FHF Ferrell Hirt Ferrell M: Business 2 nd Edition

FHF 12 Customer-Driven Marketing Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

] [ Marketing A group of activities designed to expedite transactions by creating, distributing, pricing, and promoting goods, services, and ideas FHF Creates value by allowing individuals and organizations to obtain what they need and want 12-3

FHF Marketing is NOT Manipulating consumers Just selling & advertising Marketing IS A systematic approach to satisfying consumers 12-4

[ ] FHF The act of giving up one thing (money, credit, labor, goods) in return (exchange) for something else (goods, services, or ideas) Exchange 12-5

FHF The Exchange Process 12-6

FHF Permanent discounts (Wal-Mart’s model) Taking market share rather than focusing on growth Some stores are differentiating through going upscale Some are opening new stores to get greater market share Focus on value The New Marketing Environment in Retail 12-7

FHF Buying Selling Transporting Storing Grading Financing Marketing research Risk-taking Functions of Marketing 12-8

FHF The idea that an organization should try to satisfy customers’ needs through coordinated activities that also allow it to achieve its own goals. Wal-Mart’s slogan “Save Money, Live Better” The Marketing Concept 12-9

FHF Founded in 2005 Raised $25 million in venture capital Provides advertising services for small businesses Online promotion Personalized content Tracks success of advertising efforts Yodle 12-10

FHF Must know what customers want They are not selling goods and services, but: Ideas Benefits Philosophies Experiences Customers’ perception of value= Level of success Customer-Contact Employees 12-11

FHF Customer satisfaction Achieve business objectives Boost productivity Reduce costs Capture market share Marketing Goals 12-12

FHF Evolution of the Marketing Concept Production Orientation 19th Century Manufacturing efficiency Sales Orientation Early 20th Century Supply exceeds demand -need to “sell” products Marketing Orientation 1950s First determine what customers want 12-13

[ ] FHF An approach requiring organizations to gather information about customer needs, share information across firm, use information to build long-term relationships with customers Marketing Orientation 12-14

FHF Specialty’s Café and Bakery 25 bakery/café’s in U.S. Introduced online ordering in 2009 in response to slow sales Now 40% of all orders are online Customers customize orders and pick them up without waiting Marketing Strategy A plan of action for developing, pricing, distributing, and promoting products meeting the needs of specific customers

FHF A group of people who have a need, purchasing power, and the desire and authority to spend money on goods, services, and ideas Target Market A more specific group of consumers on whose needs and wants a company focuses its marketing efforts Market 12-16

FHF A firm tries to appeal to all consumers and assumes that they all have similar needs Salt, sugar, flour, white bread are all examples of products that typically are sold using a total market approach Total-Market Approach 12-17

FHF A strategy to divide the total market into groups of people with relatively similar product needs Market segment A collection of individuals, groups or organizations sharing one or more characteristics thus having relatively similar needs and desires for products. Market Segmentation 12-18

FHF Segmentation Approaches Concentration Approach A market segmentation strategy whereby a company develops one marketing strategy approach for a single market segment Multisegment Approach A market segmentation strategy whereby a company aims its efforts at two or more segments, developing a marketing strategy for each Segmentation Approaches 12-19

FHF A narrow segment focus usually on one small well-defined group with a unique and specific set of needs. Inland Marine Supply Based in Houston Fills grocery orders for ships with limited time at dock Delivers to ships in refrigerated vans Small added fee Niche Marketing 12-20

FHF Target Market Strategies 12-21

FHF Demographic Geographic Psychographic Behavioristic Bases for Market Segmentation 12-22

FHF Developing the Marketing Mix 12-23

[ ] FHF Product A good, service or idea that has tangible and intangible attributes that provide satisfaction and benefits to consumers 12-24

] [ A value placed on a product or service that is exchanged between a buyer and seller FHF Price 12-25

[ ] FHF Making products available to consumers in the quantities and locations desired Distribution 12-26

FHF Prevalence of smart phones have led to more online shopping Amazon paired with iPhone to allow customers to shop for books online, and to read information about products Sears even allows consumers to shop for refrigerators online Customers expect online shopping to be available and easy Mobile Shopping 12-27

[ ] FHF Promotion A persuasive form of communication that attempts to expedite a marketing exchange by influencing individuals and organizations to accept goods, services, and ideas 12-28

FHF Systematic and objective process to collect information about potential customers Guides marketing decisions Marketing Research 12-29

FHF Primary data Marketing information that is observed, recorded or collected directly from respondents (consumers). Secondary data Information compiled inside or outside the organization for some purpose other than changing the current situation Collecting Data 12-30

[ ] FHF Buying Behavior Decision processes and actions of people who purchase and use products 12-31

FHF Perception Process by which a person selects, organizes, and interprets information received from one’s senses. (hearing a radio ad, touching a product) Learning Brings changes in behavior based on information and experience Attitude Positive or negative feelings about something Personality Individuals distinguishing character traits, attitudes, or habits Psychological Variables for Buying Behavior 12-32

FHF Social Roles Set of expectations of individuals based on some position they occupy Reference Groups Groups with whom buyers identify and whose values or attitudes they adopt Social Classes Ranking of people into higher or lower positions of respect Culture Integrated, accepted pattern of behavior including thought, speech, beliefs, actions and artifacts Social Variables for Buying Behavior 12-33

FHF Trying to understand consumers is the best way to satisfy them No exact tools Understanding Buying Behavior 12-34

FHF External forces that directly and indirectly affect marketing strategy Political, legal and regulatory forces Social forces Competitive and economic forces Technological forces The Marketing Environment 12-35

FHF Green Marketing Increasing trend toward green products “Green” versions of popular brands ✴ Terra Choice is an environmental marketing agency Terra Choice ✴ Released a report “The Seven Sins of Greenwashing”The Seven Sins of Greenwashing ✴ Very little regulation of green marketing ✴ Consumers must be aware to make responsible choices 12-36

The Marketing Mix and Marketing Environment FHF 12-37

FHF 12-38