Hit a Home Run with Customers 4.1 The Marketing Concept 4.2 Discover What People Want 4.3 Target Markets 4.4 Customer Service

Lesson 4.1 The Marketing Concept Goals Explain the central focus of the marketing concept. Explain the reasons for increased sports and entertainment options. Chapter 4 Slide 2

THE MARKETING CONCEPT Marketing is an important business function and you participate in the marketing process as a consumer of goods and services. About half of every consumer dollar spent pays for marketing costs. Marketing costs include product development, packaging, advertising, and sales expenses.

The Marketing Concept Satisfying customer needs is the most important aspect of marketing. Customers needs should be the primary focus during the planning, production, distribution, and promotion of a product or service. The marketing concept keeps the focus on the customer’s needs for a product or service. Chapter 4 Slide 4

Maintain Relationships Managing customer relationships involves listening to customers and carefully monitoring the latest consumer trends. Successful customer relationships are critical to the marketing concept. Customer satisfaction is the bottom line for maintaining successful marketing relationships. Sports and entertainment event planners are challenged to organize satisfying events that customers want and can afford. Chapter 4 Slide 5

Maintain Relationships Sports and entertainment event planners are challenged to organize satisfying events that customers want and can afford. When individuals purchase goods and services, they expect appropriate value for the money spent. Chapter 4 Slide 6

What is the most important aspect of marketing? Chapter 4 Slide 7

INCREASED SPORTS AND ENTERTAINMENT OPTIONS The increased standards of living in the U.S. has resulted in more discretionary income for consumers. Increased consumer demand for sports and entertainment events has resulted in higher prices and more completion. Competition in the marketplace results in more options for consumers and improved events and merchandise. Marketing strategies must include monitoring the competition and consumer trends and making improvements that meet the latest customer demands. Chapter 4 Slide 8

Customer Focus Productivity is the rate at which companies produce goods or services in relation to the amount of materials and number of employees utilized. Increased competition has forced business’s focus beyond productivity to establishing satisfying relationships with customers. Chapter 4 Slide 9

Successful marketing strategies identify customer needs and then develop and market products viewed as superior by customers. provide products perceived as superior maintain successful customer relationships offer the appropriate marketing mix product price promotion place Marketing success depends upon offering the best product at an acceptable price where the demand exists. Customers learn about the products and services through promotion. Chapter 4 Slide 10 Customer Focus

Weekend Entertainment Choices Every weekend, there are numerous entertainment choices ranging from community celebrations and concerts to a wide array of sporting events. These events must earn a profit. The event’s planners and organizers need to know the breakeven point, or the minimum sales and attendance required to cover all of the expenses of organizing, planning and promoting the event Profit is then any revenue earned beyond the breakeven point. Chapter 4 Slide 11

Weekend Entertainment Choices Cities of all sizes want to capitalize on the revenue earned from hosting sporting events. Restaurants, hotels, motels, and service stations all have a vested interest in events hosted in their communities. Chapter 4 Slide 12

Opportunity Cost Car races, rodeos, craft fairs, and community celebrations are just a few of the additional entertainment options for consumers. Factors that individuals consider when deciding on attending an entertainment event include convenience, pleasure, dollar cost and opportunity cost. Opportunity cost may be defined as the value of the next best alternative that you forgo when making a choice. The value is measured in terms of the benefits that you are giving up. Ex: You want to go to a concert and a Nats game but you cannot afford to do both. If you go to the concert, the opportunity cost would be the Nats game. Chapter 4 Slide 13

Lesson 4.2 Discover What People Want Goals Explain the importance of understanding buyer behavior when making marketing decisions. List and describe means of collecting marketing information for use in decision making. Chapter 4 Slide 14

UNDERSTAND BUYER BEHAVIOR The economic market includes all of the consumers who will purchase a product or service. Two major goals of marketing are to determine what consumers want and how much they are willing to pay. To achieve these goals, marketers must understand the actions of consumers, including their spending habits and buying motives. Chapter 4 Slide 15

Consumer Spending Habits It is important to research the spending habits of consumers in order to maximize profits on items they purchase. The price people are willing to pay for a ticket depends upon their degree of interest, which may be influenced by the national importance of the event, the popularity of the participating athletes or celebrities, and the rivalry associated with the game. Chapter 4 Slide 16

The price fans are willing to pay is also related to their perception of the benefits derived. Benefits derived refers to the value people believe they receive from a product or service. Ex: feeling of pride when wearing a sweatshirt that shows off a team logo Chapter 4 Slide 17 Consumer Spending Habits

The global market has intense competition. Organizations must determine where they have a comparative advantage. Comparative advantage is the capability to produce products or services more efficiently and economically than the competition. When a business can produce a product more efficiently and economically than others, it should be able to pass along production cost savings to its customers in the form of lower prices. Chapter 4 Slide 18

Consumer Wants and Needs Maslow, an American psychologist, created a hierarchy of needs which identifies five human areas of needs. This hierarchy of needs is often referenced by marketers when studying human behavior in relation to customer needs and wants. Basic needs must be satisfied first and then it will progress. Chapter 4 Slide 19

Chapter 4 Slide 20

Marketing research is conducted to determine why customers spend money on goods and services. Consumers make emotional purchases which is when they spend little thought during emotional highs and lows. Fans may be emotionally charged to buy a high-priced t-shirt at a concert b/c they are so excited. Rational purchases take place when individuals recognize needs and wants, assess their priorities and budget, conduct research, compare alternatives, and then make purchases based upon careful thought and sound reasoning. Patronage purchases are based on loyalty to a particular brand or product. Chapter 4 Slide 21 Consumer Wants and Needs

