1. Customer-Driven Marketing Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

3. 12-3 Nature of Marketing To create value by allowing people and organizations to obtain what they need and want

4. 12-4 The Exchange Relationship Exchange: The act of giving up something (money, credit, labor, goods) in return for something else (goods, services, or ideas) Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

5. 12-5 The Exchange Process: Giving Up One Thing in Return for Another Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

6. 12-6 Marketing Creates Utility Utility--a product’s ability to satisfy human needs and wants Place Time Ownership/Possession Form Information Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

7. 12-7 Functions of Marketing Selling Pricing Channel Management Product Service Management Marketing Information Management Promotion Market Planning Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

8. 12-8 The Marketing Concept The idea that an organization should try to satisfy customer’s needs through coordinated activities that allow it to achieve its own goals (profit) Did You Know? Trying to determine a customer’s true needs is difficult because no one fully understands what motivates people to buy. Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

9. 12-9 Evolution of the Marketing Concept The production orientation During the second half of the 19th century The sales orientation By the early part of the 20th century The marketing orientation By the 1950s Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

10. 12-10 Marketing Orientation Requires organizations to: Gather information about customer needs Share that information throughout the entire firm Use that information to help build long-term relationships with customers Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

11. 12-11 Developing Marketing Strategy Marketing strategy: A plan of action for developing pricing, distributing and promoting products that meet the needs of specific customers Two major components: Selecting a target market Developing the appropriate marketing mix Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

12. 12-12 Selecting a Target Market Market 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 effort Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

13. 12-13 Total-Market Approach The marketer tries to appeal to everyone and assumes that all buyers have the same needs Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

14. 12-14 Market Segmentation Market Segmentation: A strategy to divide the total market into groups of people who have relatively similar product needs Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

15. 12-15 Market Segment A collection of individuals, groups, or organizations who share one or more characteristics and have similar product needs and desires Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

16. 12-16 Niche Market Narrow market segment focus when efforts are on one small, well-defined segment that has a unique, specific set of needs Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

17. 12-17 Bases for Segmenting Markets Demographic Geographic Psychographic Product Usage Did You Know? During its first year of operation, sales of Coca-Cola averaged just nine drinks per day for total first-year sales of $50. Today, Coca-Cola products are consumed at the rate of one billion drinks per day. Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

18. 12-18 Developing the Marketing Mix Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

19. 12-19 Product A good, service, or idea that has tangible and intangible attributes that provide satisfaction and benefit to consumers Products should be sold at a profit Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

20. 12-20 Price A value placed on a product or service that is exchanged between a buyer and seller Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

21. 12-21 Distribution Making products available to consumers in the quantities and locations desired Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

22. 12-22 Promotion A persuasive form of communication that attempts to expedite a marketing exchange by influencing individuals and organizations to accept goods, services, and ideas Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

23. 12-23 Marketing Research & Information Systems Marketing research A systematic, objective process of getting customer information to guide marketing decisions Marketing information system A framework for assessing information about customers from internal and external sources Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

24. 12-24 Collecting Data Primary data Marketing information that is observed, recorded, or collected directly from respondents Secondary data Information that is compiled inside or outside an organization for some purpose other than changing the current situation Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

25. 12-25 Buying Behavior The decision processes and actions of people who purchase and use products Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

26. 12-26 Motives of Buying Behavior Rational Emotional Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

27. 12-27 Social Variables of Buying Behavior Social roles Reference groups Social classes Culture Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

28. 12-28 The Marketing Mix and the Marketing Environment Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

29. 12-29 Review Questions 1.When a business segments markets on the basis of personality characteristics, motives, and lifestyles, that segmentation is based on a.demographics b.geographic factors c.psychographics d.behavioristic characteristics 2.The act of giving up one thing in return for something else is a.marketing b.utility c.an exchange d.promotion Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved

30. 12-30 Review Questions 3.The psychological factors such as love and affection, often affect buying decisions. This is an example of what type of buying motive. a. Emotional b. Rational 4. In developing a marketing mix, what should be the central focus of all marketing activities? a.Price b.buyer or target market c.Product d.promotion Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved