SESSION 12
Marketing:
Helping
Buyers Buy
McGraw-Hill/Irwin Copyright © 2015 by the McGraw-Hill Companies, Inc. All rights reserved.
WHAT’S MARKETING? LO 13-1
According to the American Marketing Association…
Marketing – the activity, set of institutions,
and processes for creating, communicating,
delivering, and exchanging offerings that
have value for customers, clients, partners,
and society at large
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MARKETING?: A Better Definition LO 13-1
Process of planning and executing the conception, pricing, promotion and distribution of
ideas, goods and services to facilitate exchanges that satisfy customer needs and
organization objectives
Product Pricing Promotion Place
Ideas Services Goods
2 Important Functions
Facilitate Exchanges Satisfy Customer
(Encourage Purchase) Needs
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LO 13-1
MARKETING FUNDAMENTALS
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LO 13-1
FOUR ERAS of U.S. MARKETING
• Production Era
• Selling Era
• Marketing Concept Era
• Customer Relationship
Era
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The PRODUCTION and LO 13-1
SELLING ERAS
• The general philosophy
was “Produce what you
can because the market
is limitless.”
• After mass production,
the focus turned from
production to persuasion.
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LO 13-1
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.
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APPLYING the LO 13-1
MARKETING CONCEPT
• The Marketing Concept is a business
philosophy that a firm should
continually try to offer products that
satisfy customers needs while also
making a business profit
• 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. 13-8
The CUSTOMER
LO 13-1
RELATIONSHIP ERA
CRM is the process of establishing mutually-beneficial long-term relationships with
individual customers to foster loyalty and repeat business
Good CRM incorporates
technologies and information
that allows businesses to
develop marketing strategies
to sustain long-term
customer relationships
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SERVICE with a SMILE LO 13-1
Six Steps for Keeping Your Customers Happy
• The cost of acquiring a new customer is 5x the
cost of retaining one. Here’s how to keep them:
1. Build trust
2. Emphasize the long term
3. Listen
4. Treat your customers like stars
5. Show appreciation
6. Remember employees are
customers too!
Source: Inc. Guidebook, Vol. 2 No. 5. 13-10
UNDERSTANDING TODAY’S LO 13-1
CUSTOMERS
Today’s Customers are:
•Sophisticated
•Demanding
•Price Sensitive
Why is Customer Satisfaction Important?
•Getting new customers costs more than
keeping them.
•Long-term customers boost profits.
•Satisfied customers tell their friends.
•Customers pay more for good service.
•Unhappy customers spread the word.
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The EMERGING LO 13-1
MOBILE MARKETING ERA
• As digital technology continues to grow,
consumer demands are expected to rise in:
1. Now: Consumers want to interact anywhere, anytime.
2. Can I?: They want to use information in new ways
that create value for them.
3. For me: Consumers expect personalized
experiences.
4. Simply: Consumers want all interactions to be easy.
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LO 13-1
NONPROFIT MARKETING
• Nonprofit marketing tactics include:
- Fundraising
- Public Relations
- Special Campaigns
- Ecological practices
- Changing public opinions and
attitudes
- Increasing organizational
membership
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The FOUR P’s of Marketing LO 13-2
(AKA THE MARKETING MIX)
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LO 13-2
THE MARKETING MIX
Product
Decisions about product’s design,
purpose, brand name, packaging,
and warranties
Price
Decisions based on price setting
(what to charge for product)
including rebates, and discounts
Promotion
Decisions that sellers use to
persuade and communicate to
people to buy their products /
services
Place (Distribution)
Decisions based on moving
products from producers to
consumers (marketing channels)
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LO 13-2
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.
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PRICING and LO 13-2
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.
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LO 13-2
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
- Word of mouth
Photo Courtesy of: Uri Baruchin
- Sales promotions
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MARKETING: HOW TO GET LO 13-3
INFORMATION
• Marketing Research -- Analyzing Marketing research involves
markets to determine challenges and
opportunities, and finding the gathering, interpreting, and
information needed to make good applying information to uncover
decisions. opportunities and challenges
• Research is used to identify products
consumers have used in the past and Identify external
what they want in the future. opportunities
• Research uncovers market trends and Monitor and predict
attitudes held by company insiders customer behavior
and stakeholders.
