0
**   Evolution of Marketing*     • Production Era - Up to early 1900s     • Selling Era - 1920s-1950s     • Marketing Conc...
*               I. WHAT IS MARKETING?*                     Learning goal 1*   Define marketing and explain how the marketi...
*    Describe the marketing research process, and explain*     how marketers use environmental scanning to learn*         ...
**        Marketing Process*    1. Find Opportunity   6. Brand Name, Design    2. Conduct Research      & Price    3. Iden...
*                III.THE CONSUMER MARKET*                        Learning goal 4*   Explain how marketers meet the needs o...
***    IV.   THE BUSINESS-TO-BUSINESS MARKET                   Learning goal 5    List ways in which the business-to-busin...
*                WHAT IS MARKETING?*                     Learning goal 1*     Define marketing and explain how the marketi...
*        THE EVOLUTION OF THE FIELD OF MARKETING*                    THE PRODUCTION ERA*    Until the early 1900s, the gen...
*                  THE MARKETING ERA**     The BABY BOOM after WWII created a tremendous             demand for goods and ...
**           The Marketing*            Environment                     Economic    Competitive                   Technolog...
*               The MARKETING CONCEPT*            is a three-part business philosophy:*     A CUSTOMER ORIENTATION: Find o...
*           THE CUSTOMER RELATIONSHIP ERA*      CUSTOMER RELATIONSHIP MANAGEMENT (CRM)*    is the process of learning as m...
*                    THE MARKETING MIX*                       Learning goal 2*         List and describe the four Ps of ma...
**   Elements in the Marketing*              Mix      Product                Plac                             e           ...
*         These four factors have become known as the*                         MARKETING MIX*         the ingredients that...
*         DESIGNING A PRODUCT TO MEET NEEDS*     First, develop a product to fill the identified need.*                   ...
**       Product Design*    • Concept Test    • Test Market    • Package Design/Brand Name                                ...
*                            A BRAND NAME*   is a word, letter, or group of words or letters that differentiates*     one ...
*        GETTING THE PRODUCT TO THE RIGHT PLACE*                     (the third “P”)*    Once the product is manufactured,...
*                 PROMOTION* consists of all the techniques sellers use to* motivate people to buy products or services.  ...
**   Marketing is an ONGOING PROCESS; companies*    must continually adapt to changes in the market.       Listening to cu...
*                      MARKETING RESEARCH*      is the analysis of markets to determine opportunities and*   challenges, a...
*               THE MARKETING RESEARCH PROCESS**                             STEP 1.      Defining the problem and determi...
*          Less expensive is SECONDARY DATA,*        information that has already been published*     previously by others...
**      Sources for Marketing*      Research Information    Secondary Data       Primary Data    • Government         • Su...
*                      A FOCUS GROUP*     is of a small group of people who meet under the*   direction of a discussion le...
*                          STEP 4.*        Choosing the best solution and implement it*     Researchers determine ALTERNAT...
**       Market Research*           Process    • Define the Question    • Collect Data    • Analyze the data    • Choose t...
*                        GLOBAL FACTORS*   The most important global change today is the growth of the                    ...
*                        COMPETITIVE FACTORS*    Brick-and-mortar companies must adjust to new competition from           ...
*       TWO DIFFERENT MARKETS: CONSUMER AND*               BUSINESS-TO-BUSINESS (B2B)*            THERE ARE TWO MAJOR MARK...
**     Business-to-Business*                 (B2B)    1. Number    2. Size    3. Geographic       Concentration    4. Rati...
*                 THE CONSUMER MARKET*   Consumer groups differ greatly in age, education level,*                       in...
*           SEGMENTING THE CONSUMER MARKET*                           Learning goal 4*   Explain how marketers meet the ne...
**   Market Segmentation*    • Target Marketing      • Geographic      • Demographic      • Psychographic      • Benefit  ...
*             VOLUME, OR USAGE, SEGMENTATION is*         dividing the market by usage (volume of use.)*       The best seg...
**     Different Markets*    • Consumer     • Niche     • One-to-One    • Business-to-      Business (B2B)                ...
*        MOVING TOWARD RELATIONSHIP MARKETING*     MASS MARKETING means developing products and*         promotions to ple...
**                              Pricing Strategies*           • Cost-Plus                    • Skimming           • Value-...
**       Influences on*     Consumer Behavior                     Culture                                   Reference    L...
