1. Building Customer Relationships Through Effective Marketing

2. Learning Objectives
11-1 Understand the meaning of marketing and the importance of management of customer relationships Explain how marketing adds value by creating several forms of utility Understand what markets are and how they are classified Understand market targeting 11-5 Understand mixed targeting

3. Learning Objectives (continued)
11-6 Explain how the marketing environment affects strategic market planning Understand the major components of a marketing plan Describe how market measurement and sales forecasting are used Identify the major steps in the consumer buying decision process and the sets of factors that may influence this process.

4. Marketing
Marketing is the activity, set of institutions, and processes for…
Creating
Communicating
Delivering
Exchanging
…offerings that have value for customers, clients, partners, and society at large

5. Eight Major Marketing Functions

6. Managing Customer Relationships
Presentation must address…
Why are customer relationships important?
How do relationships affect sales?
How do relationships affect the reputation of a company?
Give an example of a company with good and bad customer relationships and explain.
Additional Resources
Websites helping with CRM
Calculating customer lifetime value

7. Managing Customer Relationships
Relationship marketing
Establishing long-term, mutually satisfying buyer-seller relationships
Customer relationship management (CRM)
Using information about customers to create marketing strategies that develop and sustain desirable customer relationships
Customer lifetime value
Measure of a customer’s worth (sales minus costs) to a business over one’s lifetime
Additional Resources
Websites helping with CRM
Calculating customer lifetime value

8. Customer Loyalty What do customers want?
Sometimes it’s more profitable to retain customers by offering them big rewards than attracting new customers who may never develop the same loyalty.

9. Utility: The Value Added by Marketing
Presentation must address
4 basic types of a good/service utility with examples
What type of utility will our company hopefully offer?
Choose one or two well known businesses and explain what types of utility they do or do not offer.

10. Utility: The Value Added by Marketing
The ability of a good or service to satisfy a human need
Kinds of utility:
Form utility: Created by converting production inputs into finished products
Place utility: Created by making a product available at a location where customers wish to purchase it
Time utility: Created by making a product available when customers wish to purchase it
Possession utility: Created by transferring title (ownership) of a product to a buyer

11. Types of Utility

12. Utility: Putting Products at Customer’s Fingertips
Firms try to provide customers with products whenever and wherever they need them

13. Markets and Their Classification
Your presentation must address….
The 4 main types of markets, with examples
What type of market will our company hopefully serve?
Choose one well known business and analyze the type of market they serve and give details.
Additional Resources
List of the largest consumer markets

14. Markets and Their Classification
Market: Group of individuals or organizations, or both, that need products in a given category and that have the ability, willingness, and authority to purchase such products
Consumer markets: Purchasers and/or households members who intend to consume or benefit from the purchased products and who do not buy products to make a profit
Additional Resources
List of the largest consumer markets

15. Types of Markets
Business-to-business (industrial) markets: Purchase specific kinds of products for use in making other products for resale or for day-to-day operations
Governmental markets: Buy goods and services to maintain internal operations and to provide citizens with such products as highways, education, water, energy, and national defense
Institutional markets: Churches, not-for-profit private schools and hospitals, civic clubs, fraternities and sororities, charitable organizations, and foundations
Additional Resources
Institutional Banking

16. Developing Marketing Strategies
Marketing strategy: Plan that will enable an organization to make the best use of its resources and advantages to meet its objectives
Consists of:
The selection and analysis of a target market
The creation and maintenance of an appropriate marketing mix (product, price, distribution, and promotion)

17. Target Market Selection and Evaluation
Your presentation must address…
What is the meaning of a target market?
What is the difference between undifferentiated and differentiated market targeting, and why is the latter more effective?
What are some common market differentiation types, and which will apply to our business?

18. Target Market Selection and Evaluation
Women
Teenagers
College Students
New Parents
Men
Baby Boomers
Target market: Group of individuals, organizations, or both, for which a firm develops and maintains a marketing mix suitable for the specific needs and preferences of that group

19. Undifferentiated Approach
Directing a single marketing mix at the entire market for a particular product
Useful in only a limited number of situations

20. Market Segmentation Approach
Group of individuals or organizations within a market that share one or more common characteristics
Additional Resource
Market segmentation related to sports

21. Reaching the Right Market Segments
The market for fragrances is segmented based on gender. Some fragrances are aimed at men, while others, such as the perfume featured in this Gucci advertisement, are aimed at women.

