity of the consumer market forces marketers to decide which groups they want to serve. The Consumer Market Market Segmentation -- Divides the total market into groups with similar characteristics. Target Marketing -- Selecting which segments an organization can serve profitably. LG5 13-32

SEGMENTING the CONSUMER MARKET Segmenting the Consumer Market LG5 Geographic Segmentation -- Dividing the market by cities, counties, states, or regions. Demographic Segmentation -- Dividing the market by age, income, education, and other demographic variables. Psychographic Segmentation -- Dividing the market by group values, interests, and opinions. (continued) 13-33

SEGMENTING the CONSUMER MARKET (continued) Segmenting the Consumer Market LG5 Benefit Segmentation -- Dividing the market according to product benefits the customer prefers. Volume (Usage) Segmentation -- Dividing the market by the volume of product use. 13-34

MARKETING to SMALL SEGMENTS Reaching Smaller Market Segments LG5 Niche Marketing -- Identifies small but profitable market segments and designs or finds products for them. One-to-One Marketing-- Developing a unique mix of goods and services for each individual consumer. 13-35

MASS MARKETING vs. RELATIONSHIP MARKETING Moving Toward Relationship Marketing LG5 Mass Marketing -- Developing products and promotions to please large groups of people. Relationship Marketing-- Rejects the idea of mass production and focuses toward custom-made goods and services for customers. 13-36

KEYS to SUCCESSFUL RELATIONSHIP MARKETING Effective relationship marketing is built on: Open communication Consistently reliable service Staying in contact with customers Trust, honesty, and ethical behavior Showing that you truly care Moving Toward Relationship Marketing LG5 13-37

STEPS in the CONSUMER DECISION-MAKING PROCESS The Consumer Decision-Making Process LG5 1. Problem recognition 2. Search for information 3. Evaluating alternatives 4. Purchase decision 5. Postpurchase evaluation 13-38

The CONSUMER DECSION MAKING PROCESS AND OUTSIDE INFLUENCES The Consumer Decision-Making Process LG5 13-39

KEY FACTORS in CONSUMER DECISION-MAKING The Businessto-Business Market LG6 Learning Reference Groups Culture Subcultures Cognitive Dissonance 13-40

BUSINESS-to-BUSINESS MARKET (B2B) The Businessto-Business Market LG6 B2B marketers include: - Manufacturers - Wholesalers and retailers - Hospitals, schools and charities - Government Products are often sold and resold several times before reaching final consumers. 13-41

B2B MARKET DIFFERENCES There are relatively few customers. Customers tend to be large buyers. Markets are geographically concentrated. Buyers are more rational than emotional. Sales are direct. Promotions focus heavily on personal selling. The Businessto-Business Market LG6 13-42

PROGRESS ASSESSMENT Progress Assessment Define the terms consumer market and businessto-business market. Name and describe five ways to segment the consumer market. What s niche marketing and how does it differ from one-to-one marketing? What are four key factors that make B2B markets different from consumer markets? 13-43