CHAPTER 11: MARKETING
Building Profitable Connections with Your Customers
MARKETING IS MORE THAN ADVERTISING
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.

PRODUCTS PROVIDE UTILITY IN A NUMBER OF WAYS
Think UPS or FedEx
Think Smoothie King
Satisfies wants
by converting
Form
products into a
Utility
finished form
Time
Utility
The ability of goods
Satisfies wants
by providing
goods and
services at a
convenient
place
and services to
satisfy wants.
Place
Utility
Think ATM’s
Ownership
Utility
Think hassle free
purchasing
Satisfies wants
by providing
goods and
services at a
convenient time
Satisfies wants
by smoothly
transferring
ownership of
goods and
services from
seller to buyer
THE SCOPE OF MARKETING: IT’S EVERYWHERE

People Marketing

Place Marketing

Event Marketing

Idea Marketing
THE EVOLUTION OF MARKETING: FROM
THE PRODUCT TO THE CUSTOMER
What is Customer Relationship
Management ?
 The on-going process of acquiring,
maintaining, and growing profitable customer
relationships by delivering unmatched value.
 Requires collecting, managing, and applying
the right data at the right time for the right
person (and every repeat customer is the “right
person”!)
THE CUSTOMER:
FRONT AND CENTER
Customer Relationship
Management (CRM)
Limited
Relationships
Full
Partnerships

Value

Customer Satisfaction

Customer Loyalty
Customer Relationship Management

Customer acquisition/retention tool
 Sales
and marketing support
 Data collected at all contact points
 Stored in data warehouse
 Data
analysis and data mining
 Ultimate
objective is lock-in
 Vested
interest not to change
Joe’s home page
Customer Relationship Management

Did you know ????

It cost 6x more to sell a new customer than to an existing one…

A typical dissatisfied customer will tell 8 to 10 people about his/her
experience…

Annual Customer Retention of 90% means that a business will lose half
of their customers every 5 years…

A company can boost it’s profits 85% by increasing it’s customer
retention by just 5%…

70% of complaining customers will do business with a company again if
it quickly takes care of the service “snafu”...
THE MARKETING MIX
Product
Strategy
Price
Strategy
Promotion
Strategy
Place
Strategy
Product
Price
Promotion
Place
MARKETING STRATEGY
Marketing Mix assists in answering ….
• Where are you going and how will you get there?
• Who is your target audience and how will you reach them?
Competitive
Economic
Social /
Cultural
Political /
Legal
Technological
MARKET SEGMENTATION
Selecting a target market
begins with dividing your
market into segments.
Marketers may select
multiple segments to target.
CONSUMER MARKETS VS BUSINESS MARKETS

Consumer
Markets
Products for personal
consumption.
A Well Chosen Target
Market:

Size

Profitability

Accessibility

Limited Competition
How will the
buyer use the
product?
Business
Markets
Products used
directly or indirectly
to produce other
products.
Different approaches to select target markets.
THE GLOBAL MARKETING MIX


Do you need to change your
marketing mix for every
country?
Most consumer products
require a new marketing mix
for each global market.
MARKET SEGMENTATION
CONSUMER

BUSINESS
Demographic
Senior citizen living facilities

Geographic
Pickups in southern US

Psychographic
Porshe, Sports Illustrated

Behavioral
• Geographic
• Customer-based
• Product-use based
CUSTOMER BEHAVIOR: DECISIONS,
DECISIONS, DECISIONS
CONSUMER DECISION MAKING PROCESS
Need Recognition
Information Search
Evaluation of Alternatives
Purchase Decision
Postpurchase Behavior
INFLUENCE IN DECISION MAKING
Cultural:
• Values, attitudes, customs,
social class
Social:
• Family, friends & reference
groups
Personal:
• Demographics, personality
attitudes,
Psychological: • Motivation,
perceptions, learning
BUSINESS BUYER BEHAVIOR

Rationale Criteria

Specific Purchase Criteria

Objective Standards

Input from Multiple Internal Sources

Formal Process

Frequently Seek Customized Goods
REQUEST FOR PROPOSAL

An invitation for suppliers, through a bidding process, to
submit a proposal on a specific commodity or service.





One of the best methods for leveraging a company's negotiating ability and
purchasing power with suppliers.
Brings structure to the procurement decision and allows the risks and benefits
to be identified clearly upfront.
Is lengthier than others, so it is used only where its many advantages
outweigh any disadvantages and delays caused.
Dictates the structure and format of the supplier's response.
The creativity and innovation that suppliers build into their
proposals are used to judge supplier proposals
MARKETING RESEARCH: SO WHAT DO THEY
REALLY THINK?


Monitor and predict customer
behavior
Evaluate and improve marketing
mix

Better marketing decisions

More value for consumers

More profits for business
CONDUCTING MARKET RESEARCH
1.
2.
3.
4.
5.
6.
7.
8.
Define the problem
Access available information
Gather additional information
Review internal records; interview employees
Collect outside data
Organize and interpret data
Make a decision and take action
Assess the results of the action
DEFINE THE PROBLEM

List the possible causes
 Eliminate

any that can not be measured
Beware of symptoms

Your company has missed its revenue targets
 Symptom – sales declined
 Possible causes:





Have your customers changed?
Have their tastes changed?
Have their buying habits changed?
Have you changed your product?
Are there new competitors?
GATHERING INFORMATION


Assess what you already have available
If you need more…
 Stay
as close to home as possible
 Sales
records
 Complaints
 Receipts
 Credit records
 Ask
your employees
MARKETING RESEARCH DATA
Secondary
Data: Existing
Primary Data:
New Data
• Lower Cost
• More Expensive
• May not be Specific
• Customized
•
• Frequently Outdated
• Fresh, New
• Available to Competitors
• Proprietary
 Already published material
 Trade associations
 Direct mail
 Questionnaires
 Telephone or street surveys
 Focus Groups
 Test marketing
ORGANIZING AND INTERPRETING DATA

Prioritize the data with the most important on top
 What
strategies are suggested?
 How can they be accomplished?
 How are they different from what I’m doing?
 What current activities should be increased?
 What current activities should be decreased or
dropped?
MAKING DECISIONS AND TAKING ACTION

Prioritize each possible strategy from the standpoint
of:
 Immediate
goal to be achieved
 Cost to implement
 Time to accomplish
 Measurements

Select those with the greatest impact
 Develop
tactics to implement
ASSESS THE RESULTS



Analyze your progress measures
Adjust if necessary
At the conclusion..
 Did
you achieve your goal ?
 Should the decision be renewed or expanded ?
A MAJOR MARKETING SHIFT: SOCIAL
RESPONSIBILITY

Marketers have responded to social demands:
Setting higher standards for environmentalism
 Abolishment of sweatshops
 Involvement in the community


Many companies have begun to employ green
marketing
GO GREEN
 Target consumers who buy based on their convictions

A MAJOR MARKETING SHIFT: TECHNOLOGY

Technology has revolutionized marketing
 Power
has shifted from producers to consumers
 Customers
have 24/7 access to information
 Marketers
have an abundance of promotional
opportunities
 Data
can be used to develop one-to-one relationships
with customers

Companies can mass customize products for customers
Marketing To Your Foundation
Simulation Customers
Customers
Product Questions:
 What do the customers want?
 What are the characteristics of the product that are
important to customers?
 What is the most important product characteristic
• In the low tech segment?
• In the high tech segment?
 What is “perceived age” of a product?
 How is reliability measured?
Pricing Questions:
 What do the customers want?
 What is the price range for low / high tech products?
 How price sensitive are the customers?
 What are the competitors charging?
 Can I lower my price and still earn a ‘fair return’ on my
investment?
Promotional mix
 You will invest money in a “promotion” budget and
create “awareness”.


It relates to your advertising efforts.
The awareness you create is specific to a single product.
 You will invest money in a “sales” budget and create
“access” to your products.


Accessibility applies to the segment, not the product
Sales Budget is spent on distribution, order entry, customer
service, etc.
Sales Forecast

Assess how the total market will perform


Assess your performance and market share


What is the overall economic climate ?
Will customers make decisions on the same basis they
have in the past ?
How will your competitors perform
Will there be new competitors ?
 Will they introduce new products ?
 Will some competitors leave the market ?
