CHAPTER 13
Marketing:
Helping
Buyers Buy
McGraw-Hill/Irwin
Copyright © 2015 by the McGraw-Hill Companies, Inc. All rights reserved.
LEARNING OBJECTIVES
1. Define marketing, and apply the marketing concept
to both for-profit and nonprofit organizations.
2. Describe the four P’s of marketing.
3. Summarize the marketing research process.
13-2
LEARNING OBJECTIVES
4. Show how marketers use environmental scanning to
learn about the changing marketing environment.
5. Explain how marketers apply the tools of market
segmentation, relationship marketing and the study
of consumer behavior.
6. Compare the business-to-business market and the
consumer market.
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DAYMOND JOHN
FUBU
• Started sewing wool hats in his
apartment in 1989 and sold
them on the street.
• He started designing other
products and created the brand
FUBU.
• After many rocky years, John
has earned millions and advises
others on Shark Tank.
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NAME that COMPANY
This company studies population growth and
regional trends as it expands its product line for
specific regions of the country. Its research led to
the creation of Creole flavors targeted primarily
in the South and spicy nacho chees flavors mad
especially for Texas and California.
Name that company!
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WHAT’S MARKETING?
LO 13-1
• Marketing -- The activity, set of institutions and
processes for creating, communicating, delivering,
and exchanging offerings with value for customers,
clients, partners, and society at large.
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FOCUS of CONTEMPORARY
MARKETING
LO 13-1
• Marketing today involves helping the buyer buy
through:
- Websites that help buyers find the best price,
identify product features, and question sellers.
- Blogs and social networking sites that cultivate
consumer relationships.
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FOUR ERAS of U.S. MARKETING
LO 13-1
• Production Era
• Selling Era
• Marketing Concept Era
• Customer Relationship
Era
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The PRODUCTION and
SELLING ERAS
LO 13-1
• The general philosophy
was “Produce what you
can because the market
is limitless.”
• After mass production,
the focus turned from
production to persuasion.
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The MARKETING CONCEPT ERA
LO 13-1
• After WWII, a consumer spending boom
developed.
• Businesses knew they needed to be responsive
to consumers if they wanted their business.
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APPLYING the
MARKETING CONCEPT
LO 13-1
• The Marketing Concept includes three parts:
1. Customer Orientation -- Finding out what
customers want and then providing it.
2. Service Orientation -- Making sure everyone in
an organization is committed to customer
satisfaction.
3. Profit Orientation -- Focusing on the goods and
services that will earn the most profit.
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The CUSTOMER
RELATIONSHIP ERA
LO 13-1
• Customer Relationship Management (CRM) -Learning as much as you can about customers and
doing what you can to satisfy or exceed their
expectations.
• Organizations seek to enhance customer
satisfaction building long-term relationships.
• Today firms like Priceline and Travelocity use
CRM that allow customers to build a relationship
with the suppliers.
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The EMERGING
MOBILE MARKETING ERA
LO 13-1
• As digital technology continues to grow,
consumer demands are expected to rise in:
1. Now: Consumers want to interact anywhere, anytime.
2. Can I?: They want to use information in new ways
that create value for them.
3. For me: Consumers expect personalized
experiences.
4. Simply: Consumers want all interactions to be easy.
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SERVICE with a SMILE
LO 13-1
Six Steps for Keeping Your Customers Happy
• The cost of acquiring a new customer is 5x the
cost of retaining one. Here’s how to keep them:
1. Build trust
2. Emphasize the long term
3. Listen
4. Treat your customers like stars
5. Show appreciation
6. Remember employees are
customers too!
Source: Inc. Guidebook, Vol. 2 No. 5.
13-14
MAKING SUSTAINABILITY
JUST PEACHY
• Campbell Soup is one of the
100 Most Sustainable
Corporations in the World.
• They work with local farmers
in New Jersey to use peaches
unfit for purchase.
• Campbell’s manufactures
peach salsa at no cost and
donates proceeds to the Food
Bank of South Jersey.
13-15
NONPROFIT MARKETING
LO 13-1
• Nonprofit marketing tactics include:
- Fundraising
- Public Relations
- Special Campaigns
- Ecological practices
- Changing public opinions and
attitudes
- Increasing organizational
membership
13-16
MARKETING STRATEGIES for
NONPROFITS
LO 13-1
• Nonprofit marketing strategies include:
- Determine the firm’s goals and objectives
- Focus on long-term marketing
- Find a competent board of directors
- Exercise strategic planning
- Train and develop long-term volunteers
- Carefully segment the target market
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The FOUR P’s
LO 13-2
13-18
DEVELOPING a PRODUCT
LO 13-2
• Product -- A good, service, or idea that satisfies a
consumer’s want or need.