*                   SOCIOCULTURAL INFLUENCES*                such as reference groups and culture*       Consumer behavior...
*                            SUBCULTURE*   is the set of values, attitudes, and ways of doing things that*     results fro...
*    The latest in TECHNOLOGY enables sellers to work with*     buyers to determine their individual wants and needs*     ...
*               PURCHASE DECISION PROCESS:**                    Problem recognition                      Information searc...
**               Several factors make          BUSINESS-TO-BUSINESS MARKETING*                     DIFFERENT NUMBER:    Th...
*           GEOGRAPHICALLY CONCENTRATED:*   B2B markets tend to be CONCENTRATED in certain areas of*                      ...
**   Marketing Strategies in*   Non-Profit Organizations    • Find a productive    • Practice strategic      board of trus...
**                                      Where They Got*                                       Their Names                 ...
**                     Other Things To Keep*                       In Mind With Price           • Payment Period          ...
**                                         Place Decisions*              •       Direct Sales              •       Reselle...
**                     Advertising Mascots*                   •      Meow Mix Cat – 35 years                   •      Tony...
**                               Marketing     Data:*                              Least Error    Method           1. Put ...
**                                  Why Should You*                                 Market To Women?           • Women con...
**           Consumer Decision*    Marketing mix     Marketing mix                   Making Sociocultural                 ...
**                                                   Planning For*                                                   More ...
*                    Business-to-Consumer*                     E-Commerce as % of*                            Sales       ...
**            Top Marketing Tactics of*               Small Businesses                 70.0%                 60.0%        ...
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Chapter 13

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  • See Learning Goal 1: Define marketing and explain how the marketing concept applies in both for-profit and non-profit organizations See text pages: 350-351
  • See Learning Goal 1: Define marketing and explain how the marketing concept applies in both for-profit and non-profit organizations See text pages: 350-351
  • See Learning Goal 1: Define marketing and explain how the marketing concept applies in both for-profit and non-profit organizations See text pages: 350-351
  • See Learning Goal 3: Describe the marketing research process, and explain how marketers use environmental scanning to learn about the changing marketing environment. See text page: 354
  • See Learning Goal 1: Define marketing and explain how the marketing concept applies in both for-profit and non-profit organizations See text pages: 350-351
  • See Learning Goal 1: Define marketing and explain how the marketing concept applies in both for-profit and non-profit organizations See text pages: 350-351
  • See Learning Goal 1: Define marketing and explain how the marketing concept applies in both for-profit and non-profit organizations See text pages: 350-351
  • See Learning Goal 1: Define marketing and explain how the marketing concept applies in both for-profit and non-profit organizations See text pages: 350-351
  • Also available on a Transparency Acetate See Learning Goal 3: Describe the marketing research process, and explain how marketers use environmental scanning to learn about the changing marketing environment. See text pages: 358-361 Marketing Environment This slide helps to explain the environment under which the marketing manager must operate. Students need to know that marketing is a complex, dynamic environment that is constantly changing. It’s important to note to the class that the environment of marketing is changing faster than at any time in history. Companies that don’t keep up, fail to survive. Today’s marketing environment is influenced by the global marketplace and the explosion of the information age. To be fully prepared, a company must recognize and understand: cultural influences governmental and political influences demographic and lifestyle trends local, national, and world economic trends the strengths of multi-national competitors the influence of technology on physical distribution
  • Also available on a Transparency Acetate See Learning Goal 2: List and describe the four P’s of marketing. See text page: 352 Elements of the Marketing Mix The critical elements in each of the four Ps of the marketing mix are identified here. This slide is very helpful in illustrating the depth and breadth of the marketing mix. Discuss with the students the importance of creating a difference with your product(s) using value features that are unique, and will distinguish your offerings from your competitors. This slide illustrates the responsibility of the marketing manager to build the four Ps into an integrated marketing program that effectively communicates to the public. Discuss each element separately with the class; ask the students to identify ways they can create value with each of the four Ps?
