Chapter 11 Part 2

Customer-Driven Marketing
Dr. Amer Rajput
Department of Management Sciences
COMSATS University Islamabad
Wah Campus, Pakistan
Learning Objectives

1 Describe the marketing research function.

2 Identify and explain the methods available for segmenting consumer and
business markets.

3 Outline the determinants of consumer behavior.

4 Discuss the benefits and tools for relationship marketing.

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.
Business intelligence– activities and technologies for
gathering, storing, and analyzing data to make better
competitive decisions
Market Segmentation
Market segmentation– the process of dividing a total market
into several relatively homogeneous groups.
How Market Segmentation Works
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. (VALS)
AIO statements—people’s verbal descriptions of various attitudes, interests, and
opinions
Product-Related Segmentation
Divides market based on buyer’s relationship to the good or service.
based on benefits sought by buyers, usage rates, and loyalty levels
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.
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
External factors: economic events
Business buying behavior- often includes a variety of
influences from multiple decision makers.
Steps in Consumer Behavior
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.

Relationship marketing seeks to achieve customer

satisfaction.
Benefits of Relationship Marketing
Lower costs and higher profits for the business.
Efficient targeting of best customers increases the
lifetime value of a customer.
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.
Stronger relationships with business partners and
opportunities to combine capabilities and resources to
better accomplish goals.
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 (TGI Fridays reward
program)
Affinity programs: solicit involvement based on
common interest
Comarketing: businesses jointly market each others’
products
Cobranding: firms link their names in a single product
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.
Thank you !