• Test Marketing -- Testing
product concepts among
potential product users.
• Brand Name -- A word,
letter, or a group of words or
letters that differentiates one
seller’s goods from a
competitor’s.
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PRICING and
PLACING a PRODUCT
LO 13-2
• Pricing products depends on many factors:
- Competitors’ prices
- Production costs
- Distribution
- High or low price strategies
• Middlemen are important in place strategies
because getting a product to consumers is
critical.
13-20
PROMOTING the PRODUCT
LO 13-2
• Promotion -- All the techniques sellers use to inform
people about their products and motivate them to
purchase those products.
• Promotion includes:
- Advertising
- Personal selling
- Public relations
- Word of mouth
Photo Courtesy of: Uri Baruchin
- Sales promotions
13-21
PERFECT PROMOTION
LO 13-2
How to Get Customers to Need Your Product
• Get customers emotional about your product:
- Make your product “built to love.”
- Use emotion-laden advertising.
• Be a likeable salesperson:
- Have confidence.
- Be intriguing.
- Show interest in others.
- Be enthusiastic and
respectful.
Sources: Entrepreneur, www.entrepreneur.com, accessed November 2014.
13-22
TANGLED WEB of PROMOTION
LO 13-2
Seven Sins of Web Design
• Too much clutter
• Too difficult to navigate
• Stale information
• Copycatting
• Ignoring the needs of your
customer base
Photo Creditf: Cortes de Cima
• Not analyzing data
• Refusing to get outside help
Source: Entrepreneur, www.entrepreneur.com, accessed November 2014.
13-23
TEST PREP
• What does it mean to “help the buyer buy?”
• What are the three parts of the marketing
concept?
• What are the Four P’s of the Marketing Mix?
13-24
SEARCHING for INFORMATION
LO 13-3
• Marketing Research -- Analyzing markets to
determine challenges and opportunities, and finding
the information needed to make good decisions.
• Research is used to identify products consumers
have used in the past and what they want in the
future.
• Research uncovers market trends and attitudes
held by company insiders and stakeholders.
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FOUR STEPS in the MARKETING
RESEARCH PROCESS
LO 13-3
1. Defining the problem or opportunity and
determining the present situation.
2. Collecting research data.
3. Analyzing the data.
4. Choosing the best solution and implementing it.
13-26
DEFINING the PROBLEM or
OPPORTUNITY
LO 13-3
• What’s the present situation?
• What are the alternatives?
• What information is needed?
• How should the information be
gathered?
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COLLECTING SECONDARY
RESEARCH DATA
LO 13-3
• Secondary Data -- Existing data that has
previously been collected by sources like the
government.
• Secondary data incurs no
expense and is usually
easily accessible.
• Secondary data doesn’t
always provide all the
needed information for
marketers.
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COLLECTING PRIMARY
RESEARCH DATA
LO 13-3
• Primary Data -- In-depth
information gathered by
marketers from their own
research.
• Telephone, online and
mail surveys, personal
interviews, and focus
groups are ways to collect
primary data.
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FOCUS GROUPS
LO 13-3
• Focus Group -- A group of people who meet under
the direction of a discussion leader to communicate
opinions.
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ANALYZING the DATA and
IMPLEMENTING the DECISION
LO 13-3
• Marketers must turn data into useful information.
• Must use their analysis to plan strategies and
make recommendations.
• Finally, marketers must evaluate their actions and
determine if further research is needed.
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KEY BENEFITS of MARKETING
RESEARCH
LO 13-3
• Analyze customer needs and satisfaction.
• Analyze current markets and opportunities.
• Analyze the effectiveness of marketing strategies.
• Analyze marketing process and tactics currently
used.
• Analyze the reasons for goal achievement or
failure.
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WAYS to FIND OUT WHAT
CONSUMERS THINK
LO 13-3
• Conduct informal consumer surveys
• Host a customer focus
group
• Listen to competitor’s
customers
• Survey your sales force
• Become a “phantom”
customer
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SCANNING the MARKETING
ENVIRONMENT
LO 13-4
• Environmental Scanning -- The process of
identifying factors that affect marketing success.
• Factors involved in the
environmental scan include:
- Global factors
- Technological factors
- Sociocultural factors
- Competitive factors
- Economic factors
13-34
TWO is BETTER THAN ONE
• China is setting aside its strict onechild policy and allowing two
children if one of the spouses is an
only child.
