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A kotler ch 01 05
- 1. Chapter 1- slide 1
Chapter One
Marketing: Creating and Capturing
Customer Value
- 2. Creating and Capturing Customer
Value
• What Is Marketing?
• Understand the Marketplace and Customer Needs
• Designing a Customer-Driven Marketing Strategy
Topic Outline
Chapter 1- slide 2Copyright © 2010 Pearson Education, Inc.
Publishing as Prentice Hall
• Preparing an Integrated Marketing Plan and Program
• Building Customer Relationships
• Capturing Value from Customers
• The Changing Marketing Landscape
- 3. What Is Marketing?
Marketing is a process by which
companies create value for customers and
build strong customer relationships to
capture value from customers in return
Chapter 1- slide 3Copyright © 2010 Pearson Education, Inc.
Publishing as Prentice Hall
capture value from customers in return
- 4. Understanding the Marketplace
and Customer Needs
• Customer needs, wants, and demands
• Market offerings
• Value and satisfaction
Core Concepts
Chapter 1- slide 4Copyright © 2010 Pearson Education, Inc.
Publishing as Prentice Hall
• Value and satisfaction
• Exchanges and relationships
• Markets
- 5. Understanding the Marketplace
and Customer Needs
• States of deprivation
• Physical—food, clothing, warmth, safety
• Social—belonging and affection
• Individual—knowledge and self-expression
Needs
Customer Needs, Wants, and Demands
Chapter 1- slide 5Copyright © 2010 Pearson Education, Inc.
Publishing as Prentice Hall
• Form that needs take as they are shaped by culture
and individual personalityWants
• Wants backed by buying powerDemands
- 6. Understanding the Marketplace
and Customer Needs
• Market offerings are some combination of
products, services, information, or experiences
offered to a market to satisfy a need or want
• Marketing myopia is focusing only on existing wants
Chapter 1- slide 6Copyright © 2010 Pearson Education, Inc.
Publishing as Prentice Hall
• Marketing myopia is focusing only on existing wants
and losing sight of underlying consumer needs
- 7. Understanding the Marketplace
and Customer Needs
Customer Value and Satisfaction
Expectations
Customers
• Value and
Chapter 1- slide 7Copyright © 2010 Pearson Education, Inc.
Publishing as Prentice Hall
• Value and
satisfaction
Marketers
• Set the right level of
expectations
• Not too high or low
- 8. Exchange is the act of obtaining a desired
object from someone by offering
something in return
Understanding the Marketplace
and Customer Needs
Chapter 1- slide 8Copyright © 2010 Pearson Education, Inc.
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something in return
- 9. Understanding the Marketplace
and Customer Needs
Markets are the set of actual and
potential buyers of a product
Chapter 1- slide 9Copyright © 2010 Pearson Education, Inc.
Publishing as Prentice Hall
- 10. Designing a Customer-Driven
Marketing Strategy
Marketing management is the art and
science of choosing target markets and
Chapter 1- slide 10Copyright © 2010 Pearson Education, Inc.
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science of choosing target markets and
building profitable relationships with them
– What customers will we serve?
– How can we best serve these customers?
- 11. Designing a Customer-Driven
Marketing Strategy
Market segmentation refers to dividing the
markets into segments of customers
Selecting Customers to Serve
Chapter 1- slide 11Copyright © 2010 Pearson Education, Inc.
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Target marketing refers to which segments
to go after
- 12. Designing a Customer-Driven
Marketing Strategy
Demarketing is marketing to reduce demand
temporarily or permanently; the aim is not
Selecting Customers to Serve
Chapter 1- slide 12Copyright © 2010 Pearson Education, Inc.
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temporarily or permanently; the aim is not
to destroy demand but to reduce or shift it
- 13. Designing a Customer-Driven
Marketing Strategy
Choosing a Value Proposition
The value proposition is the set of
benefits or values a company promises to
Chapter 1- slide 13Copyright © 2010 Pearson Education, Inc.
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benefits or values a company promises to
deliver to customers to satisfy their needs
- 14. Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Chapter 1- slide 14Copyright © 2010 Pearson Education, Inc.
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Production
concept
Product
concept
Selling
concept
Marketing
concept
Societal
concept
- 15. Designing a Customer-Driven
Marketing Strategy
Production concept is the idea that
consumers will favor products that are
Marketing Management Orientations
Chapter 1- slide 15Copyright © 2010 Pearson Education, Inc.
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consumers will favor products that are
available or highly affordable
- 16. Designing a Customer-Driven
Marketing Strategy
Product concept is the idea that consumers
will favor products that offer the most
Marketing Management Orientations
Chapter 1- slide 16Copyright © 2010 Pearson Education, Inc.
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will favor products that offer the most
quality, performance, and features.
Organization should therefore devote its
energy to making continuous product
improvements.
- 17. Designing a Customer-Driven
Marketing Strategy
Selling concept is the idea that consumers
will not buy enough of the firm’s products
unless it undertakes a large scale selling
Marketing Management Orientations
Chapter 1- slide 17Copyright © 2010 Pearson Education, Inc.
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unless it undertakes a large scale selling
and promotion effort
- 18. Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Marketing concept is the idea that
achieving organizational goals
depends on knowing the needs and
Chapter 1- slide 18Copyright © 2010 Pearson Education, Inc.
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depends on knowing the needs and
wants of the target markets and
delivering the desired satisfactions
better than competitors do
- 19. Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Societal marketing concept is the idea that a
company should make good marketing
decisions by considering consumers’ wants,
Chapter 1- slide 19Copyright © 2010 Pearson Education, Inc.
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decisions by considering consumers’ wants,
the company’s requirements, consumers’
long-term interests, and society’s long-run
interests
- 20. The marketing mix is the set of tools (four Ps)
the firm uses to implement its marketing
strategy. It includes product, price,
Preparing an Integrated Marketing
Plan and Program
Chapter 1- slide 20Copyright © 2010 Pearson Education, Inc.
