Chapter 11: Customer-Driven
Marketing
By: Chrishae Whitehead, Taylor
Whitney, Tierney Whitney, Vernisha
Williams, Darcy Williamson & Diante
Willis
Learning Objectives
• Define marketing, and describe the exchange process
• Specify the functions of marketing
• Explain the marketing concept and its implications for
developing marketing strategies
• Examine the development of a marketing strategy, including
market segmentation and marketing mix
• Investigate how marketers conduct marketing research and
study buying behavior
• Summarize the environmental forces that influence marketing
decisions
• Assess a company’s marketing plans, and propose a solution
for resolving its problem
Nature of Marketing
• Marketing is a group of activities designed to expedite
transactions by creating, distributing, price, and promoting
goods, services, and idea. These activities create value by
allowing individuals and organizations to obtain what they
need and what.
• A business cannot achieve its objective unless it provides
something that customer’s value.
• Marketing is an important part of a firm’s overall strategy.
Marketing 4Ps
• Planning
• Pricing
• Promotion
• Product
The Exchanging Relationship
• Exchanging the act of giving up one thing (money, credit,
labor, goods) in return for something else (goods, services, or
ideas)
Functions of Marketing
• Marketing focuses on a complex set of activities that be
performed to accomplish objectives and generate exchanges.
These activities include buying, selling, transporting, storing,
grading, financing, marketing research, and risk taking.
• Buying consumers, stores, business, governments
• Selling advertising, personal selling, sales promotion,
publicity, and packaging.
• Transporting- is the process of moving products from the
seller to the buyer
• Storing- like transporting, storing is part of the physical
distribution of products and includes warehousing goods.
Functions of Marketing Cont.
• Grading- refers to standardizing products by dividing them
into subgroups and displaying and labeling them so that
consumers clearly understand their nature and quality.
• Financing- For many products, especially large items such as
automobiles, refrigerators, and new phones the marketer
arranges credit to expedite the purchases.
• Marketing Research- by gathering information regularly,
marketers can detect new trends and changes in consumer
tastes.
• Risk taking- Risk is the chance of loss associated with
marketing decisions.
Creating Value with Marketing
• Value- a customer’s subjective assessment of benefits relative
to costs in determining the worth of a product. (customer
value = customer benefits-customer cost)
• Customer benefits include anything a buyer receives in an
exchanging.
• Customer Cost- include anything a buyer must give up to
obtain the benefits the product provides.
• In developing marketing activities, it is important to recognize
that customers receive benefits based on their experiences.
Developing a Marketing Strategy
• To implement the marketing concept and customer
relationship management, a business needs to develop and
maintain a marketing strategy, a plan of action for
developing, pricing, distributing, and promoting products that
meet the needs of specific customers
Selecting a Target Market
• A market is a group of people who have a need, purchasing
power, and the desire and authority to spend money on
goods, services, and ideas
• A target market is a more specific group of consumers on
whose needs and wants a company focuses its marketing
efforts.
• Marketing managers may define a target market as a
relatively small number of people within a larger market
Selecting a Target Market Cont.
• Some firms uses a total-market approach, in which they try to
appeal to everyone and assume that all buyers have similar
needs and wants.
• Most firms, though, use market segmentation and divide the
total market into groups of people.
• Companies use market segmentation to focus their efforts
and resources on specific target markets so that they can
develop a productive marketing strategy.
• Two common approaches to segmenting markets are the
concentration approach and multisegment approach.
Market Segmentation Approaches
• In the concentration approach, a company develops one
marketing strategy for a single market segment.
- The concentration approach allows a firm to specialize,
focusing all its efforts on the one market segment.
• In the multisegment approach, the marketer aims its
marketing efforts at two or more segments, developing a
marketing strategy for each.
