1 12. Customer-Driven Marketing

2 How Marketing Creates Utility Marketing indirectly influences form utility Three kinds of utility are directly created by marketing: –Place utility –Time utility –Ownership utility Marketing activities add value to goods & services –Contribute to customer satisfaction

3 Eight Major Marketing Functions The exchange functions –Buying –Selling The physical distribution functions –Transporting –Storing The facilitating functions –Financing– Standardization & grading –Risk taking– Gathering marketing info.

4 The Marketing Concept Philosophy that involves entire organization in satisfying customer needs while achieving organizational goals Important to understand buyer behavior (Fig ) –Motivation of organizational buyers and consumers Relationship marketing –Involves developing long-term partnerships with customers, suppliers, related businesses –Purpose: to enhance customer satisfaction and stimulate long-term loyalty –E.g., affinity programs, co-marketing & co-branding

5 Components of a Market: Broad Market Classifications Consumer market –Non-reseller buyers who intend to consume product –Segmented according to: demographic, psychographic, geographic, product-related bases Organizational market –Business-to-business market –Four categories: Producer markets Governmental markets Reseller markets Institutional markets –Segmented according to: geographic, demographic, end-use bases

6 Developing the Marketing Strategy Two basic strategic elements: –Selection & analysis of the target market(s) Direct marketing activities to it/them using –Undifferentiated approach (mass marketing) –Market segmentation approach (divide market into groups) »Concentrated approach (one segment) »Differentiated approach ( 2+ segments) –Creation & maintenance of the marketing mix Product Price Distribution Promotion The marketing mix is the controllable part of the marketing environment

7 The External Marketing Environment Generally uncontrollable forces that include: –Sociocultural forces –Economic forces –Competitive forces –Technological forces –Regulatory forces (political & legal forces)

8 Developing a Marketing Plan Written document that specifies an organization’s resources, objectives, marketing strategy, and implementation and control efforts to be used in marketing a specific product or product group Components usually include: –Executive summary – Marketing strategies –Environmental analysis – Marketing implementation –SWOT analysis – Evaluation & control –Marketing objectives

9 Marketing Research Six steps: –Define the problem –Make preliminary investigation Examine internal secondary information –Data mining & data warehouses Examine external secondary published information, etc. –Plan the primary research –Implement the research –Interpret the information –Reach a conclusion