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strategy. It includes product, price,
promotion, and place.
Integrated marketing program is a
comprehensive plan that communicates
and delivers the intended value to chosen
customers.
- 21. Building Customer Relationships
The overall process of building and maintaining
profitable customer relationships by delivering
superior customer value and satisfaction
Customer Relationship Management (CRM)
Chapter 1- slide 21Copyright © 2010 Pearson Education, Inc.
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superior customer value and satisfaction
- 22. Building Customer Relationships
Relationship Building Blocks: Customer Value
and Satisfaction
Customer-
perceived value
• The difference
Customer
satisfaction
• The extent to
Chapter 1- slide 22Copyright © 2010 Pearson Education, Inc.
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• The difference
between total
customer value
and total
customer cost
• The extent to
which a
product’s
perceived
performance
matches a
buyer’s
expectations
- 23. Building Customer Relationships
Customer Relationship Levels and Tools
Basic
Relationships
Chapter 1- slide 23Copyright © 2010 Pearson Education, Inc.
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Full
Partnerships
- 24. Building Customer Relationships
• Relating with more carefully selected
customers uses selective relationship
management to target fewer, more profitable
The Changing Nature of Customer
Relationships
Chapter 1- slide 24Copyright © 2010 Pearson Education, Inc.
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management to target fewer, more profitable
customers
• Relating more deeply and interactively by
incorporating more interactive two way
relationships through blogs, Websites, online
communities and social networks
- 25. Partner relationship management involves
working closely with partners in other
company departments and outside the
Building Customer Relationships
Chapter 1- slide 25Copyright © 2010 Pearson Education, Inc.
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company departments and outside the
company to jointly bring greater value to
customers
- 26. Building Customer Relationships
• Partners inside the company is every
function area interacting with customers
– Electronically
Partner Relationship Management
Chapter 1- slide 26Copyright © 2010 Pearson Education, Inc.
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– Electronically
– Cross-functional teams
• Partners outside the company is how
marketers connect with their suppliers,
channel partners, and competitors by
developing partnerships
- 27. Building Customer Relationships
• Supply chain is a channel that stretches
from raw materials to components to final
products to final buyers
Partner Relationship Management
Chapter 1- slide 27Copyright © 2010 Pearson Education, Inc.
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products to final buyers
• Supply management
• Strategic partners
• Strategic alliances
- 28. Capturing Value from Customers
• Customer lifetime value is the value of
the entire stream of purchases that the
customer would make over a lifetime of
Creating Customer Loyalty and Retention
Chapter 1- slide 28Copyright © 2010 Pearson Education, Inc.
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customer would make over a lifetime of
patronage
- 29. Capturing Value from Customers
Share of customer is the portion of the
customer’s purchasing that a company gets
Growing Share of Customer
Chapter 1- slide 29Copyright © 2010 Pearson Education, Inc.
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customer’s purchasing that a company gets
in its product categories
- 30. Capturing Value from
Customers
Customer equity is the total combined
customer lifetime values of all of the
company’s customers
Chapter 1- slide 30Copyright © 2010 Pearson Education, Inc.
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company’s customers
- 31. Capturing Value from Customers
• Building the right relationships with the
right customers involves treating
customers as assets that need to be
managed and maximized
Building Customer Equity
Chapter 1- slide 31Copyright © 2010 Pearson Education, Inc.
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managed and maximized
• Different types of customers require
different relationship management
strategies
– Build the right relationship with the right
customers
- 32. The Changing Marketing
Landscape
Digital age
Rapid
globalization
Major Developments
Chapter 1- slide 32Copyright © 2010 Pearson Education, Inc.
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Digital age
Rapid
globalization
Ethics and
social
responsibility
Not-for-profit
marketing
- 33. Chapter Two
Chapter 2- slide 1
Chapter Two
Company and Marketing Strategy
Partnering to Build Customer
Relationships
- 34. Company and Marketing Strategy
• Companywide Strategic Planning: Defining
Marketing’s Role
• Designing the Business Portfolio
• Planning Marketing: Partnering to Build Customer
Topic Outline
Chapter 2- slide 2Copyright © 2010 Pearson Education, Inc.
Publishing as Prentice Hall
• Planning Marketing: Partnering to Build Customer
Relationships
• Marketing Strategy and the Marketing Mix
• Managing the Marketing Effort
• Measuring and Managing Return on Marketing
Investment
- 35. Companywide Strategic Planning
Strategic planning is the process of
developing and maintaining a strategic fit
between the organization’s goals and
Strategic Planning
Chapter 2- slide 3Copyright © 2010 Pearson Education, Inc.
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between the organization’s goals and
capabilities and its changing marketing
opportunities
- 36. Companywide Strategic Planning
• The mission statement is
the organization’s
purpose, what it wants to
accomplish in the larger
Defining a Market-Oriented Mission
Chapter 2- slide 4Copyright © 2010 Pearson Education, Inc.
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accomplish in the larger
environment
• Market-oriented mission
statement defines the
business in terms of
satisfying basic customer
needs
- 37. Companywide Strategic Planning
Business
objectives
• Build profitable
Marketing
objectives
• Increase
Setting Company Objectives and Goals
Chapter 2- slide 5Copyright © 2010 Pearson Education, Inc.
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• Build profitable
customer
relationships
• Invest in
research
• Improve profits
• Increase
market share
• Create local
partnerships
• Increase
promotion
- 38. Companywide Strategic Planning
The business portfolio is the collection of
businesses and products that make up the
company
Designing the Business Portfolio
Chapter 2- slide 6Copyright © 2010 Pearson Education, Inc.
