©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

11 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Marketing: Building Profitable Customer Connections 2 LO1What are the objectives, processes and scope of marketing? LO2What is the customer’s role in marketing? LO3What are the elements of the marketing strategy? LO4What is the decision-making process for consumers? Businesses? LO5What are the key elements of marketing research? LO6How have social responsibility and technology impacted marketing?

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. American Marketing Association Definition 3 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 © The Studio Dog/Photodisc/Getty Images

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Marketing: Getting Value by Giving Value 4 The ability of goods and services to satisfy wants. Form Utility Time Utility Place Utility Ownership Utility

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Scope of Marketing: It’s Everywhere! 5 People Marketing Place Marketing Event Marketing Idea Marketing

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Evolution of Marketing: From the Product to the Customer 6

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Marketing Concept The marketing concept is a philosophy that makes customer satisfaction—now and in the future— the central focus of the entire organization. Unmatched value to customers is the only way to long-term profitability. 7

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Customer: Front and Center 8 Limited Relationships Full Partnerships Customer Relationship Management (CRM) Value Customer Satisfaction Customer Loyalty

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Customers must believe that your product is simply uniquely qualified to meet their needs Perceived Value versus Actual Value 9 Low cost does not mean value Value is a relationship between cost and benefits Loyal customers will pay more for their products Creating value is not enough

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Customer Satisfaction You have satisfied customers when you deliver perceived value above and beyond their expectations, but  Don’t overpromise  Don’t underpromise 10

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Marketing Strategy 11 Marketing Plan – organizations may have a formal or informal plan that directs their efforts Marketing Segmentation – the first step in planning your marketing strategy Who are the people who will buy the products? Divide the market into groups of people and segments to target (target market)

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. A Well-Chosen Target Market 12  Size  Profitability  Accessibility  Limited Competition

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Facebook Changes the Marketing Environment Facebook allows marketers to hypertarget  Identify segments  Tailor marketing Users like to remain in Facebook, more marketers are using websites less  Marketing is more social, and viral  Customers broadcast to friends/network Customer loyalty becomes more important 13 Source: How Facebook Changes Marketing And Sales, August 8, 2010, Forbes Website accessed September 21, 2011 © The Studio Dog/Photodisc/Getty Images

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Consumer Markets versus Business Markets 14 How will the buyer use the product? Consumer MarketsBusiness Markets Products for personal consumption Products used directly or indirectly to produce other products Different approaches to select target markets.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Consumer Market Segmentation 15 Demographic Geographic Psychographic Behavioral Marketers may select multiple segments to target © 2012 Zappos.com, Inc. or its affiliates.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Business Market Segmentation 16 Geographic Customer-based Product-use based

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Color Me…Hungry?! 17 Marketing researchers found that American consumers associate red with energy, passion, speed, and hunger. Purple is royalty, luxury, dignity, spirituality, nightmares, craziness Surrounding fast-food customers with red, yellow, and orange encourages them to eat a lot quickly and leave. ©David P. Smith/ Shutterstock.com Source: The psychology of color in marketing by June Campbell, accessed March 19, 2005, UCSI website, Color psychology in marketing by Al Martinovic, June 21, 2004, ImHosted website, Colors that sell by Suzanne Roman, November 29, 2004, ImHosted website, Reinvent Wheel? Blue Room. Defusing a Bomb? Red Room. By Pam Belluck, February 6, 2009, New York Times website, accessed February 26, 2009.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Marketing Mix 18

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Global Marketing Mix 19 Reevaluate marketing mix for each new country  Should it change?  How? Nike entered the China market by creating a Nike High School  Most Chinese do not play sports  The cost of Nike sneakers was twice the average salary  As Chinese middle class emerged, the “hip hoop” campaign paid off Source: Shoe makers gunning for Olympian feat by Andria Cheng, May 9, 2008, Market Watch website, accessed February 24, 2009; Nike Climbs to Record as Orders Surge, Profit Rises, by Matt Townsend and Robert Fenne, September 24, 2010, Bloomberg website, accessed April 12, 2011

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Marketing Environment Markets must conduct environmental scanning to analyze the external environment External environment includes competition and market share analysis Key external factors must be considered:  Economic  Social/Cultural  Technological  Political/Legal 20

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Global Marketing Environment The world market has become more accessible to every business Understanding the marketing environment is more important Researching opportunities in other countries is a growing challenge 21

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Customer Behavior: Decisions! Decisions! Decisions! 22 Understanding customers is critical Why do people buy one product but not another? How do they use the products they buy? ©Yuri Arcurs/ Shutterstock.com

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Elements That Influence the Consumer Decision-Making Process 23

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Consumer Decision Process 24 Postpurchase Behavior Evaluation of Alternatives Purchase Decision Information Search Need Recognition

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Business Buyer Behavior Buying products to produce other products Purchasers have training and apply rationale Buy according to purchase specifications and objective standards Input from multiple internal sources Formal process for highly customized goods, services and prices 25

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Marketing Research: So What Do They REALLY Think? 26 Identify external opportunities Monitor and predict customer behavior Evaluate and improve marketing mix Marketing research involves gathering, interpreting, and applying information to uncover opportunities and challenges

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Research Data Comparison 27 Secondary Data: Existing Data Primary Data: New Data that is Compiled Lower CostMore Expensive May not be SpecificCustomized Frequently OutdatedFresh, New Available to CompetitorsProprietary

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Primary Research Tools 28 Observation Research – the researcher does not directly interact with the research subject Scanner Data Traffic counters Garbage Analysis Survey Research – the researcher does interact with the research subjects Questionnaires Interviews Focus Groups

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. It Ain’t Easy Being Green Consumers around the world plan to spend more on green products Focus varies from country to country Successful brands touts green credentials in a simple, compelling message Delivering a valuable product that is honest about its claims is key Activists and intellectuals are credible spokespeople to create positive “buzz” 29 © The Studio Dog/Photodisc/Getty Images Source: Sustainable Consumption Facts and Trends from a Business Perspective, World Business Council for Sustainable Development Website, December 2008, accessed April 22, 2011.

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. An International Perspective Market research in other countries can be complicated Very few home phones in Latin America In the Middle East, knocking on doors is a crime Many firms hire local professionals for international market research 30

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Marketing and Society Leading-edge marketers have set high standards in: Environmentalism Abolishment of sweatshops Community outreach 31 A few examples: Starbucks Target General Electric

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Innovation Unleased! 32 Your creativity can aid innovation ARREST YOU’RE HISTORY ChimadenaRIGHT BAN ANA Abcdefghjmo pqrstuvwxyz TimeTimeYYYGuyMEREPEATBPULSEIANSE USRSE You’re under arrest History repeats itself Made in China Missing Link Time after Time Wise Guy Equal Rights Repeat after me Banana Split Mixing business with pleasure

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Technology and Marketing: Power to the People! Technology is shifting power to the consumer Consumers have 24/7 access to products and information all over the world Consumer expectation has increased Companies have more opportunities to mass customize products Data can be used to develop one-to-one relationships with customers The digital boom has created a variety of promotional opportunities 33

©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 11 ©2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Looking Back What are the objectives, processes and scope of marketing? What is the customer’s role in marketing? What are the elements of the marketing strategy? What is the decision-making process for consumers? Businesses? What are the key elements of marketing research? How have social responsibility and technology impacted marketing? 34