Busn 101 Chapter 13

1. Busn 101 Chapter 13 Marketing: Building Customer Relationships

2. Goals • Marketing • Marketing history • Marketing concept • Four Ps of marketing (Product, Price, Place, Promotion) • Marketing research process • Learn about the changing marketing environment with environmental scanning • Meet the needs of customers with: • Market segmentation • Relationship marketing • Study of consumer behavior • How is the business-to-business market different from the consumer market?

3. Marketing (P 350 Text) • The process of planning and executing the conception, pricing, promotion, and distribution of goods and services to facilitate exchanges that satisfy individual and organizational objectives • Watching people to see what their needs are and getting a new idea to satisfy those needs, developing, testing, pricing, promoting, distributing the product or service. Then listening to people after they have the product or service and starting all over

4. Marketing History

5. Production • Produce as much as you can because there was a limitless market • Limited production capacity and vast demand • Greatest marketing need was: distribution and storage.

6. Sales • Production capacity began to exceed demand • Mass production for fist time • Marketing began to emphasize selling and advertising • Most business did not offer service after the sale.

7. Marketing Concept • Customer demand and competition amongst businesses increase dramatically and the emphasis switched to the Marketing Concept: • A customer orientation (customer's needs) • Service orientation (Total organizational effort to meet customer's needs) • A profit orientation (focus of goods and services that are most profitable)

8. Customer Relationship • Learn as much as possible about customers so you can meet and exceed customer's expectations • Goal: build long-term loyalty

9. Marketing Is Done By All Entities And In Many Ways • Businesses • Politicians • Knocking on doors to get your vote • Videos on YouTube • Art museums, http://seattlepi.nwsource.com/visualart/384477_sabadeb23.html?source=mypi • Business, http://flightline.highline.edu/mgirvin/Personal/NTTimes.htm • Churches, http://findarticles.com/p/articles/mi_pwwi/is_200809/ai_n28120444 • Temples • New years celebrations

10. Marketing Terms • Marketing concept • Three part business philosophy: • A customer orientation • Service orientation • A profit orientation • Customer relationship management (CRM) • The process of learning as much as possible about customers and doing everything you can to satisfy them – or even exceed their expectations – with goods and services over time

11. Marketing Mix (Four Ps) • Product • Design want-satisfying product • Price • Set price that is not too high or too low • Place • Place product where people will buy it • Promotion • Ad or article in magazine • Coupon • Placement in movie • Word of mouth • Personal selling • YouTube video

12. Marketing Terms • Product • Any physical good, service, or idea that satisfies a want or need plus anything that would enhance the product in the eyes of the consumer, such as brand • Test marketing • The process of testing products among potential users • Brand name • A word, letter, or group of words or letters that differentiates one seller’s goods and service from those of competitors • Promotion • All the techniques sellers use to motivate people to buy their products or services

13. Marketing Process

14. Marketing Research • Marketing research • The analysis of markets to determine opportunities and challenges, and to find the information needed to make good decisions • What have customers purchased in the past, and what situational changes have occurred to alter the sale now and in the future? • What are business or global trends? • What do employees and other stakeholders think? • Secondary data • Information that has already been complied by others and published in journals and books or made available online. • Primary data • Data that you gather yourself

15. Marketing Terms • Focus group • A small group of people who meet under the direction of a discussion leader to communicate their opinions about an organization, its products, or other given issues

16. Marketing Research Process • Define the question (problem or opportunity) and determine the present situation • Marketing researchers should be given the freedom to go in any direction they need to in order to find the question/problem/opportunity • Collect data • Secondary (apply it uniquely), primary (find the unique data) • Analyze data to create information • Compile primary and secondary data into useful information that helps to make business decision • Choose the best solution and implementing it • Choose solution, see if solution works, start over

17. Marketing Terms • Environmental scanning • The process of identifying the factors that can affect marketing success • Environmental trends in marketing: • Growth Internet • Consumer databases (provide products to more closely match the needs of consumers) • Social trends • Competition • Economic environment

18. Marketing Environment

19. Flat World For Marketers • The world is now integrated economically • Thanks to technologies such as: • Internet • Efficient global distribution channels • Learning new cultures, finding opportunities through market research: • China McDonalds: • Since many Chinese restaurants were not clean and did not let you stay as long as you want, McDonalds provided clean restaurants that allowed you to stay as long as you wanted • Starbucks Paris: • Since 50 million tourists visited the city that has 7 million residents, they opened coffee bars in tourists areas

20. Two Different Markets (Who Is End User?) • Markets • People with unsatisfied needs and wants that have both the resources and willingness to buy • Consumer market • All the individuals or households that want goods and services for personal consumption or use • Buy candy bar to eat or tax return service • Business-to-business (B2B) markets • All the individuals and organizations that want goods and services to use in producing other goods and services or to sell, rent, or supply goods to others • Selling candy bar machines, or audit services