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company
Portfolio analysis is a major activity in
strategic planning whereby management
evaluates the products and businesses that
make up the company
- 39. Companywide Strategic Planning
Strategic business unit (SBU) is a unit of the
company that has a separate mission and
objectives that can be planned separately
Analyzing the Current Business Portfolio
Chapter 2- slide 7Copyright © 2010 Pearson Education, Inc.
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objectives that can be planned separately
from other company businesses
• Company division
• Product line within a division
• Single product or brand
- 40. Companywide Strategic Planning
Identify key businesses (strategic
business units, or SBUs) that make
up the company
Analyzing the Current Business Portfolio
Chapter 2- slide 8Copyright © 2010 Pearson Education, Inc.
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Assess the attractiveness of its
various SBUs
Decide how much support each
SBU deserves
- 42. Companywide Strategic Planning
• Difficulty in defining SBUs and measuring
market share and growth
• Time consuming
Problems with Matrix Approaches
Chapter 2- slide 10Copyright © 2010 Pearson Education, Inc.
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• Time consuming
• Expensive
• Focus on current businesses, not future
planning
- 43. Companywide Strategic Planning
Product/market expansion grid is a tool for
identifying company growth opportunities
Developing Strategies for Growth and Downsizing
Chapter 2- slide 11Copyright © 2010 Pearson Education, Inc.
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identifying company growth opportunities
through market penetration, market
development, product development, or
diversification
- 44. Companywide Strategic Planning
Developing Strategies for Growth and Downsizing
Product/Market Expansion Grid Strategies
Market Market
Chapter 2- slide 12Copyright © 2010 Pearson Education, Inc.
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Market
penetration
Market
development
Product
development
Diversification
- 45. Companywide Strategic Planning
Developing Strategies for Growth and Downsizing
Product/market expansion grid strategies
Chapter 2- slide 13Copyright © 2010 Pearson Education, Inc.
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- 46. Companywide Strategic Planning
Market penetration is a growth strategy
increasing sales to current market segments
without changing the product
Developing Strategies
for Growth and Downsizing
Chapter 2- slide 14Copyright © 2010 Pearson Education, Inc.
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without changing the product
Market development is a growth strategy that
identifies and develops new market segments
for current products
- 47. Companywide Strategic Planning
Product development is a growth strategy
that offers new or modified products to
existing market segments
Developing Strategies
for Growth and Downsizing
Chapter 2- slide 15Copyright © 2010 Pearson Education, Inc.
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existing market segments
Diversification is a growth strategy through
starting up or acquiring businesses outside
the company’s current products and
markets
- 48. Companywide Strategic Planning
Downsizing is the reduction of the business
portfolio by eliminating products or
Developing Strategies
for Growth and Downsizing
Chapter 2- slide 16Copyright © 2010 Pearson Education, Inc.
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portfolio by eliminating products or
business units that are not profitable or
that no longer fit the company’s overall
strategy
- 49. Planning Marketing
Partnering to Build Customer Relationships
Value chain is a series of departments
that carry out value-creating activities
to design, produce, market, deliver, and
Chapter 2- slide 17Copyright © 2010 Pearson Education, Inc.
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that carry out value-creating activities
to design, produce, market, deliver, and
support a firm’s products
- 50. Planning Marketing
Partnering to Build Customer Relationships
Value delivery network is made up of the
company, suppliers, distributors, and
ultimately customers who partner with each
other to improve performance of the entire
Chapter 2- slide 18Copyright © 2010 Pearson Education, Inc.
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other to improve performance of the entire
system
- 51. Marketing Strategy and the Marketing
Mix
Chapter 2- slide 19Copyright © 2010 Pearson Education, Inc.
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- 52. Marketing Strategy and the
Marketing Mix
Market segmentation is the division of a
market into distinct groups of buyers who
have distinct needs, characteristics, or
Customer-Driven Marketing Strategy
Chapter 2- slide 20Copyright © 2010 Pearson Education, Inc.
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have distinct needs, characteristics, or
behavior and who might require separate
products or marketing mixes
Market segment is a group of consumers who
respond in a similar way to a given set of
marketing efforts
- 53. Marketing Strategy and the
Marketing Mix
Market targeting is the process of evaluating
each market segment’s attractiveness and
selecting one or more segments to enter
Customer-Centered Marketing Strategy
Chapter 2- slide 21Copyright © 2010 Pearson Education, Inc.
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selecting one or more segments to enter
- 54. Marketing Strategy and the Marketing
Mix
Customer-Centered Marketing Strategy
Market positioning is the arranging for a
product to occupy a clear, distinctive, and
desirable place relative to competing
Chapter 2- slide 22Copyright © 2010 Pearson Education, Inc.
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desirable place relative to competing
products in the minds of the target
consumer
- 55. Marketing Strategy and the Marketing
Mix
Marketing mix is the set of controllable
Developing an Integrated Marketing Mix
Chapter 2- slide 23Copyright © 2010 Pearson Education, Inc.
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Marketing mix is the set of controllable
tactical marketing tools—product, price,
place, and promotion—that the firm blends
to produce the response it wants in the
target market
- 56. Marketing Strategy and the Marketing
Mix
Developing an Integrated Marketing Mix
Chapter 2- slide 24Copyright © 2010 Pearson Education, Inc.
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- 57. Managing the Marketing Effort
Chapter 2- slide 25Copyright © 2010 Pearson Education, Inc.
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- 58. Managing the Marketing Effort
Marketing Analysis – SWOT Analysis
Chapter 2- slide 26Copyright © 2010 Pearson Education, Inc.
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- 59. Managing the Marketing Effort
Market Planning—Parts of a Marketing Plan
Executive
summary
Marketing
situation
Threats and
opportunities
Chapter 2- slide 27Copyright © 2010 Pearson Education, Inc.