  • See Learning Goal 2: List and describe the four P’s of marketing. See text pages: 354-355
  • See Learning Goal 3: Describe the marketing research process, and explain how marketers use environmental scanning to learn about the changing marketing environment. See text pages: 357-358
  • See Learning Goal 3: Describe the marketing research process, and explain how marketers use environmental scanning to learn about the changing marketing environment. See text pages: 356-358
  • See Learning Goal 5: List ways in which the business-to-business market differs from the consumer market. See text pages: 368
  • See Learning Goal 4: Explain how marketers meet the needs of the consumer market through market segmentation, relationship marketing, and the study of consumer behavior. See text pages: 363-364
  • See Learning Goal 4: Explain how marketers meet the needs of the consumer market through market segmentation, relationship marketing, and the study of consumer behavior. See text pages: 361
  • Also available on a Transparency Acetate See Learning Goal 2: List and describe the four P’s of marketing. Pricing Strategies This slide presents eight different pricing strategies. Ask the students – if they owned a business, such as a coffee house or a retail store, how would they price their products? How often have they seen a price for a product like $2.95 or $2.99 instead of $3.00? Why would businesses offer such prices? (It is more psychological pricing than anything else. It looks like a better price than the next whole number.)
  • See Learning Goal 4: Explain how marketers meet the needs of the consumer market through market segmentation, relationship marketing, and the study of consumer behavior. See text pages: 366-367
  • Also available on a Transparency Acetate See Learning Goal 1: Define marketing and explain how the marketing concept applies in both for-profit and non-profit organizations. Marketing Strategies in Non-Profit Organizations This slide identifies many ideas for developing a successful marketing strategy for non-profit organizations. Regardless of the type or size of your organization you will need marketing strategies and techniques to maximize your effectiveness. Nonprofits may consider the following marketing tactics as a part of their marketing program: newspaper inserts cross promotions packaging promotion Corporate newsletters Public relations will play an important role with recognition and support for building strong community goodwill. Based on the following statistics, nonprofit organizations are very successful: During the past 10 years the number of reporting “public charities” grew by 6.3 percent annually. The nonprofit sector includes more than 1 million organizations that spend nearly $500 billion each year – more than the GDP of Brazil, Russia or Australia. Approximately 6 percent of all organizations in the United States are nonprofits, and one in every 15 works for a nonprofit.
  • Also available on a Transparency Acetate See Learning Goal 2: List and describe the four P’s of marketing. Where They Got Their Names This acetate gives the students information on the names of well-known companies. The class should see the relationship of founder’s names and the name of the companies. The practice of naming companies after their founders has changed. The trend for naming companies seeking identity in a post dot-com economy has changed to: less flash; deeper meaning. Share with the class some suggestions from branding consultants on developing company names: Avoid combining parts of words with no meaning on their own (Alliant to Vivient). Refrain from using overly literal terminology (Pets.com, Drugstore.com) there is little or no branding value with this strategy. Companies need to instill warmth and humanity with their names to instill trust and brand recognition.
  • Also available on a Transparency Acetate See Learning Goal 2: List and describe the four P’s of marketing. Other Things To Keep In Mind With Price This slide identifies other items that affect the pricing decision. Ask the students what would happen if these factors are not considered in pricing decision? (Overall profitability will likely be lower or some stakeholders would be upset and that may affect the business negatively.) Ask the students – Have they experienced any of these types of items in dealing with businesses? How about any other items?
  • See Learning Goal 2: List and describe the four P’s of marketing. Place Decisions This slide identifies the distribution decisions. Any business would want to decide whether they are going to sell directly to the customers (Dell Computers model) or through an intermediary (Hewlett-Packard model). Next decision deals with whether the market coverage will be intensive (as many outlets as possible), selective (few outlets), or exclusive (single reseller). Other distribution decisions that businesses should consider are inventory and logistics.
  • See Learning Goal 2: List and describe the four P’s of marketing. Advertising Mascots This slide presents some of the well-known mascots that have appeared in advertising for products. Some of the longest running mascots are MGM lion (78 years) and Tony the Tiger (54 years). Ask the students – Do they recognize these mascots? How do they help organizations? (Help build a brand image.) What are some of the other famous mascots do they remember? (Some other examples are: Mr. Peanut, Aflac Duck, and GEICO’s Gecko.)
