Chapter 13 & 14 Category Created Lectures Nov 30, 2020 806 AM Files Property Reminder Status Open URL Updated Nov 30, 2020 421 PM Chapter 13: Marketing: Helping Buyers Buy LO 13-1 What is Marketing? 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 Evolution of Marketing Marketing Eras): Production → produce as much as you can, because there is a limitless market for it. Selling → companies emphasized selling and advertising in an effort to persuade consumers to buy existing products; few offered extensive service after the sale. Marketing concept → businesses recognized that they needed to be responsive to consumers if they wanted to get their business. Marketing concept had three-part business philosophy: 1 a customer orientation → find out what consumers want and provide it for them. Note: the emphasis on meeting consumer needs rather than on promotion or sales. Chapter 13 & 14 1 2 a service orientation → everyone in the organization has the same objective: customer satisfaction. 3 a profit orientation → focus on those goods and services that will earn the most profit and enable the organization to survive and expand to serve more consumer wants and needs. Customer relationship Customer relationship management CRM → the process of learning as much as possible about customers and doing everything you can over time to satisfy them —or even exceed their expectations— with goods and services. The Emerging Mobile/On-Demand Marketing Era → Consumers are demanding relevant information exactly when they want it. As digital technology continues to grow, consumer demands are likely to rise in four areas: a. Now → consumers want to interact anywhere, anytime. b. Can I? → they want to do new things with different kinds of information in ways that create value for them. c. For me → consumers expect all data stored about them to be used to personalize what they experience. d. Simple → consumers expect all interactions to be easy. Nonprofit Organizations and Marketing Organizations use marketing to promote everything from environmentalism and crime prevention to social issues. LO 13-2 The Marketing Mix We can divide much of what marketing teams do into four factors, called the four Ps to make them easy to remember. They are: Product Price Place Promotion Managing the controllable parts of the marketing process means: Chapter 13 & 14 2 1 designing a want satisfying product 2 setting a price for the product 3 putting the product in a place where people will buy it 4 promoting the product. These four factors are called the marketing mix. Marketing mix → the ingredients that go into a marketing program: product, price, place, and promotion. THE MARKETING PROCESS WITH THE FOUR PS Find opportunities Conduct research Identify a target market Design a product to meet the need based on research PRODUCT Do product testing Determine a brand name, design a package, and set a price PRICE Select a distribution system PLACE Design a promotional program PROMOTION Build a relationship with customers Designing a Product to Meet Consumer Needs Product → any physical good, service, or idea that satisfies a want or need plus anything that would enhance the product in the eyes of consumers, such as the brand name. Test marketing → the process of testing products among potential users. Brand name → a word, letter, or group of words or letters that differentiates one seller’s goods and services from those of competitors. Promotion → all the techniques sellers use to inform people about and motivate them to buy their products or services. LO 13-3 Marketing Research Process Marketing research → the analysis of markets to determine opportunities and challenges, and to find the information needed to make good decisions. Chapter 13 & 14 3 The Marketing Research Process Defining the question (the problem or opportunity) and determining the present situation. Marketing researchers need the freedom to discover what the present situation is, what the problems or opportunities are, what the alternatives are, what information they need, and how to go about gathering and analyzing data. Collecting research data Primary data → data that you gather yourself. Sources: interviews, surveys (offline & online), observation, focus groups, questionnaires, customer comments, letters from customers. Focus group → a small group of people who meet under the direction of a discussion leader to communicate their opinions about an organization, its products, or other given issues. Secondary data → information that has already been compiled by others and published in journals and books or made available online. Analyzing the research data Marketers must turn the data they collect in the research process into useful information. Choosing the best solution and implementing it After collecting and analyzing data, marketing researchers determine alternative strategies and make recommendations about which may be best and why. LO 13-4 The Marketing Environment Environmental scanning → the process of identifying the factors that can affect marketing success. Marketing Environment Global → Trade agreements; Competition; Trends; Opportunities; Internet Technological → Computers; Telecommunications; Bar codes; Data interchange; Internet changes Sociocultural → Population shifts; Values; Attitudes; Trends Chapter 13 & 14 4 Competitive → Speed; Service; Price; Selection Economic → GDP; Disposable income; Competition; Unemployment Two Different Markets: Consumer and Business-to-Business B2B Consumer market → All the individuals or households that want goods and services for personal consumption or use. Business-to-business B2B market → all the individuals and organizations that want goods and services to use in producing other goods and services or to sell, rent, or supply goods to others. LO 13-5 The Consumer Market Market segmentation → the process of dividing the total market into groups whose members have similar characteristics. Target marketing → marketing directed toward those groups (market segments) an organization decides it can serve profitably. Segmenting the Consumer Market Geographic segmentation → dividing the market by cities, counties, states, or regions. Demographic segmentation → dividing the market by age, income, education level, religion, race, and occupation. Psychographic segmentation → dividing the market using the group’s values, attitudes, and interests. Benefit segmentation → dividing the market by determining which benefits of the product to talk about. Volume (or usage) segmentation → dividing the market by usage (volume of use). Reaching Smaller Market Segments Niche marketing → the process of finding small but profitable market segments and designing or finding products for them. One-to-one marketing → developing a unique mix of goods and services for each individual customer. Building Marketing Relationships Chapter 13 & 14 5 Mass marketing → developing products and promotions to please large groups of people. Relationship marketing → marketing strategy with the goal of keeping individual customers over time by offering them products that exactly meet their requirements. The Consumer Decision-Making Process 💡 Problem recognition → information search → evaluate alternatives → purchase decision Faktor yang memengaruhi consumer behavior: Learning creates changes in an individual’s behavior resulting from previous experiences and information. Reference group is the group an individual uses as a reference point in forming beliefs, attitudes, values, or behavior. Culture is the set of values, attitudes, and ways of doing things transmitted from one generation to another in a given society. Subculture is the set of values, attitudes, and ways of doing things that results from belonging to a certain ethnic, racial, or other group with which one closely identifies (e.g., teenagers). Cognitive dissonance is a type of psychological conflict that can occur after a purchase. LO 13-6 The Business-to-Business Market Business-to-business B2B marketers include manufacturers; intermediaries such as retailers; institutions like hospitals, schools, and nonprofits; and the government. Several factors make B2B marketing different, including these: Customers in the B2B market are relatively few. Business customers are relatively large. B2B markets tend to be geographically concentrated. Chapter 13 & 14 6 Business buyers are generally more rational and less emotional than ultimate consumers. B2B sales tend to be direct, but not always. Whereas consumer promotions are based more on advertising, B2B sales are based on personal selling. Chapter 14: Developing and Pricing Goods and Services LO 14-1 Product Development and the Total Product Offer Value → Good quality at a fair price. When consumers calculate the value of a product, they look at the benefits and then subtract the cost to see if the benefits exceed the costs. Distributed product development Handing off various parts of your innovation process —often to companies overseas Total product offer → everything that consumers evaluate when deciding whether to buy something; also called a value package. Product line → a group of products that are physically similar or are intended for a similar market. Chapter 13 & 14 7 Product mix → the combination of product lines offered by a manufacturer. LO 14-2 Product Differentiation Product differentiation → the creation of real or perceived product differences. Marketing Different Classes of Consumer Goods and Services One popular classification of consumer goods and services has four general categories —convenience, shopping, specialty, and unsought. Convenience goods and services → products that the consumer wants to purchase frequently and with a minimum of effort. Shopping goods and services → those products that the consumer buys only after comparing value, quality, price, and style from a variety of sellers. Specialty goods and services → consumer products with unique characteristics and brand identity. Because these products are perceived as having no reasonable substitute, the consumer puts forth a special effort to purchase them. Unsought goods and services → products that consumers are unaware of, haven’t necessarily thought of buying, or find that they need to solve an unexpected problem. Marketing Industrial Goods and Services Industrial goods → products used in the production of other products. Sometimes called business goods or B2B goods. Installations consist of major capital equipment such as new factories and heavy machinery. Capital items are expensive products that last a long time. A new factory building is both a capital item as well as an installation. Accessory equipment consists of capital items