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summary
Objective
and issues
Marketing
strategy
Action
programs
Budgets Controls
- 60. Managing the Marketing Effort
Implementing is the process that turns
marketing plans into marketing actions to
accomplish strategic marketing objectives
Marketing Implementation
Chapter 2- slide 28Copyright © 2010 Pearson Education, Inc.
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• Successful implementation depends on how
well the company blends its people,
organizational structure, decision and reward
system, and company culture into a cohesive
action plan that supports its strategies
- 61. Managing the Marketing Effort
Functional organization
Geographic organization
Marketing Department Organization
Chapter 2- slide 29Copyright © 2010 Pearson Education, Inc.
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Geographic organization
Product management organization
Market or customer management
- 62. Managing the Marketing Effort
• Controlling is the measurement and
evaluation of results and the taking of
corrective action as needed
Marketing Control
Chapter 2- slide 30Copyright © 2010 Pearson Education, Inc.
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corrective action as needed
• Operating control
• Strategic control
- 63. Measuring and Managing
Return on Marketing Investment
Return on Marketing Investment (Marketing ROI)
Return on marketing investment (Marketing
ROI) is the net return from a marketing
investment divided by the costs of the
Chapter 2- slide 31Copyright © 2010 Pearson Education, Inc.
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investment divided by the costs of the
marketing investment. Marketing ROI provides
a measurement of the profits generated by
investments in marketing activities.
- 65. Analyzing the Marketing
Environment
• The Company’s Microenvironment
• The Company’s Macroenvironment
Topic Outline
Chapter 3- slide 2Copyright © 2010 Pearson Education, Inc.
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• The Company’s Macroenvironment
• Responding to the Marketing Environment
- 66. The Marketing Environment
The marketing environment includes the
actors and forces outside marketing that
affect marketing management’s ability to
Chapter 3- slide 3Copyright © 2010 Pearson Education, Inc.
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affect marketing management’s ability to
build and maintain successful relationships
with customers
- 67. The Marketing Environment
Microenvironment consists of the actors
close to the company that affect its ability
to serve its customers, the company,
Chapter 3- slide 4Copyright © 2010 Pearson Education, Inc.
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to serve its customers, the company,
suppliers, marketing intermediaries,
customer markets, competitors, and
publics
- 69. The Company’s
Microenvironment
• Top management
• Finance
• R&D
The Company
Chapter 3- slide 6Copyright © 2010 Pearson Education, Inc.
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• R&D
• Purchasing
• Operations
• Accounting
- 70. The Company’s
Microenvironment
• Provide the resources to produce goods
and services
• Treated as partners to provide customer
Suppliers
Chapter 3- slide 7Copyright © 2010 Pearson Education, Inc.
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• Treated as partners to provide customer
value
- 71. The Company’s
Microenvironment
Help the company
to promote, sell and
distribute its
Marketing Intermediaries
Chapter 3- slide 8Copyright © 2010 Pearson Education, Inc.
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distribute its
products to final
buyers
- 73. The Company’s
Microenvironment
• Firms must gain strategic advantage by
positioning their offerings against
competitors’ offerings
Competitors
Chapter 3- slide 10Copyright © 2010 Pearson Education, Inc.
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competitors’ offerings
- 74. The Company’s
Microenvironment
Publics
• Any group that has an actual or potential interest in
or impact on an organization’s ability to achieve its
objectives
– Financial publics
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– Financial publics
– Media publics
– Government publics
– Citizen-action publics
– Local publics
– General public
– Internal publics
- 76. The Company’s
Macroenvironment
Demography is the study of human populations
in terms of size, density, location, age, gender,
race, occupation, and other statistics
• Demographic environment is important
Demographic Environment
Chapter 3- slide 13Copyright © 2010 Pearson Education, Inc.
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• Demographic environment is important
because it involves people, and people make
up markets
• Demographic trends include age, family
structure, geographic population shifts,
educational characteristics, and population
diversity
- 77. The Company’s
Macroenvironment
• Increasing population
– Rapid growth in urban population in Asia
– In India, urban population to rise to 523 million
Demographic Environment
Chapter 3- slide 14Copyright © 2010 Pearson Education, Inc.
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– In India, urban population to rise to 523 million
by 2025
- 78. The Company’s
Macroenvironment
• A growing middle class
– MGI has divided the Indian population into 5
economic classes
Demographic Environment
Chapter 3- slide 15Copyright © 2010 Pearson Education, Inc.
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economic classes
– Division based on real annual disposable
income
- 79. The Company’s
Macroenvironment
• Deprived households have an annual
disposable income of less than Rs 90,000
– The poorest economic class
Demographic Environment
Chapter 3- slide 16Copyright © 2010 Pearson Education, Inc.
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– The poorest economic class
– Mostly unskilled or semi-skilled workers on
daily wages
- 80. The Company’s
Macroenvironment
• Aspirers have an annual disposable
income in the range of Rs 90,000 to Rs
200,000
Demographic Environment
Chapter 3- slide 17Copyright © 2010 Pearson Education, Inc.
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200,000
– Spend most of their income on basic
necessities
– Small-time retailers, small farmers, etc.
- 81. The Company’s
Macroenvironment
• Seekers have an annual disposable income
between Rs 200,000 and Rs 500,000.
Mostly white-collar employees, mid-level
government officials, newly employed
Demographic Environment
Chapter 3- slide 18Copyright © 2010 Pearson Education, Inc.
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government officials, newly employed
postgraduates, medium-scale traders
- 82. The Company’s
Macroenvironment
• Strivers have an annual income ranging
from Rs 500,000 to Rs 1,000,000
– Have a stable income source and access to
Demographic Environment
Chapter 3- slide 19Copyright © 2010 Pearson Education, Inc.