  • Also available on a Transparency Acetate See Learning Goal 3: Describe the marketing research process, and explain how marketers use environmental scanning to learn about the changing marketing environment. Marketing Data: Least Error Method This slide presents the five steps for getting the least error on marketing data. It all starts with making it someone’s responsibility and using both low tech and high tech methods for collecting the data. The focus should be on colleting the right data, not as much as you can get. Finally, keep the data in one place and do something with it useful. Source: cmomagazine.com, September 2004
  • Also available on a Transparency Acetate See Learning Goal 4: Explain how marketers meet the needs of the consumer market through market segmentation, relationship marketing, and the study of consumer behavior. Why Should You Market To Women? This slide presents some interesting statistics on women. Before showing this slide, you can ask the students to take an educated guess on some of these percentages to see how close or away they are from the real numbers. Looking at these numbers, it is clear that the economic trend in the U.S. suggest that women are becoming the financial decision makers. How should the businesses respond? (Certainly, women should be targeted in marketing and differently.)
  • See Learning Goal 4: Explain how marketers meet the needs of the consumer market through market segmentation, relationship marketing, and the study of consumer behavior. See text page: 367
  • Also available on a Transparency Acetate See Learning Goal 4: Explain how marketers meet the needs of the consumer market through market segmentation, relationship marketing, and the study of consumer behavior. Planning For More Business This slide presents the five key questions in developing a marketing plan for generating more business. David Wood, a marketing consultant argues that 7-9 contacts with customers per year are necessary to maintain the relationship. More reminders customers have about you, the more they are likely to buy. Once you have identified your strengths and weaknesses, what you really sell and to whom, and have reviewed your communication to the target market, you need to ensure that the message resonate with them positively. You can do that by engaging in savvy public relations (newsletters, press releases, etc.). Source: Investor’s Business Daily, February 9, 2004
  • Also available on a Transparency Acetate See Learning Goal 5: List ways in which the business-to-business market differs from the consumer market. Business-to-Consumer E-Commerce As % of Sales This slide presents the growth of e-commerce in the United States as a percent of total sales. E-commerce sales (B-to-C) in the U.S. was about $25 billion in the first quarter of 2006. This represented a decline of 9.4% from the fourth quarter of 2005. In 2005, e-commerce represented 2.37% of total sales. Ask the students – how many of them have bought things online? From where? (All of them represent B-to-C transactions.) (Source: U.S. Census, May 18, 2006; http://home.earthlink.net/~lindberg_b/GECGrwth.htm, accessed August 5, 2006)
  • Also available on a Transparency Acetate See Learning Goal 5: List ways in which the business-to-business market differs from the consumer market. Top Marketing Tactics of Small Businesses This slide presents the top marketing tactics for small businesses. Number 1 on the list is the Web site for a small business (close to 70%). Almost two-thirds of the businesses said that web-based business forms and newsletters were important. Other marketing tactics were: community relations, PR activities, e-mail marketing and direct mail. (Source: Investor’s Business Daily, June 1, 2004)
  • Transcript of "Chapter 13"

    1. 1. ** Evolution of Marketing* • Production Era - Up to early 1900s • Selling Era - 1920s-1950s • Marketing Concept Era - 1950s - 1980s • Customer • Service • Profit • Customer Relationship Era - 1990s+ 13-1
    2. 2. * I. WHAT IS MARKETING?* Learning goal 1* Define marketing and explain how the marketing concept applies in both for-profit and nonprofit organizations. The Evolution of the Field of Marketing The Production Era The Selling Era The Marketing Concept Era The Customer Relationship Era Nonprofit Organizations and Marketing 13-2
    3. 3. * Describe the marketing research process, and explain* how marketers use environmental scanning to learn* about the changing marketing environment. The Marketing Research Process The Marketing Environment Global Factors Technological Factors Sociocultural Factors Competitive Factors Economic Factors Two Different Markets: Consumer and Business-to-Business (B2B) 13-3
