Chapter 13Marketing: Helping Buyers Buy M. GolamRabbani
WHAT’S 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.
FOCUS of CONTEMPORARY MARKETING • 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.
FIND A NEED AND FILL ITSpotlight 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.
FOUR ERAS of U.S. MARKETING • Production Era • Selling Era • Marketing Concept Era • Customer Relationship Era
The PRODUCTION and SELLING ERAS • Production era -- The general philosophy was “Produce what you can because the market is limitless.” • Selling era -- After mass production, the focus turned from production to persuasion.
The MARKETING CONCEPT ERA • After WWII, a consumer spending boom developed. • Businesses knew they needed to be responsive to consumers if they wanted their business.
APPLYING the MARKETING CONCEPT • The Marketing Concept includes three parts: • Customer Orientation -- Finding out what customers want and then providing it. • Service Orientation -- Making sure everyone in an organization is committed to customer satisfaction. • Profit Orientation -- Focusing on the goods and services that will earn the most profit.
The CUSTOMER RELATIONSHIP ERA • 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.
THE MARKETING MIX • We can divide much of what marketing people do into four factors called the 4P’s. • Four P • Product • Price • Placement • Promotion
DEVELOPING a PRODUCT • Product -- A good, service, or idea that satisfies a consumer’s want or need. • 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.
PRICING and PLACING a PRODUCT • 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.
PROMOTING the PRODUCT • 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
SEARCHING for 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.
FOUR STEPS in the MARKETING RESEARCH PROCESS • Defining the problem or opportunity and determining the present situation. • Collecting research data. • Analyzing the data. • Choosing the best solution and implementing it.
COLLECTING SECONDARY RESEARCH DATA • 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.
COLLECTING PRIMARY RESEARCH DATA • 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.
FOCUS GROUPS • Focus Group -- A group of people who meet under the direction of a discussion leader to communicate opinions.
ANALYZING the DATA and IMPLEMENTING the DECISION • 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.
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.
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 CONSUMER and B2B MARKET • 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.
MARKETING to CONSUMERS • The size and diversity of the consumer market forces marketers to decide which groups they want to serve. • Market Segmentation -- Divides the total market into groups with similar characteristics. • Target Marketing -- Selecting which segments an organization can serve profitably.
SEGMENTING the CONSUMER MARKET • 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)
SEGMENTING the CONSUMER MARKET(continued) • Benefit Segmentation -- Dividing the market according to product benefits the customer prefers. • Volume (Usage) Segmentation -- Dividing the market by the volume of product use.
MARKETING to SMALL SEGMENTS • 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.
MASS MARKETING vs. RELATIONSHIP MARKETING • 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.
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
STEPS in the CONSUMER DECISION-MAKING PROCESS • Problem recognition • Search for information • Evaluating alternatives • Purchase decision • Postpurchase evaluation
KEY FACTORS in CONSUMER DECISION-MAKING • Learning: gathering information • Reference Groups: Group used as a reference • Culture: Values, attitudes associated with a society. • Subcultures: values, attitudes associated with a race, or ethnic group • Cognitive Dissonance: Psychological conflicts or doubts about whether the best product was purchased at the best price