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– Have a stable income source and access to
amenities
– Mostly professionals such as lawyers, CAs,
senior government officials, rich farmers
- 83. The Company’s
Macroenvironment
• Global Indians have an annual
disposable income in excess of Rs
1,000,000
Demographic Environment
Chapter 3- slide 20Copyright © 2010 Pearson Education, Inc.
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1,000,000
– Creamy layer in society
– Globe-trotters with a high standard of living
- 84. The Company’s
Macroenvironment
Demographic Environment
• Growth in the rural population
• A changing family system
• The changing role of women
Chapter 3- slide 21Copyright © 2010 Pearson Education, Inc.
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• The changing role of women
• Increasing diversity
- 85. The Company’s
Macroenvironment
Economic environment consists of factors
that affect consumer purchasing power and
spending patterns
Economic Environment
Chapter 3- slide 22Copyright © 2010 Pearson Education, Inc.
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spending patterns
• Industrial economies are richer markets
• Subsistence economies consume most of
their own agriculture and industrial output
- 86. The Company’s
Macroenvironment
• The global financial crisis of 2007–2009 has
affected the consumption and production
of many products
• Value marketing involves ways to offer
Economic Environment
Chapter 3- slide 23Copyright © 2010 Pearson Education, Inc.
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• Value marketing involves ways to offer
financially cautious buyers greater value—
the right combination of quality and service
at a fair price
- 87. The Company’s
Macroenvironment
• Ernst Engel—Engel’s Law
• As income rises:
Economic Environment
Changes in Consumer Spending Patterns
Chapter 3- slide 24Copyright © 2010 Pearson Education, Inc.
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• As income rises:
– The percentage spent on food declines
– The percentage spent on housing remains
constant
– The percentage spent on savings increases
- 88. The Company’s
Macroenvironment
Natural environment involves the natural
resources that are needed as inputs by
marketers or that are affected by marketing
activities
Natural Environment
Chapter 3- slide 25Copyright © 2010 Pearson Education, Inc.
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activities
• Trends
– Shortages of raw materials
– Increased pollution
– Increase government intervention
– Environmentally sustainable strategies
- 89. The Company’s
Macroenvironment
Technological Environment
• Most dramatic force in changing the
marketplace
• Creates new products and
opportunities
Chapter 3- slide 26Copyright © 2010 Pearson Education, Inc.
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opportunities
• Safety of new product always a
concern
- 90. The Company’s
Macroenvironment
Political environment consists of laws,
government agencies, and pressure groups
that influence or limit various organizations
Political Environment
Chapter 3- slide 27Copyright © 2010 Pearson Education, Inc.
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that influence or limit various organizations
and individuals in a given society
- 91. The Company’s
Macroenvironment
• Legislation regulating business
– Increased legislation
– Changing government agency enforcement
– New forms of nontariff barriers in trade
Political Environment
Chapter 3- slide 28Copyright © 2010 Pearson Education, Inc.
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– New forms of nontariff barriers in trade
• Increased emphasis on ethics
– Socially responsible behavior
– Cause-related marketing
- 92. The Company’s
Macroenvironment
Cultural environment consists of
institutions and other forces that affect a
society’s basic values, perceptions, and
Cultural Environment
Chapter 3- slide 29Copyright © 2010 Pearson Education, Inc.
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society’s basic values, perceptions, and
behaviors
- 93. The Company’s
Macroenvironment
Core beliefs and values are persistent and are
passed on from parents to children and are
reinforced by schools, religious institutions,
Cultural Environment
Persistence of Cultural Values
Chapter 3- slide 30Copyright © 2010 Pearson Education, Inc.
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reinforced by schools, religious institutions,
businesses, and government
Secondary beliefs and values are more open to
change and include people’s views of
themselves, others, organization, society,
nature, and the universe
- 94. The Company’s
Macroenvironment
• People’s view of themselves
– Yankelovich Monitor’s consumer segments:
Cultural Environment
Shifts in Secondary Cultural Values
Chapter 3- slide 31Copyright © 2010 Pearson Education, Inc.
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– Yankelovich Monitor’s consumer segments:
• Do-it-yourselfers—recent movers
• Adventurers
• People’s view of others
– More “cocooning”
- 95. The Company’s
Macroenvironment
• People’s view of organizations
• People’s view of society
Cultural Environment
Shifts in Secondary Cultural Values
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• People’s view of society
– Patriots defend it
– Reformers want to change it
– Malcontents want to leave it
- 96. The Company’s
Macroenvironment
Cultural Environment
Shifts in Secondary Cultural Values
• People’s view of nature
– Some feel ruled by it
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– Some feel ruled by it
– Some feel in harmony with it
– Some seek to master it
• People’s view of the universe
– Renewed interest in spirituality
- 97. Responding to the Marketing
Environment
Uncontrollable Proactive Reactive
Views on Responding
Chapter 3- slide 34Copyright © 2010 Pearson Education, Inc.
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• React and
adapt to
forces in the
environment
• Aggressive
actions to
affect forces
in the
environment
• Watching
and reacting
to forces in
the
environment
- 98. Chapter 4- slide 1
Chapter Four
Managing Marketing Information to
Gain Customer Insights
- 99. Learning Objectives
• Marketing Information and Customer Insights
• Assessing Marketing Information Needs
• Developing Marketing Information
• Marketing Research
Topic Outline
Chapter 4- slide 2Copyright © 2010 Pearson Education, Inc.
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• Marketing Research
• Analyzing Marketing Information
• Distributing and Using Marketing Information
• Other Marketing Information Considerations
- 100. Marketing Information and
Customer Insights
• Fresh and deep insights into customers’
needs and wants
• Difficult to obtain
Customer Insights
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• Difficult to obtain
– Not obvious
– Customers unsure of their behavior
• Not derived from more information but
better information and more effective use
of existing information
- 101. Marketing Information and
Customer Insights
• Companies are forming customer
insights teams
– Include all company functional areas
Customer Insights
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– Include all company functional areas
– Use insights to create more value for their
customers
– Customer control could be a problem
- 102. Marketing Information and
Customer Insights
Marketing information system (MIS)
consists of people and procedures
for:
Marketing Information Systems (MIS)
Chapter 4- slide 5Copyright © 2010 Pearson Education, Inc.