    4. 4. ** Marketing Process* 1. Find Opportunity 6. Brand Name, Design 2. Conduct Research & Price 3. Identify Target 7. Develop Distribution Market System 4. Design Product 8. Design Promotional 5. Product Testing Program 9. Build Relationship With Customer 13-4
    5. 5. * III.THE CONSUMER MARKET* Learning goal 4* Explain how marketers meet the needs of the consumer market through market segmentation, relationship marketing, and the study of consumer behavior. Segmenting the Consumer Market Reaching Smaller Market Segments Moving toward Relationship Marketing Forming Communities of Buyers The Consumer Decision-Making Process 13-5
    6. 6. *** IV. THE BUSINESS-TO-BUSINESS MARKET Learning goal 5 List ways in which the business-to-business market differs from the consumer market. 13-6
    7. 7. * WHAT IS MARKETING?* Learning goal 1* Define marketing and explain how the marketing concept drives both for-profit and nonprofit organizations. MARKETING is the process of planning and executing the conception, pricing, promotion, and distribution of goods and services to facilitate exchanges that satisfy individual and organizational objectives. Selling and advertising are only part of marketing. Marketing activities depend on what needs to be done to fill customers’ needs. 13-7
    8. 8. * THE EVOLUTION OF THE FIELD OF MARKETING* THE PRODUCTION ERA* Until the early 1900s, the general philosophy was to “produce as much as you can because there is a limitless market.” The goals of business CENTERED ON PRODUCTION. The greatest marketing need was for distribution and storage. THE SELLING ERA By the 1920s, the business philosophy turned to an EMPHASIS ON SELLING AND ADVERTISING to sell existing products. 13-8
    9. 9. * THE MARKETING ERA** The BABY BOOM after WWII created a tremendous demand for goods and services. Competition for the consumer’s dollar was fierce. If they wanted to get their business, businesses had to be RESPONSIVE TO CONSUMERS. The MARKETING CONCEPT emerged in the 1950s. 13-9
    10. 10. ** The Marketing* Environment Economic Competitive Technolog y Customer Social Global 13-10
    11. 11. * The MARKETING CONCEPT* is a three-part business philosophy:* A CUSTOMER ORIENTATION: Find out what consumers want and provide it. A SERVICE ORIENTATION: Make sure everyone in the organization has the same objective–CUSTOMER SATISFACTION. A PROFIT ORIENTATION: Focus on those goods and services that will earn the most profit. During the 1980s, business began to apply the marketing concept more aggressively. 13-11
    12. 12. * THE CUSTOMER RELATIONSHIP ERA* CUSTOMER RELATIONSHIP MANAGEMENT (CRM)* is the process of learning as much as possible about custo-mers and doing everything you can to satisfy them–or even exceed their expectations–with goods and services over time. The goal is to enhance customer satisfaction and stimulate long-term customer loyalty. NONPROFIT ORGANIZATIONS AND MARKETING Marketing is a crucial part of almost all organizations, profit and nonprofit. Charities, churches, politicians, states, and many other organizations all use marketing. 13-12
    13. 13. * THE MARKETING MIX* Learning goal 2* List and describe the four Ps of marketing. Pleasing customers has become a priority. The FOUR FACTORS OF MARKETING are: Product Price Place Promotion CONTROLLABLE PARTS of the marketing process involve: Designing a want-satisfying PRODUCT Setting a PRICE for the product Placing the product in a PLACE where people will buy it PROMOTING the product 13-13
    14. 14. ** Elements in the Marketing* Mix Product Plac e Marketing Program Buy at Computers ‘R Us Pric Promotion 13-14
    15. 15. * These four factors have become known as the* MARKETING MIX* the ingredients that go into a marketing program: product, price, place, and promotion. APPLYING THE MARKETING PROCESS To present an overview of the marketing process, the text takes a hypothetical vegetarian restaur-ant through THE MARKETING PROCESS. The process involves: Recognizing a need researching the market Identifying the TARGET MARKET The text uses the example of a start-up vegetarian restaurant, Very Vegetarian. 13-15
    16. 16. * DESIGNING A PRODUCT TO MEET NEEDS* First, develop a product to fill the identified need.* A PRODUCT is any physical good, service, or idea that satisfies a want or need plus anything that would enhance the product in the eye of consumers, such as the brand. The next step is CONCEPT TESTING developing an accurate description of your product and asking people whether or not the concept (the idea of the cereal) appeals to them. TEST MARKETING is the process of testing products among potential users. Next, decide which brand names should be offered to attract customers. 13-16
    17. 17. ** Product Design* • Concept Test • Test Market • Package Design/Brand Name 13-17
