You are on page 1of 57

* * *

Evolution of Marketing
• Production Era - Up to early 1900s • Selling Era - 1920s-1950s • Marketing Concept Era - 1950s 1980s
• Customer • Service • Profit

• Customer Relationship Era - 1990s+
13-1

* * *

I. WHAT IS MARKETING? Learning goal 1 Define marketing and explain how the marketing concept applies in both for-profit and nonprofit organizations. The Evolution of the Field of Marketing The Production Era The Selling Era The Marketing Concept Era The Customer Relationship Era

Nonprofit Organizations and Marketing

13-2

* * *

Describe the marketing research process, and explain how marketers use environmental scanning to learn about the changing marketing environment. The Marketing Research Process
The Marketing Environment Global Factors Technological Factors Sociocultural Factors Competitive Factors Economic Factors Two Different Markets: Consumer and Business-to-Business (B2B)
13-3

* * *

Marketing Process
1. Find Opportunity 2. Conduct Research 3. Identify Target Market 4. Design Product 5. Product Testing 6. Brand Name, Design & Price 7. Develop Distribution System 8. Design Promotional Program 9. Build Relationship With Customer

13-4

* * *

III.THE CONSUMER MARKET Learning goal 4 Explain how marketers meet the needs of the consumer market through market segmentation, relationship marketing, and the study of consumer behavior. Segmenting the Consumer Market Reaching Smaller Market Segments Moving toward Relationship Marketing Forming Communities of Buyers The Consumer Decision-Making Process

13-5

THE BUSINESS-TO-BUSINESS MARKET Learning goal 5 List ways in which the business-to-business market differs from the consumer market.* * * IV. 13-6 .

13-7 . pricing. Marketing activities depend on what needs to be done to fill customers’ needs. MARKETING is the process of planning and executing the conception.* * * WHAT IS MARKETING? Learning goal 1 Define marketing and explain how the marketing concept drives both for-profit and nonprofit organizations. Selling and advertising are only part of marketing. promotion. and distribution of goods and services to facilitate exchanges that satisfy individual and organizational objectives.

13-8 . THE SELLING ERA By the 1920s.‖ The goals of business CENTERED ON PRODUCTION. The greatest marketing need was for distribution and storage. the general philosophy was to ―produce as much as you can because there is a limitless market.* * * THE EVOLUTION OF THE FIELD OF MARKETING THE PRODUCTION ERA Until the early 1900s. the business philosophy turned to an EMPHASIS ON SELLING AND ADVERTISING to sell existing products.

businesses had to be RESPONSIVE TO CONSUMERS. 13-9 .* * * THE MARKETING ERA The BABY BOOM after WWII created a tremendous demand for goods and services. The MARKETING CONCEPT emerged in the 1950s. If they wanted to get their business.

* * * The Marketing Environment Economic Competitive Technology Customer Social Global 13-10 .

During the 1980s. A PROFIT ORIENTATION: Focus on those goods and services that will earn the most profit. business began to apply the marketing concept more aggressively. 13-11 .* * * The MARKETING CONCEPT is a three-part business philosophy: A CUSTOMER ORIENTATION: Find out what consumers want and provide it. A SERVICE ORIENTATION: Make sure everyone in the organization has the same objective–CUSTOMER SATISFACTION.

The goal is to enhance customer satisfaction and stimulate long-term customer loyalty. churches. 13-12 . states. politicians. NONPROFIT ORGANIZATIONS AND MARKETING Marketing is a crucial part of almost all organizations. Charities. and many other organizations all use marketing. profit and nonprofit.* * * THE CUSTOMER RELATIONSHIP ERA CUSTOMER RELATIONSHIP MANAGEMENT (CRM) is the process of learning as much as possible about customers and doing everything you can to satisfy them–or even exceed their expectations–with goods and services over time.

* * * THE MARKETING MIX Learning goal 2 List and describe the four Ps of marketing. Pleasing customers has become a priority. The FOUR FACTORS OF MARKETING are: Product Price Place Promotion CONTROLLABLE PARTS of the marketing process involve: Designing a want-satisfying PRODUCT Setting a PRICE for the product Placing the product in a PLACE where people will buy it PROMOTING the product 13-13 .

* * * Elements in the Marketing Mix Product Marketing Program Buy at Computers ‘R Us Place Price Promotion 13-14 .