For a firm to successfully use a concentration or
multisegment approach to market segmentation,
several requirements must be met:
1. Consumers’ needs for the product must be heterogeneous.
2. The segments must be identifiable and divisible.
3. The total market must be divided in a way that allows
estimated sales potential, cost, and profits of the segments
to be compared.
4. At least one segment must have enough profit potential to
justify developing and maintaining a special marketing
strategy.
5. The firm must be able to reach the chosen market segment
w/ a particular market strategy.
Bases for Segmenting Markets
Companies segment markets on the basis of
several variables:
1. Demographics – age, sex, race, ethnicity, income, education,
occupation, family size, religion, social class
2. Geographic – climate, terrain, natural resources, population
density, subcultural values
3. Psychographic – personality characteristics, motives,
lifestyles
4. Behavioristic – some characteristic of the consumer’s
behavior toward the product
Developing a Marketing Mix
• Marketing mix is a module that covers 4 activities of
marketing.
- These are product, price, promotion and distribution/place.
• These factors are controlled by the firm to achieve specific
goals within a dynamic marketing environment, and
manipulate customers in certain ways that the business sees
fit.
Product
• Product, whether a good, service or combination of both they
have an emotional and psychological value.
• Some ways to help market these is to maximize consumer
favourable attributes and minimize unfavourable attributes.
- An example of this is including a warranty with a product and
not making it more expensive.
Price
• Marketers see price as much more than a way of assessing
value.
• This is because value is a key element that relates directly to
revenue and profit.
• Price can also be altered quickly to stimulate demand and
supple or respond to competitors’ actions.
Distribution
• Also known as place, refers to the making of the product
available in the desired quantities.
• Retail stores are also like distribution stores as they make
products available and easy for the consumer to see the
product.
• With the use of the internet, retailers and other ‘middlemen’
of the industry are being eliminated as people can so easily go
straight to the manufactures, which minimizes costs in which
many consumers do not recognize.
Promotion
• A persuasive form of communication that attempts to
expedite a marketing exchange by influencing individuals,
groups, and organizations to accept goods, services and ideas
Marketing Research and Information
Systems
• Marketing research is a systematic, objective process which
gets information about potential customers to help guide
marketing decisions.
- A good example of this is making a survey and getting people
of the public to do it with the answers of the questions, giving
you an insight on what people like.
• Knowing what consumers want is a big advantage so you can
fit their needs and potentially make the sale.
Marketing Research and Information
Systems Cont.
• The 2 types of data which companies research are primary
data and secondary data.
• Primary data is information which is observed, recorded or
collected directly.
- A survey compiled by the company is an example of primary
data.
• Secondary data is information that is compiled inside or
outside an organization for some purpose other than
changing the current situation.
- Using information from the U.S Census Bureau and relating it
to the company is an example of secondary data
Online Marketing Research
• Online Marketing Research- researching in the pursuit of
collection of data online about buying behaviors information
of what people actually are buying and how they buy it.
New technologies are changing the way businesses learn
about theirs customers and the way businesses market their
products.
Interactive multimedia research or virtual testing combines
sight, sound, and animation to visualize the testing of
products design features and packaging.
Online Marketing Research Cont.
• Marketing research can use digital media and social network
to gather useful information: Examples: Twitter Myspace
Facebook Instagram
Linked In
These social media sites can also be substituted for focus
groups and online surveys.
Digital communication abilities have increased with emails,
through websites, on blogs, and social network sites.
Buying Behavior
• Buying Behavior- the decision process and actions of people
who purchase and use products.
Psychological Variables of Buying Behavior
-Perception
-Motivation
-Learning
-Attitude
-Personality
Social Variables of Buying Behavior
• Social Roles- a set of expectations for individuals based on
some position they occupy.
• -Reference group
• -Social classes
-Culture
Understanding Buying Behavior
Understanding what consumers what and need.
The Marketing Environment
-Political, Legal, and regulatory forces
-Social forces
-Competitive and economic forces
-Technological forces
Marketing is a vital concept/element of business and society.