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for:
– Assessing informational needs
– Developing needed information
– Helping decision makers use the information
to generate customer insights
- 104. Assessing Marketing Information
Needs
MIS provides information to the company’s
marketing and other managers and
external partners such as suppliers,
Chapter 4- slide 7Copyright © 2010 Pearson Education, Inc.
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external partners such as suppliers,
resellers, and marketing service agencies
- 105. Assessing Marketing Information
Needs
• Balancing what the information users
would like to have against what they need
and what is feasible to offer
Characteristics of a Good MIS
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and what is feasible to offer
User’s
Needs
MIS
Offerings
- 106. Developing Marketing Information
Internal data
Marketers obtain information from
Chapter 4- slide 9Copyright © 2010 Pearson Education, Inc.
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Marketing intelligence
Marketing research
- 107. Developing Marketing Information
Internal databases are electronic
collections of consumer and market
information obtained from data
Internal Data
Chapter 4- slide 10Copyright © 2010 Pearson Education, Inc.
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information obtained from data
sources within the company network
- 108. Developing Marketing Information
Marketing intelligence is the systematic
collection and analysis of publicly available
information about consumers, competitors,
Marketing Intelligence
Chapter 4- slide 11Copyright © 2010 Pearson Education, Inc.
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information about consumers, competitors,
and developments in the marketplace
- 109. Developing Marketing Information
Marketing Research
Marketing research is the
systematic design, collection,
analysis, and reporting of data
Chapter 4- slide 12Copyright © 2010 Pearson Education, Inc.
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analysis, and reporting of data
relevant to a specific marketing
situation facing an organization
- 111. Developing Marketing Information
Marketing Research
Defining the Problem and Research Objectives
Exploratory research
Chapter 4- slide 14Copyright © 2010 Pearson Education, Inc.
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Exploratory research
Descriptive research
Causal research
- 112. Developing Marketing Information
• Outlines sources of existing data
• Spells out the specific research
Marketing Research
Developing the Research Plan
Chapter 4- slide 15Copyright © 2010 Pearson Education, Inc.
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• Spells out the specific research
approaches, contact methods,
sampling plans, and instruments to
gather data
- 113. Developing Marketing Information
Management problem
Research objectives
Marketing Research
Written Research Plan Includes:
Chapter 4- slide 16Copyright © 2010 Pearson Education, Inc.
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Information needed
How the results will help
management decisions
Budget
- 114. Developing Marketing Information
Secondary data consists of information that
already exists somewhere, having been
Marketing Research
Developing the Research Plan
Chapter 4- slide 17Copyright © 2010 Pearson Education, Inc.
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already exists somewhere, having been
collected for another purpose
Primary data consists of information
gathered for the special research plan
- 116. Developing Marketing Information
Planning Primary Data
Collection
Research
approaches
Marketing Research
Chapter 4- slide 19Copyright © 2010 Pearson Education, Inc.
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approaches
Contact methods
Sampling plan
Research
instruments
- 117. Developing Marketing Information
Observational research involves gathering
primary data by observing relevant people,
Market Research
Research Approaches
Chapter 4- slide 20Copyright © 2010 Pearson Education, Inc.
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primary data by observing relevant people,
actions, and situations
Ethnographic research involves sending
trained observers to watch and interact
with consumers in their natural
environment
- 118. Developing Marketing Information
Survey research is the most widely used
method and is best for descriptive
information—knowledge, attitudes,
Market Research
Research Approaches
Chapter 4- slide 21Copyright © 2010 Pearson Education, Inc.
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information—knowledge, attitudes,
preferences, and buying behavior
• Flexible
• People can be unable or unwilling to answer
• People may give misleading or pleasing answers
• Privacy concerns
- 119. Developing Marketing Information
Experimental research is best for gathering
causal information—cause-and-effect
Market Research
Research Approaches
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causal information—cause-and-effect
relationships
- 120. Developing Marketing Information
Marketing Research Strengths and
Weakness of Contact Methods
Mail Telephone Personal Online
Flexibility Poor Good Excellent Good
Quantity of data
collected
Good Fair Excellent Good
Chapter 4- slide 23Copyright © 2010 Pearson Education, Inc.
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collected
Control of
interviewer effects
Excellent Fair Poor Fair
Control of sample Fair Excellent Good Excellent
Speed of data
collection
Poor Excellent Good Excellent
Response rate Poor Poor Good Good
Cost Good Fair Poor Excellent
- 121. Developing Marketing Information
• Focus Groups
– Six to 10 people with a trained
moderator
Marketing Research
Contact Methods
Chapter 4- slide 24Copyright © 2010 Pearson Education, Inc.
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moderator
– Challenges
• Expensive
• Difficult to generalize from small group
• Consumers not always open and honest
- 123. Developing Marketing Information
Advantages
• Low cost
Disadvantages
• Restricted
Marketing Research
Online Research
Chapter 4- slide 26Copyright © 2010 Pearson Education, Inc.
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• Low cost
• Speed
• Higher
response rates
• Good for hard
to reach
groups
• Restricted
internet
access
• Not sure who
is answering
- 124. Developing Marketing Information
Sample is a segment of the population
selected for marketing research to
Marketing Research
Sampling Plan
Chapter 4- slide 27Copyright © 2010 Pearson Education, Inc.
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selected for marketing research to
represent the population as a whole
– Who is to be surveyed?
– How many people should be surveyed?
– How should the people be chosen?
