The document summarizes key concepts in customer-driven marketing. It discusses how marketing creates utility for customers and the evolution of the marketing concept to a customer orientation. It also outlines the basic steps in developing a marketing strategy, including analyzing target markets and creating a marketing mix. Relationship marketing and tools for nurturing customer relationships are also summarized.

1. Chapter 11
Customer-Driven Marketing

2. Learning Objectives
1 Summarize the ways in which marketing 5 Describe the marketing research
creates utility. function.
2 Discuss the marketing concept. 6 Identify and explain the methods
available for segmenting consumer
3 Describe not-for-profit marketing, and and business markets.
identify the five major categories of
nontraditional marketing. 7 Outline the determinants
of consumer behavior.
4 Outline the basic steps in developing a
marketing strategy. 8 Discuss the benefits and
tools for relationship
marketing.

3. W Is Marketing?
hat
s Marketing- set of processes for creating,
communicating, and delivering value to customers and
for managing customer relationships in ways that benefit
the organization and its stakeholders.
s Marketing begins with discovering unmet customer needs and
continues with researching the potential market; producing a good
or service capable of satisfying the targeted customers; and
promoting, pricing, and distributing that good or service.
s Throughout the entire marketing process, a successful organization
focuses on building customer relationships.
s The best marketers not only give consumers what they want but
even anticipate consumers’ needs before those needs surface.
s Exchange process- activity in which two or more parties
give something of value to each other to satisfy
perceived needs.

4. How Marketing Creates Utility
s Utility: power of a good or service to satisfy a
want or need
s Create time utility by making a good or service
available when customers want to purchase it.
s Create place utility by making a product
available in a location convenient for customers.
s Create ownership utility through an orderly
transfer of goods and services from the seller to
the buyer.

5. Evolution of the Marketing Concept

6. Emergence of the Marketing Concept
s Marketing concept- company-wide
consumer orientation to promote long-run
success.
s Firm starts with analysis of customers’ needs
and works backward to offer products that
fulfill them.
s Explained by shift from sellers’ market in
which goods and services are relatively
scarce to buyers’ market in which they are
relatively plentiful.

7. Not-for-Profit Marketing
s 20 million not-for-profits exist worldwide.
s Apply marketing tools to reach audiences, secure
funding, improve their images, and accomplish
their overall missions.
s Not-for-profit organizations operate in both public
and private sectors.
s Sometimes partner with a profit-seeking company
to promote a message.

8. Non-Traditional Marketing

9. Developing a Marketing Strategy
1. Study and analyze
potential target
markets and choose
among them.
2. Create a marketing
mix to satisfy the
chosen market.

10. Selecting a Target Market
s Target market- group of people toward whom an
organization markets its goods, services, or ideas
with a strategy designed to satisfy their specific
needs and preferences.
s Types of Markets
s consumer (B2C) product: good or service that is
purchased by end users
s business (B2B) product: good or service purchased to be
used, either directly or indirectly, in the production of
other goods for resale

11. Marketing Mix
s Marketing Mix blends the four strategies to fit the
needs and preferences of a specific target market.
→ Product strategy involves the nature of the product and its
package design, brand names, trademarks, and product
image.
→ Distribution strategy ensures that customers receive their
purchases in the proper quantities at the right times and
locations.
→ Promotional strategy blends advertising, personal selling,
sales promotion, and public relations to achieve its goals of
informing, persuading, and influencing purchase decisions.
→ Pricing strategy is setting profitable and justifiable prices for
the firm’s product offerings, sometimes subject to
government scrutiny.

12. Marketing Mix for International
Markets
s Standardization- offering the same marketing
mix in every market.
s Adaptation- developing a unique marketing
mix to fit each market’s local competitive
conditions, consumer preferences, and
government regulations.
s Mass customization- allows a firm to mass
produce goods and services while adding
unique features to individual or small groups of
orders.

13. Marketing Research
s Marketing research– the process of collecting and
evaluating information to support marketing decision
making. AC Nielson– Consumer Research
s Secondary data– Previously published data from trade
associations, advertising agencies, marketing research
firms, and other sources.
s Primary data– Data collected through observation,
surveys, and other forms of observational study.
s Data mining– computer searches of customer data to
detect patterns and relationships.
s Business intelligence– activities and technologies for
gathering, storing, and analyzing data to make better
competitive decisions

14. Market Segmentation
s Market segmentation– the process of dividing a total
market into several relatively homogeneous groups.

15. How Market Segmentation Works

16. Segmenting Consumer Markets
s Geographic Segmentation
s Divides market into homogeneous groups on the basis of their
locations.
s Demographic Segmentation
s Divides market on the basis of various demographic or socioeconomic
characteristics: gender, income, age, occupation, household size,
stage in the family life cycle, education, and ethnic group
s Psychographic Segmentation
s Divides consumer market into groups with similar psychological
characteristics, values, and lifestyles. (VALS)
s AIO statements—people’s verbal descriptions of various attitudes, interests,
and opinions
s Product-Related Segmentation
s Divides market based on buyer’s relationship to the good or service.
s based on benefits sought by buyers, usage rates, and loyalty levels

17. Segmenting Business Markets
s Geographic segmentation– targets
geographically concentrated industries.
s Demographic, or customer-based,
segmentation– a good or service
intended for a specific organizational
market (i.e. healthcare).
s End-use segmentation– focuses on
the precise way a B2B purchaser will
use a product.

18. Determining W Customers W
hat ant
s Consumer behavior- actions of ultimate
consumers directly involved in obtaining,
consuming, and disposing of products and the
decision processes that precede and follow these
actions.
s Personal factors: needs and motives, perceptions,
attitudes, self-concept
s Interpersonal factors: cultural, social, and family
influences
s External factors: economic events
s Business buying behavior- often includes a
variety of influences from multiple decision makers.

19. Steps in Consumer Behavior

20. Relationship Marketing
s Relationship marketing- developing and
maintaining long-term, cost-effective exchange
relationships with partners.
s Consumers enter into relationships only if
there is some benefit to them.
s Relationship marketing seeks to achieve
customer satisfaction.

21. Benefits of Relationship Marketing
s Lower costs and higher profits for the business.
s Efficient targeting of best customers increases the
lifetime value of a customer.
s revenues and intangible benefits (referrals and
customer feedback) from a customer over the life of
the relationship, minus the amount the company must
spend to acquire and serve that customer.
s Stronger relationships with business partners and
opportunities to combine capabilities and
resources to better accomplish goals.

22. Tools for Nurturing Customer
Relationships
s 80/20 principle: frequent customers have a
higher lifetime value, so businesses allocate
resources accordingly
s Frequency marketing: reward purchasers with
cash, rebates, and other premiums (
TGI Fridays reward program)
s Affinity programs: solicit involvement based on
common interest
s Comarketing: businesses jointly market each
others’ products
s Cobranding: firms link their names in a single
product

23. One-to-One Marketing
s Customizing products and marketing and
rapidly delivering goods.
s Customer relationship management
software helps companies gather, sort, and
interpret data about specific customers.