that are not quite as longlasting or expensive as installations—like computers, copy machines, and various tools. LO 14-3 Packaging Changes the Product Packages must perform the following functions: Chapter 13 & 14 8 Attract the buyer’s attention. Protect the goods inside, stand up under handling and storage, be tamperproof, and deter theft. Be easy to open and use. Describe and give information about the contents. Explain the benefits of the good inside. Provide information on warranties, warnings, and other consumer matters. Give some indication of price, value, and uses. The Growing Importance of Packaging Bundling → grouping two or more products together and pricing them as a unit. LO 14-4 Branding and Brand Equity Brand → a name, symbol, or design (or combination thereof) that identifies the goods or services of one seller or group of sellers and distinguishes them from the goods and services of competitors. Trademark → a brand that has exclusive legal protection for both its brand name and its design. Brand name → a word, letter, or group of words or letters that differentiates one seller’s goods and services from those of competitors. Brand Categories Manufacturers’ brands → the brand names of manufacturers that distribute products nationally. Dealer (private-label) brands → products that don’t carry the manufacturer’s name but carry a distributor or retailer’s name instead. Generic goods → nonbranded products that usually sell at a sizable discount compared to national or private-label brands. Knockoff brands → illegal copies of national brand-name goods. Generating Brand Equity and Loyalty Brand equity → the value of the brand name and associated symbols. Chapter 13 & 14 9 Brand loyalty → the degree to which customers are satisfied, like the brand, and are committed to further purchases. Brand awareness → how quickly or easily a given brand name comes to mind when a product category is mentioned. Creating Brand Associations Brand association → the linking of a brand to other favorable images. Brand Management Brand manager (product manager) → a manager who has direct responsibility for one brand or one product line; called a product manager in some firms. LO 14-5 The New-Product Development Process THE NEW PRODUCT DEVELOPMENT PROCESS Idea generation (based on consumer wants and needs) Product screening Product screening → A process designed to reduce the number of new product ideas being worked on at any one time. Product analysis Product analysis→ Making cost estimates and sales forecasts to get a feeling for profitability of new-product ideas. Development (including building prototypes) Testing Concept testing → taking a product idea to consumers to test their reactions. Commercialization (bringing the product to the market) Commercialization → Promoting a product to distributors and retailers to get wide distribution, and developing strong advertising and sales campaigns to generate and maintain interest in the product among distributors and consumers. LO 14-6 The Product Life Cycle Product life cycle → a theoretical model of what happens to sales and profits for a product class over time. The four stages of the cycle are: Chapter 13 & 14 10 Introduction Growth Maturity Decline LO 14-7 Competitive Pricing Pricing Objectives Popular objectives include the following: Achieving a target return on investment or profit. Building traffic. Supermarkets often advertise certain products at or below cost to attract people to the store. These products are called loss leaders. The long-run objective is to make profits by following the short-run objective of building a customer base. Achieving greater market share. Creating an image. Furthering social objectives. Three Major Approaches to Pricing Strategy Cost-Based Pricing → berdasarkan cost. Demand-Based Pricing Target costing is demand-based → Designing a product so that it satisfies customers and meets the profit margins desired by the firm. Competition-Based Pricing Competitive based pricing → A pricing strategy based on what all the other competitors are doing. The price can be set at, above, or below competitors’ prices. Price leadership → the strategy by which one or more dominant firms set the pricing practices that all competitors in an industry follow. Break-Even Analysis Break-even analysis → the process used to determine profitability at various levels of sales. Chapter 13 & 14 11 BEP = T F C/(P − V C) TFC = Total fixed cost P = Price of one unit VC = Variable cost of one unit Total fixed costs → all the expenses that remain the same no matter how many products are made or sold. Variable costs → costs that change according to the level of production. Other Pricing Strategies Skimming price strategy → strategy in which a new product is priced high to make optimum profit while there’s little competition. Penetration strategy → strategy in which a product is priced low to attract many customers and discourage competition. Everyday low pricing EDLP → Setting prices lower than competitors and then not having any special sales. High–low pricing strategy → setting prices that are higher than EDLP stores, but having many special sales where the prices are lower than competitors’. Psychological pricing → pricing goods and services at price points that make the product appear less expensive than it is. Chapter 13 & 14 12