22. Differentiated Target Strategies
Two types of vitamins, two different differentiated targeting strategies. Both Bayer Flintstones Gummies and Alive! Women’s multivitamins are using a differentiated targeting strategy to aim at a different, single market segment. Although both products are vitamins, they are not competing for the same customers.
Additional Resource
Example of creating a marketing plan
COURTESY OF THE ADVERTISING ARCHIVES; ©J GROUP PHOTO

23. Differentiated Market Segmentation

24. Class Exercise
Identify one or several characteristics or variables that could be used to segment the markets for each of these products.
Recreational vehicles (RVs)
Baby food
Rolls Royce automobiles
Snow tires
Hotel rooms
Magazines
Soft drinks
Movies
Shoes
Bicycles

25. Common Bases of Market Segmentation

26. Creating a Marketing Mix
Your presentation must address….
What is a marketing mix?
How does this related to market segmentation?
Give a detailed example of how a well known business uses this strategy.
What variables will our business try to emphasize to maximize sales, and why?

27. Creating a Marketing Mix
A business firm controls four important elements of marketing that it combines in a way that reaches the firm’s target market
Product
Price
Distribution
Promotion

28. Marketing Mix

29. Developing the Right Marketing Mix
Firms have little control over the marketing environment. However, they can control the marketing mixes for their products—that is, the nature of the products themselves and how they are priced, distributed, and promoted. Marketers at Coca-Cola have developed a specific marketing mix for Coca-Cola Classic.

30. Developing a Marketing Plan
Your presentation must address
What is a marketing plan and why do we need one?
What are the six steps of market research?
Develop a basic market research plan for class discussion that relates to our future business.

31. Developing a Marketing Plan
A marketing plan is a written document that specifies an organization’s resources, objectives, strategy, and implementation and control efforts to be used in marketing a specific product or product group
Developing a clear, well-written marketing plan:
Helps establish a unified vision for an organization
Used for communication among employees
Covers responsibilities, tasks, and scheduled
Specifies how resources are allocated
Helps marketing managers monitor and evaluate the performance of the marketing strategy

32. Developing a Marketing Plan
A marketing plan is a written document that specifies an organization’s resources, objectives, strategy, and implementation and control efforts to be used in marketing a specific product or product group
Developing a clear, well-written marketing plan:
Helps establish a unified vision for an organization
Used for communication among employees
Covers responsibilities, tasks, and scheduled
Specifies how resources are allocated
Helps marketing managers monitor and evaluate the performance of the marketing strategy

33. Components of the Marketing Plan

34. Marketing Research
Process of systematically gathering, recording, and analyzing data concerning a particular marketing problem
Six steps of marketing research
Define the problem
Make a preliminary investigation
Plan the research
Gather factual information
Interpret the information
Reach a conclusion
The American Marketing Association’s website is an excellent resource for marketing information.

35. Six Steps of Marketing Research

36. Market Measurement and Sales Forecasting
Your presentation must include….
What is sales forecasting?
Find examples of sales forecasting in the real world and explain.
What types of sales forecasting will be appropriate for our business and why?
Additional Resource
Sales forecast for a restaurant

37. Market Measurement and Sales Forecasting
Sales forecast: Estimate of the amount of a product that an organization expects to sell during a certain period of time based on a specified level of marketing effort
Organizations use several forecasting methods
Executive judgments
Surveys of buyers or sales personnel
Time-series analyses
Correlation analyses
Market tests
Additional Resource
Sales forecast for a restaurant

38. Types of Buying Behavior
Your presentation must include…
What is buying behavior? Give examples.
What is purchasing power? Give examples.
Find real world examples of both and explain.
Try to predict the buying behavior and purchasing power for our market here at the school and explain.
Additional Behavior
Stages of buying process

39. Types of Buying Behavior
Buying behavior: Decisions and actions of people involved in buying and using products
Consumer buying behavior: Purchasing of products for personal or household use, not for business purposes
Business buying behavior: Purchasing of products by producers, resellers, governmental units, and institutions
Additional Behavior
Stages of buying process

40. Consumer Buying Behavior
Consumers’ buying behaviors differ for different types of products

41. Consumer Buying Power
Personal income: The income an individual receives from all sources less the Social Security taxes the individual must pay
Disposable income: Personal income less all additional personal taxes
Discretionary income
Disposable income less savings and expenditures on food, clothing, and housing
Of particular interest to marketers due to choice of how to spend it