Customer-Driven Marketing

1
Customer-Driven Marketing
Chapter 12
2
Learning Goals
Summarize the ways in which marketing creates
utility. Discuss the marketing
concept. Describe not-for-profit marketing, and
identify the five major categories of
nontraditional marketing. Outline the basic
steps in developing a marketing strategy.
Describe the marketing research function.
Identify and explain the methods available for
segmenting consumer and business
markets. Outline the determinants of consumer
behavior. Discuss the benefits and tools for
relationship marketing.
1
5
2
6
7
3
4
8
3
What is Marketing?

• 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.
• Best marketers create a link in consumers minds
  between the new need and the fulfillment of that
  need by the product.
• 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
Utility - want-satisfying power of a good or
service. Create time utility by making a good or
service available when customers want to purchase
it. Create place utility by making a product
available in a location convenient for
customers. 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

• Marketing concept - company-wide consumer
  orientation to promote long-run success.
• Firm starts with analysis of customers needs and
  works backward to offer products that fulfill
  them.
• 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

• 20 million not-for-profits exist worldwide.
• Apply marketing tools to reach audiences, secure
  funding, improve their images, and accomplish
  their overall missions.
• 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

• 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.
• 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 firms product
  offerings, sometimes subject to government
  scrutiny.

11
Marketing Mix for International Markets

• Standardization - offering the same marketing mix
  in every market.
• Adaptation - developing a unique marketing mix to
  fit each markets local competitive conditions,
  consumer preferences, and government regulations.
• Mass customization - firms mass produce goods and
  services and add unique features to individual or
  small groups of orders.

12
Marketing Research

• Marketing research the process of collecting
  and evaluating information to support marketing
  decision making. AC Nielson Consumer Research
• Secondary data Previously published data from
  trade associations, advertising agencies,
  marketing research firms, and other sources.
• Primary data Data collected through observation,
  surveys, and other forms of observational study.
• Data mining - computer searches of customer data
  to detect patterns and relationships.

13
Market Segmentation
Market segmentation the process of dividing a
total market into several relatively homogeneous
groups.
14
How Market Segmentation Works
15
Segmenting Consumer Markets

• Geographic Segmentation
• Divides market into homogeneous groups on the
  basis of their locations.
• Demographic Segmentation
• 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.
• Psychographic Segmentation
• Divides consumer market into groups with similar
  psychological characteristics, values, and
  lifestyles.
• Product-Related Segmentation
• Divides market based on buyers relationship to
  the good or service.

16
Segmenting Business Markets

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

17
Determining What Customers Want

• 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.
• Personal factors needs and motives, perceptions,
  attitudes, self-concept.
• Interpersonal factors cultural, social, and
  family influences.
• Business buying behavior - often includes a
  variety of influences from multiple decision
  makers.

18
Steps in Consumer Behavior Process
19
Relationship Marketing

• Relationship marketing - developing and
  maintaining long-term, cost-effective exchange
  relationships with partners.
• Consumers enter into relationships only if there
  is some benefit to them.

20
Benefits of Relationship Marketing

• Lower costs and higher profits for the business.
• Efficient targeting of best customers increases
  the lifetime value of a customer.
• Stronger relationships with business partners and
  opportunities to combine capabilities and
  resources to better accomplish goals.

21
Tools for Nurturing Customer Relationships

• 80/20 principle Frequent customers have a higher
  lifetime value, so businesses allocate resources
  accordingly.
• Frequency marketing reward purchasers with
  cash, rebates, and other premiums.
• Affinity programs solicit involvement based on
  common interest.
• Comarketing businesses jointly market each
  others products.
• Cobranding firms link their names in a single
  product.

22
One-to-One Marketing
Customizing products and marketing and rapidly
delivering goods. Customer relationship
management software helps companies gather, sort,
and interpret data about specific customers.