Chapter 11: MARKETING

1
Chapter 11 MARKETING

• Building Profitable Connections with Your
  Customers

2
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.

3
PRODUCTS PROVIDE UTILITY IN A NUMBER OF WAYS
Think UPS or FedEx
Think Smoothie King
Satisfies wants by providing goods and services
at a convenient time
Satisfies wants by converting products into a
finished form
Satisfies wants by smoothly transferring
ownership of goods and services from seller to
buyer
Satisfies wants by providing goods and services
at a convenient place
Think ATMs
Think hassle free purchasing
4
THE SCOPE OF MARKETING ITS EVERYWHERE

• People Marketing
• Place Marketing
• Event Marketing
• Idea Marketing

5
THE EVOLUTION OF MARKETING FROM THE PRODUCT TO
THE CUSTOMER
6
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!)

7
THE CUSTOMER FRONT AND CENTER
Customer Relationship Management (CRM)

• Value
• Customer Satisfaction
• Customer Loyalty

Limited Relationships
Full Partnerships
8
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

Joes home page
9
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 its profits 85 by
  increasing its 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...

10
THE MARKETING MIX
4 P's
Promotion Strategy

• Product
• Price
• Promotion
• Place

11
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?

12
MARKET SEGMENTATION
Selecting a target market begins with dividing
your market into segments.
Marketers may select multiple segments to target.
13
CONSUMER MARKETS VS BUSINESS MARKETS

• A Well Chosen Target Market
• Size
• Profitability
• Accessibility
• Limited Competition

Consumer Markets
Business Markets
How will the buyer use the product?
Products used directly or indirectly to produce
other products.
Products for personal consumption.
Different approaches to select target markets.
14
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.

15
MARKET SEGMENTATION
CONSUMER
BUSINESS

• Geographic
• Customer-based
• Product-use based

• Demographic
• Geographic
• Psychographic
• Behavioral

Senior citizen living facilities
Pickups in southern US
Porshe, Sports Illustrated
Miller Lite
16
CUSTOMER BEHAVIOR DECISIONS, DECISIONS, DECISIONS
CONSUMER DECISION MAKING PROCESS
17
INFLUENCE IN DECISION MAKING
18
BUSINESS BUYER BEHAVIOR

• Rationale Criteria
• Specific Purchase Criteria
• Objective Standards
• Input from Multiple Internal Sources
• Formal Process
• Frequently Seek Customized Goods

19
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

20
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

21
CONDUCTING MARKET RESEARCH

1. Define the problem
2. Access available information
3. Gather additional information
4. Review internal records interview employees
5. Collect outside data
6. Organize and interpret data
7. Make a decision and take action
8. Assess the results of the action

22
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?

23
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

24
MARKETING RESEARCH DATA

• More Expensive
• Customized
• Fresh, New
• Proprietary

• Already published material
• Trade associations

• Direct mail
• Questionnaires
• Telephone or street surveys
• Focus Groups
• Test marketing

25
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 Im doing?
• What current activities should be increased?
• What current activities should be decreased or
  dropped?

26
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

27
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 ?

28
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

29
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

30
Marketing To Your Foundation Simulation Customers
31
Customers
32
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?

33
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?

34
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.

35
Sales Forecast

• Assess how the total market will perform
• What is the overall economic climate ?
• Assess your performance and market share
• 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 ?