Evaluate and improve
marketing mix
FOUR STEPS IN MARKETING RESEARCH
PROCESS Why to find information?
1.Defining the problem or opportunity and determining 1.Secondary Data – Information that already
the present situation. exists, has already been collected
2.Collecting research data.
2.Primary Data – Information collected specific to
3.Analyzing the data. the problem
4.Choosing the best solution and implementing it.
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LO 13-4
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
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The MARKETING ENVIRONMENT
LO 13-4
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MARKETS AND THEIR LO 13-4
CLASSIFICATION
Market
A group of individuals or organizations, or both, that need products in a given category
and that have the ability, willingness, and authority to purchase such products
2 Main Types of Markets
1.Consumer markets
Purchasers and/or household members who intend to consume or benefit from the
purchased products and who do not buy products to make a profit
2. Business-to-business (B2B) (industrial) markets
Producer, reseller, governmental, and institutional customers that purchase specific
kinds of products for use in making other products for resale or for day-to-day operations
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MARKETING STRATEGY: LO 13-4
A formal plan that will enable an organization to make the best use of its resources
and advantages to meet its objectives
Consists of 2 Basic Steps:
1.Identify your Target
Market – the specific group
of potential customers on
which a firm directs its
marketing efforts
1.Create your Marketing Mix
– the combination of
controllable elements of a
marketing plan designed to
serve a target market,
including product, price,
distribution and promotion
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LO 13-5
MARKETING to CONSUMERS
Target market selection and evaluation
•Target market
–A group of individuals, organizations, or
both for which a firm develops and
maintains a marketing mix suitable for the
specific needs and preferences of that
group
•Market segment
–A group of individuals or organizations
within a market that share one or more
common characteristics
•Market segmentation
–The process of dividing a market into
segments and directing a marketing mix at
a particular segment or segments rather
than at the total market
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LO 13-5
A WELL CHOSEN TARGET MARKET
Size: There must be enough people in your target group to
support a business
Profitability: The people must be willing and able
spend more than the cost of producing and marketing the product
Accessibility: Your target must be reachable through
channels that your business can afford
Limited Competition: Look for markets with
limited competition; a crowded market is tough to crack
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SEGMENTING the LO 13-5
CONSUMER MARKET
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SEGMENTING the LO 13-5
CONSUMER MARKET
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SEGMENTING the LO 13-5
CONSUMER MARKET
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MARKETING to LO 13-5
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.
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MASS MARKETING vs. LO 13-5
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.
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STEPS in the CONSUMER LO 13-5
DECISION-MAKING PROCESS
1. Problem recognition
2. Search for information
3. Evaluating alternatives
4. Purchase decision
5. Postpurchase evaluation
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KEY FACTORS in CONSUMER LO 13-5
DECISION-MAKING
• Learning
• Reference Groups
• Culture
• Subcultures
• Cognitive
Dissonance
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TURNING NEGATIVES to POSITIVE
• Online product reviews have changed the
consumer decision-making process.
• But the reviews are not always valid because they
could be written about the experience instead of
the product.
• Amazon hopes to correct this issue and has
started a program in which the site’s most trusted
reviewers are sent products to write about.
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LO 13-5
TOP MARKETING CHALLENGES
• Marketing can be challenging in both the B2C and
B2B markets.
• Common issues are:
- Brand awareness
- Social media
- Converting leads into customers
- Budgeting
- Increasing profit
Source: Entrepreneur, www.entrepreneur.com, accessed November 2014. 13-34
BUSINESS-to-BUSINESS LO 13-6
MARKET (B2B)
• B2B marketers include:
- Manufacturers
- Wholesalers and retailers
- Hospitals, schools and charities
- Government
• Products are often sold and resold several times
before reaching final consumers.
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LO 13-6
B2B MARKET DIFFERENCES
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