• Legos are far more expensive in
China and part of that is due to
distribution costs.
• By building a factory near Shanghai,
Lego hopes to take advantage of
the potential market growth and
lessen the price for families.
13-35
The MARKETING ENVIRONMENT
LO 13-4
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The ABC’s of MARKETING
LO 13-4
• Always be customer-focused.
• Benchmark against the best firms.
• Continuously improve performance.
• Develop the best value package.
• Empower your employees.
• Focus on relationship building.
• Goal achievement is the reward.
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The CONSUMER and
B2B MARKET
LO 13-4
• Consumer Market -- All the individuals or
households that want goods and services for
personal use and have the resources to buy them.
• Business-to-Business
(B2B) -- Individuals and
organizations that buy goods
and services to use in
production or to sell, rent, or
supply to others.
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TEST PREP
• What are the four steps in the marketing research
process?
• What’s environmental scanning?
• What factors are included in environmental
scanning?
13-39
MARKETING to CONSUMERS
LO 13-5
• The size and diversity of the consumer market
forces marketers to decide which groups they
want to serve.
• Market Segmentation -- Divides the total market
into groups with similar characteristics.
• Target Marketing -- Selecting which segments an
organization can serve profitably.
13-40
SEGMENTING the
CONSUMER MARKET
LO 13-5
• Geographic Segmentation -- Dividing the market
by cities, counties, states, or regions.
• Demographic Segmentation -- Dividing the
market by age, income, education, and other
demographic variables.
• Psychographic Segmentation -- Dividing the
market by group values, attitudes, and interests.
13-41
SEGMENTING the
CONSUMER MARKET
LO 13-5
• Benefit Segmentation -- Dividing the market
according to product benefits the customer prefers.
• Volume (Usage) Segmentation -- Dividing the
market by the volume of product use.
13-42
SEGMENTING the
CONSUMER MARKET
LO 13-5
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SEGMENTING the
CONSUMER MARKET
LO 13-5
13-44
MARKETING to
SMALL SEGMENTS
LO 13-5
• Niche Marketing -- Identifies small but profitable
market segments and designs or finds products for
them.
• One-to-One
Marketing-- Developing
a unique mix of goods
and services for each
individual consumer.
13-45
MASS MARKETING vs.
RELATIONSHIP MARKETING
LO 13-5
• Mass Marketing -Developing products and
promotions to please large
groups of people.
• Relationship Marketing-Rejects the idea of mass
production and focuses toward
custom-made goods and
services for customers.
13-46
KEYS to SUCCESSFUL RELATIONSHIP LO 13-5
MARKETING
• Effective relationship marketing is built on:
- Open communication
- Consistently reliable service
- Staying in contact with customers
- Trust, honesty, and ethical behavior
- Showing that you truly care
13-47
STEPS in the CONSUMER
DECISION-MAKING PROCESS
LO 13-5
1. Problem recognition
2. Search for information
3. Evaluating alternatives
4. Purchase decision
5. Postpurchase evaluation
13-48
TURNING NEGATIVES to POSITIVE
• Online product reviews have changed the
consumer decision-making process.
• But the reviews are not always valid because they
could be written about the experience instead of
the product.
• Amazon hopes to correct this issue and has
started a program in which the site’s most trusted
reviewers are sent products to write about.
13-49
KEY FACTORS in CONSUMER
DECISION-MAKING
LO 13-5
• Learning
• Reference Groups
• Culture
• Subcultures
• Cognitive Dissonance
Photo Credit: Peter Hilton
13-50
TOP MARKETING CHALLENGES
LO 13-5
• Marketing can be challenging in both the B2C and
B2B markets.
• Common issues are:
- Brand awareness
- Social media
- Converting leads into customers
- Budgeting
- Increasing profit
Source: Entrepreneur, www.entrepreneur.com, accessed November 2014.
13-51
BUSINESS-to-BUSINESS
MARKET (B2B)
LO 13-6
• B2B marketers include:
- Manufacturers
- Wholesalers and retailers
- Hospitals, schools and charities
- Government
• Products are often sold and resold several times
before reaching final consumers.
13-52
B2B MARKET DIFFERENCES
LO 13-6
13-53
TEST PREP
• Define the terms consumer market and businessto-business market.
• Name and describe five ways to segment the
consumer market.
• What is niche marketing and how does it differ
from one-to-one marketing?
• What are four key factors that make B2B markets
different from consumer markets?
13-54