- 125. Developing Marketing Information
Probability Sample
Simple random sample Every member of the population has a known and equal
chance of selection
Stratified random The population is divided into mutually exclusive groups
Marketing Research
Sampling Plan—Types of Samples
Chapter 4- slide 28Copyright © 2010 Pearson Education, Inc.
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Stratified random
sample
The population is divided into mutually exclusive groups
and random samples are drawn from each group
Cluster (area) sample The population is divided into mutually exclusive groups
and the researcher draws a sample
Nonprobability Sample
Convenience sample The researcher selects the easiest population members
Judgment sample The researcher uses his/her judgment to select
population members
Quota sample The researcher finds and interviews a prescribed number
of people in each of several categories
- 126. Developing Marketing Information
Marketing Research
Research Instruments
Questionnaires
• Most common
Chapter 4- slide 29Copyright © 2010 Pearson Education, Inc.
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• Most common
• Administered in person, by phone,
or online
• Flexible
• Research must be careful with
wording and ordering of questions
- 127. Developing Marketing Information
• Closed-end questions include all possible
answers, and subjects make choices among
them
Marketing Research
Research Instruments—Questionnaires
Chapter 4- slide 30Copyright © 2010 Pearson Education, Inc.
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them
– Provide answers that are easier to interpret and
tabulate
• Open-end questions allow respondents to
answer in their own words
– Useful in exploratory research
- 129. Developing Marketing Information
Collecting the information
Marketing Research
Implementing the Research Plan
Chapter 4- slide 32Copyright © 2010 Pearson Education, Inc.
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Processing the information
Analyzing the information
Interpret findings
Draw conclusions
Report to management
- 130. Analyzing and Using Marketing
Information
• CRM consists of sophisticated software and
analytical tools that integrate customer
Customer Relationship Management (CRM)
Chapter 4- slide 33Copyright © 2010 Pearson Education, Inc.
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analytical tools that integrate customer
information from all sources, analyze it in
depth, and apply the results to build
stronger customer relationships
- 131. Analyzing and Using Marketing
Information
Service and
Customer Relationship Management
Touchpoints
Chapter 4- slide 34Copyright © 2010 Pearson Education, Inc.
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Customer
purchases
Sales force
contacts
Service and
support
calls
Web site
visits
Satisfaction
surveys
Credit and
payment
interactions
Research
studies
- 132. Distributing and Using Marketing
Information
Information distribution involves
entering information into databases and
making it available in a time-usable
manner
Chapter 4- slide 35Copyright © 2010 Pearson Education, Inc.
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manner
• Intranet provides information to
employees and other stakeholders
• Extranet provides information to key
customers and suppliers
- 133. Other Marketing Information
Considerations
Marketing Research in Small Businesses
and Nonprofit Organizations
Chapter 4- slide 36Copyright © 2010 Pearson Education, Inc.
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International Market Research
Public Policy and Ethics
• Customer privacy
• Misuse of research findings
- 134. Chapter 5- slide 1
Chapter Five
Consumer Markets and Consumer Buyer
Behavior
- 135. Consumer Markets and Consumer
Buyer Behavior
• Model of Consumer Behavior
• Characteristics Affecting Consumer
Behavior
Topic Outline
Chapter 5- slide 2Copyright © 2010 Pearson Education, Inc.
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Behavior
• Types of Buying Decision Behaviors
• The Buyer Decision Process
• The Buyer Decision Process for New
Products
- 136. Consumer buyer behavior refers to the buying
behavior of final consumers—individuals and
households who buy goods and services for
personal consumption
Model of Consumer Behavior
Chapter 5- slide 3Copyright © 2010 Pearson Education, Inc.
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personal consumption
Consumer market refers to all of the personal
consumption of final consumers
- 137. Model of Consumer Behavior
Chapter 5- slide 4Copyright © 2010 Pearson Education, Inc.
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- 139. Culture is the learned values, perceptions,
wants, and behavior from family and other
Characteristics Affecting
Consumer Behavior
Chapter 5- slide 6Copyright © 2010 Pearson Education, Inc.
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wants, and behavior from family and other
important institutions
- 140. Characteristics Affecting
Consumer Behavior
Subcultures are groups of people within a culture
with shared value systems based on common life
experiences and situations
• Bengalis
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• Bengalis
• Gujaratis
• Punjabis
- 141. Social classes are society’s relatively
permanent and ordered divisions whose
members share similar values, interests,
Characteristics Affecting
Consumer Behavior
Chapter 5- slide 8Copyright © 2010 Pearson Education, Inc.
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members share similar values, interests,
and behaviors
• Measured by a combination of occupation,
income, education, wealth, and other
variables
- 143. Characteristics Affecting
Consumer Behavior
• Word-of-mouth influence and buzz
marketing
– Opinion leaders are people within a
reference group who exert social
Groups and Social Networks
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– Opinion leaders are people within a
reference group who exert social
influence on others
– Also called influentials or leading
adopters
– Marketers identify them to use as brand
ambassadors
- 144. Characteristics Affecting
Consumer Behavior
• Online Social Networks are
online communities where
people socialize or exchange
information and opinions
Groups and Social Networks
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information and opinions
• Include blogs, social
networking sites (facebook),
virtual worlds (second life)
- 145. Characteristics Affecting
Consumer Behavior
• Family is the most important consumer-
buying organization in society
• The groups, family, clubs, and organizations
that a person belongs to define his/her social
Social Factors
Chapter 5- slide 12Copyright © 2010 Pearson Education, Inc.
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that a person belongs to define his/her social
role and status
- 146. Characteristics Affecting
Consumer Behavior
• Age and life-cycle stage
• RBC Royal Band stages
– Youth: younger than 18
Personal Factors
Chapter 5- slide 13Copyright © 2010 Pearson Education, Inc.
