1. Building Customer Relationships Through Effective Marketing

2. Learning Objectives
Understand the meaning of marketing and the importance of management of customer relationships.
Explain how marketing adds value by creating several forms of utility.
Trace the development of the marketing concept and understand how it is implemented.
Understand what markets are and how they are classified.
Understand the two major components of a marketing strategy—target market and marketing mix.

3. Learning Objectives (cont’d)
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.
Distinguish between a marketing information system and marketing research.
Identify the major steps in the consumer buying decision process and the sets of factors that may influence this process.

4. Marketing Creating, Communicating, Delivering, and Exchanging
Offerings that have value for customers, clients, partners, and society at large

5. Gathering Information
Marketing Functions
Exchanging
Buying
Selling
Distributing
Transporting
Storing
Facilitating
Financing
Standardization
Risk Taking
Gathering Information

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

7. Managing Customer Relationships
Who 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.
© SUSAN VAN ETTEN

8. 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

9. Utility: The Value Added by Marketing
Putting products at the
customer’s fingertips.
Firms try to provide customers with products whenever and wherever they need them.

10. Utility: The Value Added by Marketing
Types of Utility

11. The Marketing Concept
Providing goods and services that satisfy customers’ needs
To achieve success, a business must:
Communicate with potential customers to assess their needs
Develop a good or service to satisfy those needs
Continue to seek ways to provide customer satisfaction
Additional Resource
Tips for a successful business
Reasons for the success of small businesses

12. The Marketing Concept
Tell us what you really think. Surveys can be conducted in a variety of ways: in-person, by mail or fax, or online. Online surveys have made it very inexpensive for firms to gather customer feedback
© ALAMY CREATIVITY / ALAMY

13. Evolution of the Marketing Concept
Industrial revolution through the early twentieth century
Business effort directed toward production to meet great demand
Production orientation – Emphasis on increased output
1920s
Production began to exceed demand
Business efforts included selling goods than just producing them
Additional Resource
Marketing concepts for a small business

14. Evolution of the Marketing Concept
Sales orientation - Increased advertising, enlarged sales forces, and occasionally, high-pressure selling techniques
1950s
Business efforts focused on satisfying customers’ needs

15. Implementing the Marketing Concept
Obtain information about present and potential customers
Their needs
Satisfaction of the needs
Improving products
Customer opinions about the firm
© PIXSOOZ/SHUTTERSTOCK

16. Implementing the Marketing Concept
Provide a product that will satisfy customers
Price the product at an acceptable and profitable level
Promote the product to potential customers
Ensure distribution for product availability when and where wanted
Obtain information on the effectiveness of the marketing effort and modify efforts as necessary

17. 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
© ED BOCKSTOCK/SHUTTERSTOCK

18. Markets and Their Classification
Business-to-business (industrial) markets - Purchase specific kinds of products for use in making other products for resale or for day-to-day operations
Producer markets Reseller markets
Additional Resource
Samsung and the reseller market

19. Markets and Their Classification
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

21. 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)

22. Target Market Selection and Evaluation
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
Women
Teenagers
College Students
New Parents
Men
Baby Boomers

23. Target Market Selection and Evaluation
Undifferentiated approach: Directing a single marketing mix at the entire market for a particular product
Useful in only a limited number of situations
© SUSAN VAN ETTEN

24. Target Market Selection and Evaluation
Market segment: Group of individuals or organizations within a market that share one or more common characteristics
Additional Resource
Market segmentation related to sports
© B.BBLES PHOTOLIBRARY / ALAMY

25. Developing Marketing Strategies
Reaching the right market segments. Some skin care products are aimed at women, while others, such as the LAB Series, are aimed at men. Very few brands of moisturizers that are aimed at both men and women.
COURTESY OF THE ADVERTISING ARCHIVES

26. Developing Marketing Strategies
Two pens, two different concentrated targeting strategies.
They do not compete for the same customers.
Additional Resource
Example of creating a marketing plan
COURTESY OF THE ADVERTISING ARCHIVES; ©J GROUP PHOTO

27. Developing Marketing Strategies
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 17th ed. (Mason, OH;: South-Western/Cengage Learning 2014). Adapted with permission.

28. Developing Marketing Strategies
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 17th ed. (Mason, OH;: South-Western/Cengage Learning 2014). Adapted with permission.

29. Developing Marketing Strategies
Source: William M. Pride and O. C. Ferrell, Marketing: Concepts and Strategies, 17th ed. (Mason, OH;: South-Western/Cengage Learning 2014). Adapted with permission.

30. Demographics Psychographics Geographic Behavioristic
Market Segmentation
Demographics
Psychographics
Geographic
Behavioristic

31. Advertisers’ Classification of Audiences
Name
Age
Needs
Influencer
Millennials
<25
Tech Savvy
Media saturated, ethnically diverse
Gen Xers
25-38
Media Savvy
More cynical than millennials, individualistic
Boomers
39-58
Avid
Consumers
Deny aging process
Matures
57+
Practical, pragmatic
Money conscious
Source: “Audience Research,” MediaKnowAll,

32. 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

33. Marketing Mix

34. Creating a Marketing Mix
The maker of All Small & Mighty has developed a specific marketing mix for the detergent. Who do you think the product is aimed at?

35. Marketing Strategy and the Marketing Environment
The marketing mix consists of elements that a firm controls and uses to reach its target market
Forces that make up the external marketing environment
Economic forces
Sociocultural forces
Political forces
Competitive forces
Legal and regulatory forces
Technological forces
Additional Resource
Marketing mix of Nestle

36. Developing a Marketing Plan
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

37. Developing a Marketing Plan
Components of the Marketing Plan
Executive summary
Environmental analysis
SWOT analysis
Marketing objectives
Marketing strategies
Marketing implementation
Evaluation and control

38. 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

39. Marketing Information Systems
System for managing marketing information that is gathered continually from internal and external sources
Internal data sources
Sales figures, product and marketing costs, inventory levels, and sales force activities
External data sources
Suppliers, intermediaries, customers, competitors, and economic conditions
Outputs
Sales reports, sales forecasts, buying trends, market share

40. Marketing Information Systems
Can you hear me now? Would you interested in having a pre-recruited group of your customers ready and willing to participate in your surveys at a moment’s notice? If so, you might want to sign up for online software such as PortalPanel, produced the marketing research company Toluna.
© TOLUNA

41. Marketing Research
Process of systematically gathering, recording, and analyzing data concerning a particular marketing problem
The American Marketing Association’s website is an excellent resource for marketing information.

42. Six Steps of Marketing Research
Define the Problem
Investigate
Plan the Research
Gather Information
Interpret the Information
Reach a Conclusion

43. Using Technology to Gather and Analyze Marketing information
Database - Collection of information arranged for easy access and retrieval
Databases such as LEXIS-NEXIS, Reader’s Digest
Single-source data - Information provided by a single firm
Online information services - Offer subscribers access to , websites, mailing lists
Internet - Useful in accessing Web pages such as Nielsen and Advertising Age

44. Types of 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

45. Types of Buying Behavior

46. Consumer Buying Behavior
Recognizing a problem.
Problem recognition is the first stage of the consumer buying decision process. This ad makes consumers aware of an environmental problem they might not have known they were contributing to.

47. Consumer Buying Behavior
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

48. Business Buying Behavior
Business buyers consider a product’s quality, its price, and the service provided by suppliers
Business buyers are better informed than consumers about products and generally buy in larger quantities
In a business, a committee or a group of people, rather than just one person, decides on purchases