Chapter 11

1
Chapter 11 Understanding the Customer and
Creating Goods and Services that Satisfy
2
Chapter 11 Learning Goals

• What are the marketing concept and relationship
  building?
• How do managers create a marketing strategy?
• What is the marketing mix?
• How do consumers and organizations make buying
  decisions?

3
Chapter 11 Learning Goals (contd.)

• What are the five basic forms of market
  segmentation?
• How is marketing research used in marketing
  decision making?
• What are the trends in understanding the
  consumer?

4
Marketing

• Creating exchanges by using the right principle
• Marketing Concept
• Focus on customer wants
• Act in order to satisfy customer wants
• Achieve goals by satisfying customer wants
• Commitment to
• Customer value
• Customer satisfaction
• Building relationships

5
John Deeres Customer Orientation

• Understand needs of the agricultural farmer
  customer
• Provide good products that rarely fail
• Quickly repair any problem equipment
• Develop products based on what farmers want
• Extend credit to farmers if needed build trust
  and loyalty
• Provide information that increases customer value
  

Source Neff Citrin, Lessons from the Top,
1999, p. 47-53.
6
Creating a Marketing Strategy

• How is a marketing strategy created?
• Understanding the external environment
• Defining the target market
• Creating a competitive advantage
• Developing a marketing mix

7
Understanding the External Environment

• Environmental Scanning
• Environmental data that shape decision making
• Social forces
• Demographic forces
• Economic forces
• Technological forces
• Political legal forces
• Competitive forces

8
Defining the Target Market

• The specific consumers a company directs its
  marketing toward
• Focuses efforts to those most likely to buy the
  product or service

9
Creating a Competitive Advantage

• Unique features that consumers perceive as better
  than the competition
• Types of competitive advantage
• Cost competitive advantage
• Differential competitive advantage
• Niche competitive advantage

10
Developing a Marketing Mix

• The four Ps
• Product
• Price
• Promotion
• Place
• Each target market has an unique marketing mix

11
Product Strategy

• Deciding what the company is going to market
• Good and/or Service
• Brand name
• Packaging
• Color
• Accessories
• Warranty
• Service program
• Consumers buy products for what they do as well
  as what they mean

12
Pricing Strategy

• How much will the company charge for the product?
• Based on demand for product and the cost to
  produce it
• Other considerations also influence price
• Introductory price
• Enter low and stay low
• Enter high and lower over time

13
Distribution Strategy

• How will the product flow from producer to
  consumer?
• How many stores will sell it?
• Which wholesalers retailers will sell it?
• In what geographic area will the product be sold?

14
Promotion Strategy

• How will consumers find out about the product?
• Personal selling
• Advertising
• Public relations
• Sales promotion
• A good promotion strategy can greatly increase
  sales

15
360 Branding

• 360 branding making a strong brand impact on
  the customer every time contact is made
• Opportunities for 360 branding
• showrooms, advertisements, web pages, retail
  locations, packaging, customer service
• Ogilvy Mather advertising agency applies 360
  branding to its clients

Source Neff Citrin, Lessons from the Top,
1999, p. 221-227.
16
Not for Profit Marketing

• Same concepts apply
• Social Marketing
• Goals Effect social change, further social
  causes, evaluate the relationship between
  marketing society

17
Buyer Behavior

• Must understand how consumers make buying
  decisions
• Allows marketers to create a more effective
  marketing mix

18
Buyer BehaviorConsumer Decision-Making
1. Sense stimulus
2. Recognize problem
3. Search for information
Individual Social factors
Memory
4. Evaluate alternatives
5. Purchase product
6. Evaluate outcome
7. Post-purchase behavior
19
Factors that influence consumer decision making

• Individual factors
• Within and unique to the consumer
• Perception, beliefs, attitudes, values, learning,
  self-concept, personality
• Social Factors
• Interaction of consumer and external environment
• Family, opinion leaders, social class, culture

20
Business to Business Purchases

• Businesses buy goods for different purposes and
  reasons
• Characteristics
• Higher purchase volumes
• Fewer buyers
• More concentrated location of buyers
• Direct distribution
• Rational purchase decisions

21
Examples of Business-to-Business Advertisers

• 1. ATT Corp.
• 2. IBM Corp.
• 3. Microsoft Corp.
• 4. Compaq Computer Corp.
• 5. MCI Communications Corp.
• 6. Hewlett-Packard Co.
• 7. Sprint Corp.
• 8. American Express Co.
• 9. Canon
• 10. 3Com Corp.

Source Business Marketing,www.businessmarketing.
com
22
Market Segmentation

• Type General characteristics
• Demographic age, education, gender, income, race,
  family, size
• Geographic regional location (i.e., midwest),
  population density, city/county size, climate
• Psychographic lifestyle, personality, interests,
  values, attitudes
• Benefit benefits provided by the good or service
• Volume amount of use (light to heavy)

23
Marketing Research

• The Marketing Research Process
• Define the marketing problem
• Chose a method of research
• Survey, observations, experiment
• Collect the data
• Primary, secondary
• Analyze the data
• Make recommendations

24
Trends in Marketing

• New Technology
• Advanced Observation Research Methods
• Decision Support Systems
• Database Marketing--micromarketing
• A customized individualized message can be sent
  to each consumer through direct mail at the same
  time

25

• Review
• The Marketing Concept
• Marketing Strategy
• Marketing Mix
• The 4 Ps
• Buyer Behavior
• Market Segmentation
• Marketing Research
• Trends
• Looking Ahead
• Developing the Marketing Mix