13-15 . APPLYING THE MARKETING PROCESS To present an overview of the marketing process. the text takes a hypothetical vegetarian restaurant through THE MARKETING PROCESS. and promotion. price. Very Vegetarian.* * * These four factors have become known as the MARKETING MIX the ingredients that go into a marketing program: product. place. The process involves: Recognizing a need researching the market Identifying the TARGET MARKET The text uses the example of a start-up vegetarian restaurant.

13-16 .* * * DESIGNING A PRODUCT TO MEET NEEDS First. TEST MARKETING is the process of testing products among potential users. such as the brand. develop a product to fill the identified need. Next. or idea that satisfies a want or need plus anything that would enhance the product in the eye of consumers. decide which brand names should be offered to attract customers. A PRODUCT is any physical good. The next step is CONCEPT TESTING developing an accurate description of your product and asking people whether or not the concept (the idea of the cereal) appeals to them. service.

* * * Product Design • Concept Test • Test Market • Package Design/Brand Name 13-17 .

letter. These steps create THE FIRST ―P‖—PRODUCT. 13-18 . SETTING AN APPROPRIATE PRICE (the second “P”) The price depends on a number of factors. You also have to consider the costs of producing. such as the price of competing restaurants.* * * A BRAND NAME is a word. or group of words or letters that differentiates one seller’s goods and services from those of competitors. and promoting the product. distributing.

DEVELOPING AN EFFECTIVE PROMOTIONAL STRATEGY (the fourth “P”) 13-19 . (MARKETING MIDDLEMEN. You may want to sell your product through INTERMEDIARIES.* * * GETTING THE PRODUCT TO THE RIGHT PLACE (the third “P”) Once the product is manufactured.) organizations that specialize in distributing goods from producer to customer. you have to decide how to get it to the consumer.

RELATIONSHIP BUILDING WITH CUSTOMERS includes responding to any suggestions they may make to improve the product or the marketing of the product.* PROMOTION * consists of all the techniques sellers use to * motivate people to buy products or services. 13-20 .

companies must continually adapt to changes in the market. PROVIDING MARKETERS WITH INFORMATION Learning goal 3 Describe the marketing research process. 13-21 . and explain how marketers use environmental scanning to learn about the changing marketing environment. Listening to customers is the key to marketing.* * * Marketing is an ONGOING PROCESS.

13-22 . consumer advocates. and MARKETING RESEARCH is the activity that gathers that information. In addition to customers. and to find the information needed to make good decisions. One goal is to determine exactly what consumers want and need. and other stakeholders. now and in the future. shareholders.* * * MARKETING RESEARCH is the analysis of markets to determine opportunities and challenges. marketers should pay attention to the views of employees. Businesses need information to compete effectively.

13-23 .* * * THE MARKETING RESEARCH PROCESS STEP 1. so SOME TRADE-OFF must be made between information needed and the cost. Defining the problem and determining the present situation STEP 2. Collecting data Research can be quite expensive.

information that has already been published previously by others and published in journals and books or made available online. and personal interviews are the most common methods of gathering survey information. online surveys. 13-24 . secondary data should be gathered first as it is the least expensive. Often. The result of new studies is PRIMARY DATA. so marketers must do their own research. secondary data don’t provide all the necessary information.* * * Less expensive is SECONDARY DATA.) Despite its name. mail surveys. data that you gather yourself (not from secondary sources such as books and magazines. Telephone surveys.

* * * Sources for Marketing Research Information Secondary Data • Government Publications • Commercial Publications • Magazines • Newspapers • Internal/General Sources Primary Data • Surveys • Focus groups • Interviews • Observation • Online surveys • Questionnaires • Customer comments 13-25 .

honest interpretation of the data can reveal specific marketing challenges. STEP 3.* * * A FOCUS GROUP is of a small group of people who meet under the direction of a discussion leader to communicate their opinions about an organization. its product. or other given issues. Marketers can now gather both secondary and primary data online. Careful. 13-26 . Analyzing the research data The data collected must be turned into useful information.

THE MARKETING ENVIRONMENT ENVIRONMENTAL SCANNING is the process of identifying the factors that can affect marketing success 13-27 . Choosing the best solution and implement it Researchers determine ALTERNATIVE STRATEGIES and make recommendations as to which strategy may be best.* * * STEP 4. Consumers are demanding more ethical behavior from companies. The actions taken should be FOLLOWED UP to see if results were as expected.

