11 Marketing: Building a Profitable Customer Connection · 11 Marketing: Building a Profitable...

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11 Marketing: Building a Profitable Customer Connection

©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

1 ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

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Marketing: Building Profitable Customer Connections

• What are the objectives, processes and scope of marketing?

• What is the customer’s role in marketing?

• What are the elements of the marketing strategy?

• What is the decision-making process for consumers? Businesses?

• What are the key elements of marketing research?

• How have social responsibility and technology impacted marketing?

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Marketing: Getting Value by Giving Value

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Marketing – the activity, set of institutions, and processes for creating, communicating,

delivering, and exchanging offerings that have value for customers, clients, partners, and

society at large.

http://www.marketingpower.com/Pages/default.aspx

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Marketing: Getting Value by Giving Value

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The ability of goods and services to

satisfy wants.

Form Utility

Time Utility

Place Utility

Ownership Utility

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The Scope of Marketing: It’s Everywhere!

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• People Marketing

• Place Marketing

• Event Marketing

• Idea Marketing

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The Evolution of Marketing: From the Product to the Customer

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The Marketing Concept

The marketing concept is a philosophy that makes customer satisfaction—now and in the future—the central focus of the entire

organization.

Unmatched value to customers is the only way to long-term profitability

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The Customer: Front and Center

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Limited Relationships

Full Partnerships

Customer Relationship Management (CRM) Value

Customer Satisfaction

Customer Loyalty

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Customers must believe that your product is simply uniquely qualified to meet

their needs

Perceived Value versus Actual Value

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• Low cost does not mean value • Value is a relationship between cost and benefits • Loyal customers will pay more for their products • Creating value is not enough

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Customer Satisfaction

You have satisfied customers when you deliver perceived value above and beyond their expectations, but

Don’t overpromise

Don’t underpromise

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Marketing Strategy: Where Are You Going And How Will You Get There?

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• Marketing Plan – organizations may have a formal or informal plan that directs their efforts

• Marketing Segmentation – the first step in planning your marketing strategy. Who are the people who will buy the

products?

Divide the market into groups of people and segments to target (target market)

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Marketing Strategy: Where Are You Going And How Will You Get There?

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A Well Chosen Target Market:

Size

Profitability

Accessibility

Limited Competition

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Consumer Markets versus Business Markets

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How will the buyer use the

product?

Consumer Markets

Business Markets

Products for personal

consumption.

Products used directly or

indirectly to produce other

products.

Different approaches to select target markets.

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Consumer Market Segmentation

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• Demographic

• Geographic

• Psychographic

• Behavioral

• Marketers may select multiple segments to target

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Business Market Segmentation

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• Geographic

• Customer-based

• Product-use based

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Color Me…Hungry?!

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•Marketing researchers found that American consumers associate red with energy, passion, speed, and hunger.

•Yellow suggests happiness and warmth; orange suggests playfulness, fun, affordability.

Surrounding customers with red, yellow, and orange encourages them to eat a lot quickly and leave.

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The Marketing Mix

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The Global Marketing Mix

Change and growth in the world market requires understanding the global environment

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• Do you need to change your marketing mix for every country?

• Most consumer products require a new marketing mix for each global market while many business products do not

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The Marketing Environment

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Without a Map, Charting an Ethical Course: When Less is More…

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• In 2008, 30% of all packaged goods got smaller, mostly unnoticed by consumers

• Food manufacturers state these changes are needed in light of skyrocketing costs

• Others say it is a game of deception, what do you think?

• Skippy peanut butter jars got 10% smaller but the jar looks the same

• PepsiCo reduced the size of its orange juice by 7 ounces but touted a “new ergonomic design”

• Many argue that this is a distraction from price increases

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Customer Behavior: Decisions! Decisions! Decisions!

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Consumer Behavior

How people act when they are buying

products.

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Consumer Decision Process

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Elements that Influence the Consumer Decision-Making Process

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Cultural: Values, attitudes, customs, social class

Social: Family, friends & reference groups

Personal: Demographics, personality

Psychological: Motivation, attitudes, perceptions, learning

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Business Buyer Behavior

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Rationale Criteria

Specific Purchase Criteria

Objective Standards

Input from Multiple Internal Sources

Formal Process

Frequently Seek Customized Goods

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Marketing Research: So What Do They REALLY Think?

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• Monitor and predict customer behavior

• Evaluate and improve marketing mix

• Better marketing decisions

• More value for consumers

• More profits for business

Marketing research involves gathering, interpreting, and applying information to

uncover opportunities and challenges

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Research Data Comparison

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Secondary Data: Existing Data

Primary Data: New Data that is Compiled

Lower Cost More Expensive

May not be Specific Customized

Frequently Outdated Fresh, New

Available to Competitors Proprietary

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Primary Research Tools

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Observation Research – the researcher does not directly

interact with the research subject

• Scanner Data • Traffic counters • Garbage Analysis

Survey Research – the researcher does interact

with the research subjects

• Questionnaires • Interviews • Focus Groups

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Oops! “If you can’t be a good example, than you’ll have to serve as a horrible warning”

• Nike filmed a commercial in Kenya where the slogan Just Do It translated into “I don’t want these. Give me big shoes.”

• Just for Feet spent $7 million on a campaign for the Super Bowl where a crowd of white men were tracking down a barefoot black runner.

• Hershey’s introduced Ice Breakers Pacs in nickel-sized dissolvable pouches but the police thought the products closely resembled powered street drugs.

• Tropicana introduced new packaging for its orange juice and consumers were outraged. They thought the new packaging was stupid, ugly and generic.

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An International Perspective

Market research in other countries can be complicated Very few home phones in Latin America

In the Middle East, knocking on doors is a crime

Many firms hire local professionals for international market research

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Marketing and Society: It’s Not Just About You!

Leading-edge marketers have set high standards in: Environmentalism

Abolishment of sweatshops

Community outreach

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A few examples: Starbucks Target General Electric

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Green Marketing

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Actively promoting ecological benefits of products

• The Toyota Prius

• Eco-Fashion is made from organic cotton, bambo dresses, biodegradable umbrellas, solar-powered jackets

• The aim is to grow the number of consumers who make purchases based on their convictions

• But, green marketing may be challenging in tough economic times

http://www.gogreenmoving.com/

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Technology and Marketing: Power to the People!

• Technology is shifting power to the consumer

• Consumers have 24/7 access to products and information all over the world

• Competition has intensified

• Consumer expectation has increased

• Companies have more opportunities to mass customize products

• Data can be used to develop one-to-one relationships with customers

• The digital boom has created a variety of promotional opportunities

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http://store.nike.com/index.jsp?country=US&lang_locale=en_US&cp=USNS_KW_SU07_US_Google_B&ref=http://www.google.com

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Innovation Unleased!

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Your creativity can aid innovation

ARREST

YOU’RE

HISTORY

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You’re under arrest

History repeats

itself

Made in China

Missing Link

Time after Time

Wise Guy

Equal Rights

Repeat after me

Banana Split

Mixing business

with pleasure

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Looking Back

• What are the objectives, processes and scope of marketing?

• What is the customer’s role in marketing?

• What are the elements of the marketing strategy?

• What is the decision-making process for consumers? Businesses?

• What are the key elements of marketing research?

• How have social responsibility and technology impacted marketing?

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11 Marketing: Building a Profitable Customer Connection · 11 Marketing: Building a Profitable...

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