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– Youth: younger than 18
– Getting started: 18–35
– Builders: 35–50
– Accumulators: 50–60
– Preservers: over 60
- 147. Characteristics Affecting
Consumer Behavior
Occupation affects the goods and services
bought by consumers
Personal Factors
Chapter 5- slide 14Copyright © 2010 Pearson Education, Inc.
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bought by consumers
Economic situation includes trends in:
Personal
income
Savings
Interest
rates
- 148. Characteristics Affecting
Consumer Behavior
Lifestyle is a person’s pattern of living
as expressed in his or her
psychographics
• Measures a consumer’s AIOs
Personal Factors
Chapter 5- slide 15Copyright © 2010 Pearson Education, Inc.
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• Measures a consumer’s AIOs
(activities, interests, opinions) to
capture information about a person’s
pattern of acting and interacting in the
environment
- 149. Characteristics Affecting
Consumer Behavior
• Personality and self-concept
– Personality refers to the unique psychological
Personal Factors
Chapter 5- slide 16Copyright © 2010 Pearson Education, Inc.
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– Personality refers to the unique psychological
characteristics that lead to consistent and
lasting responses to the consumer’s
environment
- 152. Characteristics Affecting
Consumer Behavior
A motive is a need that is sufficiently
pressing to direct the person to seek
Psychological Factors
Motivation
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pressing to direct the person to seek
satisfaction
Motivation research refers to qualitative
research designed to probe consumers’
hidden, subconscious motivations
- 154. Characteristics Affecting
Consumer Behavior
Perception is the process by which
people select, organize, and interpret
information to form a meaningful picture
of the world from three perceptual
Psychological Factors
Chapter 5- slide 21Copyright © 2010 Pearson Education, Inc.
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of the world from three perceptual
processes
– Selective attention
– Selective distortion
– Selective retention
- 155. Characteristics Affecting
Consumer Behavior
Selective attention is the tendency for people to
screen out most of the information to which they
are exposed
Selective distortion is the tendency for people to
Psychological Factors
Chapter 5- slide 22Copyright © 2010 Pearson Education, Inc.
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Selective distortion is the tendency for people to
interpret information in a way that will support
what they already believe
Selective retention is the tendency to remember
good points made about a brand they favor and
forget good points about competing brands
- 156. Characteristics Affecting
Consumer Behavior
• Learning is the change in an individual’s
behavior arising from experience and
occurs through interplay of:
Psychological Factors
Chapter 5- slide 23Copyright © 2010 Pearson Education, Inc.
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occurs through interplay of:
Drives Stimuli Cues
Responses Reinforcement
- 157. Characteristics Affecting
Consumer Behavior
Belief is a descriptive thought that a person
has about something based on:
Psychological Factors
Beliefs and Attitudes
Chapter 5- slide 24Copyright © 2010 Pearson Education, Inc.
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has about something based on:
• Knowledge
• Opinion
• Faith
- 158. Characteristics Affecting
Consumer Behavior
Attitudes describe a person’s relatively
consistent evaluations, feelings, and
tendencies toward an object or idea
Psychological Factors
Chapter 5- slide 25Copyright © 2010 Pearson Education, Inc.
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tendencies toward an object or idea
- 159. Types of Buying Decision
Behavior
Complex buying behavior
Dissonance-reducing buying behavior
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Dissonance-reducing buying behavior
Habitual buying behavior
Variety-seeking buying behavior
- 160. Types of Buying Decision
Behavior
Four Types of Buying Behavior
Chapter 5- slide 27Copyright © 2010 Pearson Education, Inc.
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- 161. The Buyer Decision Process
Buyer Decision Making Process
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- 162. The Buyer Decision Process
• Occurs when the buyer recognizes a
problem or need triggered by:
– Internal stimuli
Need Recognition
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– Internal stimuli
– External stimuli
- 163. The Buyer Decision Process
• Personal sources—family and friends
• Commercial sources—advertising, Internet
• Public sources—mass media, consumer
Information Search
Sources of Information
Chapter 5- slide 30Copyright © 2010 Pearson Education, Inc.
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• Public sources—mass media, consumer
organizations
• Experiential sources—handling, examining,
using the product
- 164. The Buyer Decision Process
• How the consumer processes information
to arrive at brand choices
Evaluation of Alternatives
Chapter 5- slide 31Copyright © 2010 Pearson Education, Inc.
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to arrive at brand choices
- 165. The Buyer Decision Process
• The act by the consumer to buy the most
preferred brand
• The purchase decision can be affected by:
Purchase Decision
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• The purchase decision can be affected by:
– Attitudes of others
– Unexpected situational factors
- 166. The Buyer Decision Process
• The satisfaction or dissatisfaction that the
consumer feels about the purchase
• Relationship between:
– Consumer’s expectations
Post-Purchase Decision
Chapter 5- slide 33Copyright © 2010 Pearson Education, Inc.
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– Consumer’s expectations
– Product’s perceived performance
• The larger the gap between expectation and
performance, the greater the consumer’s
dissatisfaction
• Cognitive dissonance is the discomfort caused
by a post-purchase conflict
- 167. The Buyer Decision Process
Customer satisfaction is a key to building
profitable relationships with consumers—
to keeping and growing consumers and
Post-Purchase Decision
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to keeping and growing consumers and
reaping their customer lifetime value
- 168. The Buyer Decision Process for
New Products
Adoption process is the mental process an
individual goes through from first learning
about an innovation to final regular use.
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about an innovation to final regular use.
• Stages in the process include:
Awareness Interest Evaluation Trial Adoption
- 169. The Buyer Decision Process for
New Products
Influence of Product Characteristics
on Rate of Adoption
Relative
Compatibility Complexity
Chapter 5- slide 36Copyright © 2010 Pearson Education, Inc.
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Relative
advantage
Compatibility Complexity
Divisibility Communicability
