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Chapter 11: MARKETING. Building Profitable Connections with Your Customers. MARKETING IS MORE THAN ADVERTISING. - PowerPoint PPT Presentation
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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
The ability of goods and services to
satisfy wants.
FormUtility
TimeUtility
PlaceUtility
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
Limited Relationships
FullPartnerships
Customer Relationship Customer Relationship Management (CRM)Management (CRM)
Value
Customer Satisfaction
Customer Loyalty
MARKETING STRATEGYWHERE 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
How will the buyer use the
product?
Consumer Markets
Business Markets
Products for personal
consumption.
Products used directly or
indirectly to produce other
products.
Different approaches to select target markets.
ANALYZING PROMOTIONAL STRATEGIES
MARKET SEGMENTATION
Marketers may select multiple segments to target.
Selecting a target market begins with
dividing your market into segments.
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
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
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
Postpurchase Behavior
Evaluation of Alternatives
Purchase Decision
INFLUENCE IN DECISION MAKING
Cultural: Values, attitudes, customs, social class
Social: Family, friends & reference groups
Personal: Demographics, personalityPsychological: 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 Research1. Define the problem2. Access available information3. Gather additional information4. Review internal records; interview
employees5. Collect outside data6. Organize and interpret data7. Make a decision and take action8. 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:
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 Data
Primary Data: New Data that is Compiled
Lower Cost More ExpensiveMay not be Specific CustomizedFrequently Outdated Fresh, NewAvailable 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 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?
•Marketing researchers found that American consumers associate red with energy, passion, speed, and hunger.
•Yellow suggests happiness and warmth; orange suggests playfulness, fun, affordability.
Surrounding customers with red, yellow, and orange encourages them to eat a lot quickly and leave.
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
What is the overall economic climate ? Assess your performance and market share
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.