    18. 18. * A BRAND NAME* is a word, letter, or group of words or letters that differentiates* one seller’s goods and services from those of competitors. These steps create THE FIRST “P”—PRODUCT. SETTING AN APPROPRIATE PRICE (the second “P”) The price depends on a number of factors, such as the price of competing restaurants. You also have to consider the costs of pro-ducing, distributing, and promoting the product. 13-18
    19. 19. * GETTING THE PRODUCT TO THE RIGHT PLACE* (the third “P”)* Once the product is manufactured, you have to decide how to get it to the consumer. You may want to sell your product through INTERMEDIARIES, (MARKETING MIDDLEMEN,) organizations that specialize in distributing goods from producer to customer. DEVELOPING AN EFFECTIVE PROMOTIONAL STRATEGY (the fourth “P”) 13-19
    20. 20. * PROMOTION* consists of all the techniques sellers use to* motivate people to buy products or services. RELATIONSHIP BUILDING WITH CUSTOMERS includes responding to any suggestions they may make to improve the product or the marketing of the product. 13-20
    21. 21. ** Marketing is an ONGOING PROCESS; companies* must continually adapt to changes in the market. Listening to customers is the key to marketing. PROVIDING MARKETERS WITH INFORMATION Learning goal 3 Describe the marketing research process, and explain how marketers use environmental scanning to learn about the changing marketing environment . 13-21
    22. 22. * MARKETING RESEARCH* is the analysis of markets to determine opportunities and* challenges, and to find the information needed to make good decisions. One goal is to determine exactly what consumers want and need, now and in the future. Businesses need information to compete effectively, and MARKETING RESEARCH is the activity that gathers that information. In addition to customers, marketers should pay attention to the views of employees, shareholders, consumer advocates, and other stakeholders. 13-22
    23. 23. * THE MARKETING RESEARCH PROCESS** STEP 1. Defining the problem and determining the present situation STEP 2. Collecting data Research can be quite expensive, so SOME TRADE-OFF must be made between information needed and the cost. 13-23
    24. 24. * Less expensive is SECONDARY DATA,* information that has already been published* previously by others and published in journals and books or made available online. Often, secondary data don’t provide all the necessary information, so marketers must do their own research. The result of new studies is PRIMARY DATA, data that you gather yourself (not from secondary sources such as books and magazines.) Despite its name, secondary data should be gathered first as it is the least expensive. Telephone surveys, online surveys, mail surveys, and personal interviews are the most common methods of gathering survey information. 13-24
    25. 25. ** Sources for Marketing* Research Information Secondary Data Primary Data • Government • Surveys Publications • Focus groups • Commercial • Interviews Publications • Observation • Magazines • Online surveys • Newspapers • Questionnaires • Internal/General • Customer comments Sources 13-25
    26. 26. * A FOCUS GROUP* is of a small group of people who meet under the* direction of a discussion leader to communicate their opinions about an organization, its product, or other given issues. Marketers can now gather both secondary and primary data online. STEP 3. Analyzing the research data The data collected must be turned into useful information. Careful, honest interpretation of the data can reveal specific marketing challenges. 13-26
    27. 27. * STEP 4.* Choosing the best solution and implement it* Researchers determine ALTERNATIVE STRATEGIES and make recommendations as to which strategy may be best. The actions taken should be FOLLOWED UP to see if results were as expected. Consumers are demanding more ethical behavior from companies. THE MARKETING ENVIRONMENT ENVIRONMENTAL SCANNING is the process of identifying the factors that can affect marketing success 13-27
    28. 28. ** Market Research* Process • Define the Question • Collect Data • Analyze the data • Choose the best solution and implement 13-28
    29. 29. * GLOBAL FACTORS* The most important global change today is the growth of the Internet.* Globalization has also put pressure on companies that deliver products. TECHNOLOGICAL FACTORS include the Internet, the growth of consumer databases, flexible manufacturing, and mass customization. SOCIOCULTURAL FACTORS include population growth and changing demographics, such as the aging population and the preferences of various ethnic groups. 13-29
    30. 30. * COMPETITIVE FACTORS* Brick-and-mortar companies must adjust to new competition from the Internet.* They have to adapt to competitors, who can deliver products quickly or provide excellent service. ECONOMIC FACTORS Marketers must pay close attention to the economic environment in the U.S. and globally. 13-30
