FHF McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

part Chapter 12 Dimensions of Marketing Strategy 5 FHF 11-2 Chapter 11 Customer-Driven Marketing Chapter 13 Digital Marketing and Social Networking

[] FHF Marketing A group of activities designed to expedite transactions by creating, distributing, pricing and promoting goods, services and ideas 11-3 Creates value by allowing individuals and organizations to obtain what they need and want

FHF MarketingMarketing Marketing is NOT  Manipulating consumers  Just selling & advertising Marketing IS  A systematic approach to satisfying consumers 11-4

[] FHF ExchangeExchange The act of giving up one thing (money, credit, labor, goods) in return (exchange) for something else (goods, services, ideas) 11-5

FHF The Exchange Process 11-6

FHF Functions of Marketing  Buying  Selling  Transporting  Storing  Grading  Financing  Marketing research  Risk-taking 11-7

FHF Creating Value Value  A customer’s subjective assessment of benefits relative to costs in determining the worth of a product  customer value = customer benefits – customer costs Benefits  Anything a buyer receives in an exchange Costs  Anything a buyer must give up to obtain the product’s benefits  Monetary costs and time and effort expended to procure the product 11-8

FHF M&M’s Create Value M&M’s uses personalization to: Increase market share Satisfy consumers with custom-created gifts Create value Reach out to new markets NASCAR Business-to-business markets  Launched to connect with consumers and offer personalized productshttp:// 11-9

FHF The Marketing Concept The idea that an organization should try to satisfy customers’ needs through coordinated activities that also allow it to achieve its own goals  Walmart’s slogan “Save Money, Live Better” 11-10

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

FHF Marketing Goals Customer satisfaction Achieve business objectives Boost productivity Reduce costs Capture market share 11-12

FHF Netflix Gives Consumers What They Want Netflix has been very successful at providing customers with what they want  Recommendations feature helps customize the experience for every customer  Constantly developing new initiatives that add to perceived value and enhance Netflix’s competitive advantage  Treats every interaction as a personal one 11-13

FHF Evolution of the Marketing Concept Production Orientation  19 th Century Manufacturing efficiency Sales Orientation  Early 20 th Century Supply exceeds demand; a need to “sell” products exists Market Orientation  1950s First determine what customers want New technologies are helping to improve communication and are helping companies learn what customers want 11-14

[] FHF Market Orientation An approach requiring organizations to gather information about customer needs, share information across the firm and use information to build long- term relationships with customers 11-15

FHF Marketing Strategy  A plan of action for developing, pricing, distributing and promoting products meeting the needs of specific customers The Oreo cookie  Market segmentation is geographic  Variations in the cookie recipe  Packaging may vary  Some countries pair the brand name with different company names  Promotions change based on cultural subtleties 11-16

FHF MarketMarket  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 11-17

FHF Total-Market Approach  A firm tries to appeal to all consumers and assumes that they all have similar needs  Salt, sugar, flour and white bread are all examples of products that typically are sold using a total market approach 11-18

FHF Market Segmentation  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 11-19

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 11-20

FHF Niche Marketing  A narrow segment focus usually on one small well-defined group with a unique and specific set of needs  Inland Marine Supply 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 11-21

FHF Target Market Strategies 11-22

FHF Bases for Market Segmentation  Demographic  Geographic  Psychographic  Behavioristic 11-23

FHF Developing the Marketing Mix 11-24

[] FHF ProductProduct A good, service, or idea that has tangible and intangible attributes that provide satisfaction and benefits to consumers 11-25

[] FHF PricePrice A value placed on a product or service that is exchanged between a buyer and seller 11-26

[] FHF DistributionDistribution Making products available to consumers in the quantities and locations desired 11-27

[] FHF PromotionPromotion A persuasive form of communication that attempts to expedite a marketing exchange by influencing individuals and organizations to accept goods, services and ideas 11-28

FHF Marketing Research  Systematic and objective process to collect information about potential customers  Guides marketing decisions  May include data on age, income, ethnicity, educational level, etc. of the target market and how frequently they purchase the product 11-29

FHF Marketing Information Systems  A framework for accessing information about customers from sources inside and outside the organization  Inside the organization: Continuous flow of information on prices, sales and expenses  Outside the organization: Data are available through public and private reports, census statistics, digital media sources, etc

FHF Collecting Data 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 11-31

FHF Online Marketing Research New information technologies are changing how businesses learn about consumers and market their products  Digital media and online social networks  Opportunity to reach new markets via the Internet Virtual Testing  Interactive multimedia research that combines sight, sound and animation to improve testing of products and their features 11-32

[] FHF Buying Behavior Decision processes and actions of people who purchase and use products 11-33

FHF Psychological Variables for Buying Behavior 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 11-34

FHF Social Variables for Buying Behavior 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 11-35

FHF Understanding Buying Behavior Trying to understand consumers is the best way to satisfy them  No exact tools 11-36

FHF The Marketing Environment External forces that directly and indirectly affect marketing strategy  Political, legal and regulatory forces  Social forces  Competitive and economic forces  Technological forces 11-37

FHF Green Marketing  Increasing trend toward green products  “Green” versions of popular brands Terra Choice is an environmental marketing agency Terra  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 11-38

FHF The Marketing Mix and Marketing Environment 11-39