GATHER INFORMATION Most consumers use the decision-making process to decide how to spend their money. Chapter 4 Slide 22

The decision-making process involves the following steps. recognize a need or a want conduct product research evaluate choices decide what to purchase evaluate the product after the purchase Chapter 4 Slide 23 The Decision Making Process

Information Needed for Marketing Decisions Information about consumers that is important to consider include demographics shopping behaviors how consumers spend money product and brand preferences frequency of purchases Chapter 4 Slide 24

The business environment impacts consumer spending as follows: economic uncertainty reduces consumer spending marketplace competition provides consumers with choices technological advances have impacted how consumers research and buy products Chapter 4 Slide 25 Information Needed for Marketing Decisions

Sources of Information for Businesses In order to help customers with the decision- making process, it is essential to collect information about their needs and buying behaviors. internal sources are a business’s own customer records, sales records, production records, and operation records. external sources are government reports, trade and professional organizations, business publications, commercial data, and information services. Chapter 4 Slide 26

Organizations often conduct research to learn more about consumer behavior. Primary data is obtained for the first time and specifically for the particular problem or issue being studied Secondary data is information previously collected for another purpose but is now found useful in the current study Chapter 4 Slide 27 Sources of Information for Businesses

Lesson 4.3 Target Markets Goals Define target market and market segment. Describe how businesses use market segmentation. Chapter 4 Slide 28

DETERMINE THE TARGET MARKET The first step in marketing a product is to determine who specifically “the customer” is for the product. A target market is a specific group of consumers you want to reach. In order to promote and sell products and services, a company must know the needs and wants of its target market. Chapter 4 Slide 29

Focus Marketing Efforts Because it would be impossible to satisfy the needs of every consumer, businesses must narrow down the focus of its marketing efforts. A market segment is a group of consumers within a larger market who share one or more characteristics. Millions of people in the U.S. enjoy college basketball, but a smaller group especially enjoy Kentucky basketball. Consumers belong to multiple market segments. Ex: Fans of specific bands who follow concert tours; Snowbirds who move South for the winter. Marketers must identify the market segment to which they want to sell. Chapter 4 Slide 30

Meet Target Market Needs Business and entertainment organizations must analyze market segments in order to devise the most effective marketing strategies. Market segmentation data can improve business decision making. number of potential customers customer income level level of interest in product or service Chapter 4 Slide 31

MARKET SEGMENTATION Businesses do not try to satisfy the needs of all possible customers. Businesses recognize that individuals have different wants and needs and view product and service choices quite differently. Markets may be segmented in many ways. geographic location demographics psychographics behavior Chapter 4 Slide 32

Geographic Segmentation Geographic segmentation divides markets into physical locations, such as Eastern, Northern, Southern, and Western regions of the U.S. or urban and rural areas of a state. Different apparel is stocked in sporting good chains in different parts of the country. Chapter 4 Slide 33

Demographic Segmentation Demographic segmentation focuses on information that can be measured, such as age, income, profession, gender, education, marital status, and household size. Ex: Marketers might use income information to target advertising for upscale hotels to those who can afford them. What would this look like? Chapter 4 Slide 34

Psychographics Segmentation Psychographics focus on characteristics that cannot be physically measured, such as, values, interests, lifestyle choices, and emotions. Consumers frequently make decisions based upon emotions. Sports fans will buy more clothing bearing their team’s logo right after the team has a big victory. Chapter 4 Slide 35

Behavioral-Based Segmentation Behavioral-based segmentation focuses on a customer’s attitude toward products and services. Two categories of behavioral-based segmentation include product usage and product benefits. Product usage reflects what products you use and how often. One promotion may encourage frequent visitors to continue to visit the park by purchasing a season pass. Another promotion may encourage infrequent visitors to visit the park more often. Chapter 4 Slide 36

Behavioral-Based Segmentation Marketers also group consumers based on the benefits derived from products or services. Benefits derived from attending a sporting event include the satisfaction of spending time with the family or of showing team spirit. Marketers will examine the benefits derived and target their promotions to the different market segments. Chapter 4 Slide 37

Capture a Market Share Every business wants to sell to the maximum number of potential customers. Market share is the percentage of total sales of a product or service that a company expects to capture in relation to its competitors. Businesses determine the most effective means of using their resources to reach a target market. Research is conducted to determine who is spending money and how much on different products and services. The clothing industry provides a good example of how frequently teenager tastes in products change. To capture a bigger market share, businesses must keep up with trends of the market. Chapter 4 Slide 38

Lesson 4.4 Customer Service Goals Explain the importance of outstanding customer service. Explain what it means to establish a service culture. Chapter 4 Slide 39

OUTSTANDING SERVICE EQUALS SUCCESS Business success depends on excellent customer service. Customer relationships should continue after the sale of goods and services. The best strategy for a business to rise above the competition is to provide uncompromising, outstanding customer service. Chapter 4 Slide 40

A Track Record for Great Customer Service The customer service gap is the difference between customer expectations and the services actually received Customers are likely to tell at least 10 people about their poor customer service experiences. Chapter 4 Slide 41

Training Programs That Make an Impact Individuals hired for customer service positions should have a positive attitude and look forward to meeting the public. Proper employee training in proactive, efficient and courteous customer service is critical to providing a pleasant experience for customers. Happy employees are more likely to treat customers well. Employees in Nordstrom’s shoe department are trained to bring out three pairs of shoes when a customer requests to try on a pair. Chapter 4 Slide 42

How May I Help You? “It’s not my department” should be replaced with “How may I help you?” A mystery guest is hired by an outside firm to have an individual assess the performance of a business. Feedback on the individual’s experience as a customer is then provided to the hiring business Chapter 4 Slide 43