CHAPTER 13 Marketing: Helping Buyers Buy McGraw-Hill/Irwin Copyright © 2015 by the McGraw-Hill Companies, Inc All rights reserved LEARNING OBJECTIVES Define marketing, and apply the marketing concept to both forprofit and nonprofit organizations Describe the four P’s of marketing Summarize the marketing research process 13-2 LEARNING OBJECTIVES Show how marketers use environmental scanning to learn about the changing marketing environment Explain how marketers apply the tools of market segmentation, relationship marketing and the study of consumer behavior Compare the businesstobusiness market and the consumer market 13-3 DAYMOND JOHN FUBU • Started sewing wool hats in his apartment in 1989 and sold them on the street • He started designing other products and created the brand FUBU • After many rocky years, John has earned millions and advises others on Shark Tank. 13-4 NAME that COMPANY This company studies population growth and regional trends as it expands its product line for specific regions of the country. Its research led to the creation of Creole flavors targeted primarily in the South and spicy nacho chees flavors mad especially for Texas and California Name that company! 13-5 WHAT’S MARKETING? LO 131 • Marketing The activity, set of institutions and processes for creating, communicating, delivering, and exchanging offerings with value for customers, clients, partners, and society at large 13-6 FOCUS of CONTEMPORARY MARKETING LO 131 • Marketing today involves helping the buyer buy through: - Websites that help buyers find the best price, identify product features, and question sellers - Blogs and social networking sites that cultivate consumer relationships 13-7 FOUR ERAS of U.S. MARKETING LO 131 • Production Era • Selling Era • Marketing Concept Era • Customer Relationship Era 13-8 The PRODUCTION and SELLING ERAS LO 131 • The general philosophy was “Produce what you can because the market is limitless.” • After mass production, the focus turned from production to persuasion 13-9 The MARKETING CONCEPT ERA LO 131 • After WWII, a consumer spending boom developed • Businesses knew they needed to be responsive to consumers if they wanted their business 13-10 MARKETING to CONSUMERS LO 135 • The size and diversity of the consumer market forces marketers to decide which groups they want to serve • Market Segmentation Divides the total market into groups with similar characteristics • Target Marketing Selecting which segments an organization can serve profitably 13-40 SEGMENTING the CONSUMER MARKET LO 135 • Geographic Segmentation Dividing the market by cities, counties, states, or regions • Demographic Segmentation Dividing the market by age, income, education, and other demographic variables • Psychographic Segmentation Dividing the market by group values, attitudes, and interests 13-41 SEGMENTING the CONSUMER MARKET LO 135 • Benefit Segmentation Dividing the market according to product benefits the customer prefers • Volume (Usage) Segmentation Dividing the market by the volume of product use 13-42 SEGMENTING the CONSUMER MARKET LO 135 13-43 SEGMENTING the CONSUMER MARKET LO 135 13-44 MARKETING to SMALL SEGMENTS LO 135 • Niche Marketing Identifies small but profitable market segments and designs or finds products for them • OnetoOne Marketing Developing a unique mix of goods and services for each individual consumer 13-45 MASS MARKETING vs. RELATIONSHIP MARKETING LO 135 • Mass Marketing Developing products and promotions to please large groups of people • Relationship Marketing Rejects the idea of mass production and focuses toward custommade goods and services for customers 13-46 KEYS to SUCCESSFUL RELATIONSHIP MARKETING LO 135 • Effective relationship marketing is built on: - Open communication - Consistently reliable service - Staying in contact with customers - Trust, honesty, and ethical behavior - Showing that you truly care 13-47 STEPS in the CONSUMER DECISIONMAKING PROCESS LO 135 Problem recognition Search for information Evaluating alternatives Purchase decision Postpurchase evaluation 13-48 TURNING NEGATIVES to POSITIVE • Online product reviews have changed the consumer decisionmaking process • But the reviews are not always valid because they could be written about the experience instead of the product • Amazon hopes to correct this issue and has started a program in which the site’s most trusted reviewers are sent products to write about 13-49 KEY FACTORS in CONSUMER DECISIONMAKING LO 135 • Learning • Reference Groups • Culture • Subcultures • Cognitive Dissonance Photo Credit: Peter Hilton 13-50 TOP MARKETING CHALLENGES LO 135 • Marketing can be challenging in both the B2C and B2B markets. • Common issues are: - Brand awareness - Social media - Converting leads into customers - Budgeting - Increasing profit Source: Entrepreneur, www.entrepreneur.com, accessed November 2014 13-51 BUSINESStoBUSINESS MARKET (B2B) LO 136 • B2B marketers include: - Manufacturers - Wholesalers and retailers - Hospitals, schools and charities - Government • Products are often sold and resold several times before reaching final consumers 13-52 B2B MARKET DIFFERENCES LO 136 13-53 TEST PREP • Define the terms consumer market and business tobusiness market • Name and describe five ways to segment the consumer market • What is niche marketing and how does it differ from onetoone marketing? • What are four key factors that make B2B markets different from consumer markets? 13-54 ... Explain how marketers apply the tools of market segmentation, relationship marketing and the study of consumer behavior Compare the business to business market and the consumer market 13-3 DAYMOND JOHN FUBU • Started sewing wool hats in his ... LO 131 • After WWII, a consumer spending boom developed • Businesses knew they needed to be responsive to consumers if they wanted their business 13-10 APPLYING the MARKETING CONCEPT LO 131... have used in the past and what they want in the future • Research uncovers market trends and attitudes held by company insiders and stakeholders 13-25 FOUR STEPS in the MARKETING RESEARCH PROCESS LO 133