    31. 31. * TWO DIFFERENT MARKETS: CONSUMER AND* BUSINESS-TO-BUSINESS (B2B)* THERE ARE TWO MAJOR MARKETS: The CONSUMER MARKET consists of all the individuals or households that want goods and services for personal consumption or use. The BUSINESS-TO-BUSINESS (B2B) MARKET consists of all the individuals and organizations that want goods and services to use in producing other goods and services or to sell, rent, or supply goods to others (traditionally called INDUSTRIAL GOODS.) The buyer’s REASON FOR BUYING and the END USE of the product determine whether it is considered a consumer product or a B2B product. 13-31
    32. 32. ** Business-to-Business* (B2B) 1. Number 2. Size 3. Geographic Concentration 4. Rational 5. Direct Sales 6. Personal Selling 13-32
    33. 33. * THE CONSUMER MARKET* Consumer groups differ greatly in age, education level,* income, and taste. Marketers must first decide which group to serve and then develop products and services specially tailored to their needs (as Campbell Soup Company does.) MARKET SEGMENTATION is the process of dividing the total market into groups whose members have similar characteristics. TARGET MARKETING is marketing directly toward those groups (market segments) an organization decides it can serve profitably. 13-33
    34. 34. * SEGMENTING THE CONSUMER MARKET* Learning goal 4* Explain how marketers meet the needs of the consumer market through market segmentation, relationship marketing, and the study of consumer behavior. GEOGRAPHIC SEGMENTATION is dividing the market by geographic area. DEMOGRAPHIC SEGMENTATION is dividing the market by age, income, and education level. PSYCHOGRAPHIC SEGMENTATION is dividing the market using the group’s values, attitudes, and interests. BENEFIT SEGMENTATION is dividing the market by determining which benefits of the product to talk about. 13-34
    35. 35. ** Market Segmentation* • Target Marketing • Geographic • Demographic • Psychographic • Benefit • Volume 13-35
    36. 36. * VOLUME, OR USAGE, SEGMENTATION is* dividing the market by usage (volume of use.)* The best segmentation strategy is to USE ALL THE VARIABLES to come up with a consumer profile that’s sizable, reachable, and profitable. REACHING SMALLER MARKET SEGMENTS NICHE MARKETING is the process of finding small but profitable market segments and designing custom-made products for them. ONE-TO-ONE MARKETING means developing a unique mix of goods and services for each individual customer. This is easier to do one-to-one marketing in B2B markets, but is becoming possible in consumer markets as well. 13-36
    37. 37. ** Different Markets* • Consumer • Niche • One-to-One • Business-to- Business (B2B) 13-37
    38. 38. * MOVING TOWARD RELATIONSHIP MARKETING* MASS MARKETING means developing products and* promotions to please large groups of people. The mass marketer tries to sell products to as many people as possible. That means using mass media, such as TV, radio, and newspapers. RELATIONSHIP MARKETING is a marketing strategy with the goal of keeping individual customers over time by offering them products that exactly meet their requirements. RELATIONSHIP MARKETING moves away from mass production toward CUSTOM-MADE GOODS. 13-38
    39. 39. ** Pricing Strategies* • Cost-Plus • Skimming • Value-Based • Discount • Competitive • Loss-Leader • Going-Rate • Psychological Source: Perdue University, May 2005 13-39
    40. 40. ** Influences on* Consumer Behavior Culture Reference Learning Group Customer Cognitive Subculture Dissonance 13-40
    41. 41. * SOCIOCULTURAL INFLUENCES* such as reference groups and culture* Consumer behavior is also influenced by other factors: LEARNING involves changes in an individual’s behavior resulting from previous experiences and information. A REFERENCE GROUP is the group that an individual uses as a reference point in formation of his or her beliefs, attitudes, values, or behavior. CULTURE is the set of values, attitudes, and ways of doing things that are transmitted from one generation to another in a given society. . 13-41
    42. 42. * SUBCULTURE* is the set of values, attitudes, and ways of doing things that* results from belonging to a certain group with which one closely identifies. COGNITIVE DISSONANCE is the type of psychological conflict that can occur after a purchase—such as doubts about whether they got the best product at the best price. 13-42
    43. 43. * The latest in TECHNOLOGY enables sellers to work with* buyers to determine their individual wants and needs* and to develop goods and services specifically designed for those individuals. One-way messages in mass media are replaced by a personal dialogue among participants. The text uses two examples: service firms such as airlines, rental car companies, and hotels; and the Hard Rock Café. THE CONSUMER DECISION-MAKING PROCESS Studying consumer behavior centers on studying the CONSUMER 13-43