21. Market Segmentation • Market Segmentation • The process of dividing the total market into groups whose members have similar characteristics • Target marketing • Marketing directed toward those groups (market segments) an organization decides it can serve profitably • Finding the right target market for your business: • The one that is the most profitable • The one that meets other criteria

22. Target Marketing Geographic Demographic Psychographic Benefit Volume Market Segmentation • Use all variables and come up with consumer profile (target market) that is sizable, reachable and profitable

23. Market Segmentation • Geographic segmentation • Dividing the market by geographic area • Demographic segmentation • Dividing the market by age, income, education level… • Psychographic segmentation • Dividing the market using the group’s personality, values, attitudes, and interests (Extroverted, upscale, moderate) • Benefit segmentation • Dividing the market by determining which benefits of the product to talk about (Comfort, Convenience, Durability, Economic, Healthy) • Volume, or usage, segmentation • Dividing the market by usage (volume of use)

24. Small Markets • Niche marketing • The process of fining small but profitable market segments and designing of finding products for them • Boomerang manufacturer • One-to-one marketing • Developing a unique mix of goods and services for each individual customer • Dell • Travel agent

25. Opposites • Mass marketing • Developing products and promotions to please large groups of people • Relationship marketing • Marketing strategy with the goal of keeping individual customers over time by offering them products that exactly meet their requirements • Small businesses have always had to do this • Large business now do this and call it CRM (Customer Relationship Management) • Technology like Databases, the internet and ERM systems help business to collect data about customers and connect with them later

26. Consumer Decision Making • Sociocultural • Reference groups • Family • Social class • Culture • Subculture • Marketing mix • Product • Price • Place • Promotion • Decision-Making Process • Problem Recognition • Information Search • Alternative evaluation • Purchase decision • Postpurchase evaluation • (cognitive dissonance) • Psychological • Perception • Attitudes • Learning • Motivation • Situational • Type of Purchase • Social surroundings • Physical surroundings • Previous experience

27. Influences On Consumer Behavior • Learning • Previous experiences • Reference Groups • People you talk to freely • Culture • Values, attitudes that are passed to you from earlier generations in your society • Subculture • Small part of larger culture • Cognitive dissonance • Uncomfortable feeling caused by holding two contradictory ideas simultaneously (after purchase) • http://en.wikipedia.org/wiki/Cognitive_dissonance

28. Fewer B2B customers than total consumers B2B Markets are larger than Consumer Markets B2B markets tend to be geographic concentration (Silicon valley) B2B buyers are thought to be more rational B2B sales tend to be direct sales Personal Selling, more than advertising Business-to-business (B2B)

29. Marketing • Watching people to see what their needs are and getting the new idea to satisfy those needs, developing, testing, pricing, promoting, distributing the product or service. Then listening to people after they have the product or service and starting all over

30. Marketing History

31. Marketing Concept • A customer orientation • Customer's needs • Service orientation • Total organizational effort to meet customer's needs • A profit orientation • Focus of goods and services that are most profitable

32. Four Ps Of Marketing Place Product Computer 'R Us Marketing Program Buy at Computers ‘R Us Promotion Price

33. Marketing Research Process • Define the question (problem or opportunity) and determine the present situation • Collect data • Analyze data to create information • Choose the best solution and implementing it

34. Learn About The Changing Marketing Environment With Environmental Scanning

35. Meet The Needs Of Customers With: • Market segmentation • The process of dividing the total market into groups whose members have similar characteristics • Relationship marketing • Marketing strategy with the goal of keeping individual customers over time by offering them products that exactly meet their requirements • Study of consumer behavior • Learning • Reference Groups • Culture/Subculture • Cognitive dissonance

36. Study of consumer behavior • Sociocultural • Reference groups • Family • Social class • Culture • Subculture • Marketing mix • Product • Price • Place • Promotion • Decision-Making Process • Problem Recognition • Information Search • Alternative evaluation • Purchase decision • Postpurchase evaluation • (cognitive dissonance) • Psychological • Perception • Attitudes • Learning • Motivation • Situational • Type of Purchase • Social surroundings • Physical surroundings • Previous experience

37. Mass V. Relationship Marketing • Mass Marketing: • Making things to please a large group of people • Relationship Market: • Away from Mass marketing and toward custom-made goods and services

38. How Is The Business-to-business Market Different From The Consumer Market? • B2B = Business sell to business • Number of B2B is small, but size of business is large • Geographically concentrated • More rational buying • Sales are direct and done by persons instead of advertising