    44. 44. * PURCHASE DECISION PROCESS:** Problem recognition Information search Evaluate alternatives Make purchase decision Postpurchase evaluation Consumer behavior researchers also study the various INFLUENCES THAT IMPACT CONSUMER BEHAVIOR. MARKETING MIX VARIABLES (the four Ps) PSYCHOLOGICAL INFLUENCES such as perception and attitudes SITUATIONAL INFLUENCES such as the type of purchase and physical surroundings 13-44
    45. 45. ** Several factors make BUSINESS-TO-BUSINESS MARKETING* DIFFERENT NUMBER: There are relatively FEW CUSTOMERS compared to the consumer market. SIZE Though few in number, industrial customers are relatively VERY LARGE. 13-45
    46. 46. * GEOGRAPHICALLY CONCENTRATED:* B2B markets tend to be CONCENTRATED in certain areas of* the country. RATIONAL Business buyers are generally MORE RATIONAL in their purchase decisions. DIRECT B2B sales tend to be DIRECT. PERSONAL SELLING There is much more emphasis in personal selling than in the consumer market. YOUR PROSPECTS IN MARKETING There is a wider variety of careers in marketing than in most business areas. 13-46
    47. 47. ** Marketing Strategies in* Non-Profit Organizations • Find a productive • Practice strategic board of trustees planning (Directors) • Carefully segment • Make marketing target market the focus; not short-term sales • Train & develop volunteers for • Know your long-term mission and review mission • Be frugal- know strategy regularly how to manage finances 13-47
    48. 48. ** Where They Got* Their Names Founder(s) • Taco Bell Glen Bell • Days Inn Cecil Day • Bose Corp Amar Bose • Ty Inc. Ty Warner • Bristol-Myers William Bristol & John Myers Source: World Features Syndicate 13-48
    49. 49. ** Other Things To Keep* In Mind With Price • Payment Period • Price Differences • Allowances • Target Customers • Regular • Geographic Areas • Seasonal • Volume Discounts • Bundling and Wholesale • Trade Discounts Pricing • • Cash and Early Pmt Price Flexibility Discount • Credit Terms Source: Perdue University, May 2005 13-49
    50. 50. ** Place Decisions* • Direct Sales • Reseller Sales • Market Coverage • Intensive • Selective • Exclusive • Inventory Size • Logistics Source: Perdue University, May 2005 13-50
    51. 51. ** Advertising Mascots* • Meow Mix Cat – 35 years • Tony the Tiger – 54 years • Toucan Sam – 45 years • Geoffrey the Giraffe – 35 years • Coca-Cola Polar Bears – 13 years • MGM Lion – 78 years Source: World Feature Syndicate 13-51
    52. 52. ** Marketing Data:* Least Error Method 1. Put someone in charge. 2. Give everyone a method of collecting data. 3. Identify the right data. 4. Centralize the data. 5. Use the Data. Source: cmomagazine.com, September 2004 13-52
    53. 53. ** Why Should You* Market To Women? • Women control 80% of all household spending. • Women purchase 81% of all products and services manufactured. • 80% of all checks written are signed by women. • 85% of all automobile purchases are influenced by women. • In 2005, 4.7 Million women were self- employed. Source: St. Louis Small Business Monthly, May 2004 13-53
    54. 54. ** Consumer Decision* Marketing mix Marketing mix Making Sociocultural Sociocultural •Product •Product •Reference groups •Reference groups •Price •Price •Family •Family •Place •Place •Social class •Social class •Promotion •Promotion •Culture •Culture •Subculture •Subculture Decision-Making Process Psychological Psychological Situational Situational •Problem Recognition •Perception •Perception •Type of Purchase •Type of Purchase •Information Search •Attitudes •Attitudes •Social surroundings •Social surroundings •Alternative evaluation •Learning •Learning •Physical •Physical •Purchase decision surroundings •Motivation surroundings •Motivation •Postpurchase evaluation •Previous experience •Previous experience • (cognitive dissonance) 13-54
    55. 55. ** Planning For* More Business • What do we do well-and not do well? • What are we really selling? • To whom do we sell? • How do we reach our target group? • How can we break through the clutter? Source: Investor’s Business Daily, February 9, 2004 13-55
    56. 56. * Business-to-Consumer* E-Commerce as % of* Sales 2000 2001 2002 2003 2004 2005 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% Source: U.S. Census, May 18, 2006; http://home.earthlink.net/~lindberg_b/GECGrwth.htm, accessed August 5, 2006 13-56
    57. 57. ** Top Marketing Tactics of* Small Businesses 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Web Sites Search Engine Community Public E-mail Marketing Direct Marketing Keywords Relations Relations/Media Coverage Source: Investor’s Business Daily, June 1, 2004 13-57
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