* * * Market Research Process • Define the Question • Collect Data • Analyze the data • Choose the best solution and implement 13-28 .

such as the aging population and the preferences of various ethnic groups. flexible manufacturing.* GLOBAL FACTORS * The most important global change today is the growth of the Internet. and mass customization. 13-29 . Globalization has also put pressure on companies that deliver * products. SOCIOCULTURAL FACTORS include population growth and changing demographics. the growth of consumer databases. TECHNOLOGICAL FACTORS include the Internet.

ECONOMIC FACTORS Marketers must pay close attention to the economic environment in the U.* * * COMPETITIVE FACTORS Brick-and-mortar companies must adjust to new competition from the Internet. who can deliver products quickly or provide excellent service. They have to adapt to competitors.S. and globally. 13-30 .

) The buyer’s REASON FOR BUYING and the END USE of the product determine whether it is considered a consumer product or a B2B product. 13-31 . The BUSINESS-TO-BUSINESS (B2B) MARKET consists of all the individuals and organizations that want goods and services to use in producing other goods and services or to sell. or supply goods to others (traditionally called INDUSTRIAL GOODS.* * * TWO DIFFERENT MARKETS: CONSUMER AND BUSINESS-TO-BUSINESS (B2B) THERE ARE TWO MAJOR MARKETS: The CONSUMER MARKET consists of all the individuals or households that want goods and services for personal consumption or use. rent.

Direct Sales 6. Size 3.* * * Business-to-Business (B2B) 1. Geographic Concentration 4. Number 2. Rational 5. Personal Selling 13-32 .

income. and taste. education level. Marketers must first decide which group to serve and then develop products and services specially tailored to their needs (as Campbell Soup Company does. TARGET MARKETING is marketing directly toward those groups (market segments) an organization decides it can serve profitably.) MARKET SEGMENTATION is the process of dividing the total market into groups whose members have similar characteristics.* * * THE CONSUMER MARKET Consumer groups differ greatly in age. 13-33 .

relationship marketing. 13-34 . and interests. and education level.* * * SEGMENTING THE CONSUMER MARKET Learning goal 4 Explain how marketers meet the needs of the consumer market through market segmentation. GEOGRAPHIC SEGMENTATION is dividing the market by geographic area. and the study of consumer behavior. attitudes. BENEFIT SEGMENTATION is dividing the market by determining which benefits of the product to talk about. income. PSYCHOGRAPHIC SEGMENTATION is dividing the market using the group’s values. DEMOGRAPHIC SEGMENTATION is dividing the market by age.

* * * Market Segmentation • Target Marketing • Geographic • Demographic • Psychographic • Benefit • Volume 13-35 .

) The best segmentation strategy is to USE ALL THE VARIABLES to come up with a consumer profile that’s sizable. but is becoming possible in consumer markets as well.* * * VOLUME. reachable. ONE-TO-ONE MARKETING means developing a unique mix of goods and services for each individual customer. This is easier to do one-to-one marketing in B2B markets. REACHING SMALLER MARKET SEGMENTS NICHE MARKETING is the process of finding small but profitable market segments and designing custom-made products for them. and profitable. OR USAGE. SEGMENTATION is dividing the market by usage (volume of use. 13-36 .

* * * Different Markets • Consumer • Niche • One-to-One • Business-toBusiness (B2B) 13-37 .

and newspapers. such as TV. RELATIONSHIP MARKETING is a marketing strategy with the goal of keeping individual customers over time by offering them products that exactly meet their requirements. 13-38 . That means using mass media. The mass marketer tries to sell products to as many people as possible. RELATIONSHIP MARKETING moves away from mass production toward CUSTOM-MADE GOODS.* * * MOVING TOWARD RELATIONSHIP MARKETING MASS MARKETING means developing products and promotions to please large groups of people. radio.

May 2005 13-39 .* * * Pricing Strategies • Cost-Plus • Value-Based • Skimming • Discount • Competitive • Going-Rate • Loss-Leader • Psychological Source: Perdue University.

* * * Influences on Consumer Behavior Culture Learning Reference Group Customer Cognitive Subculture Dissonance 13-40 .

or behavior. .* * * SOCIOCULTURAL INFLUENCES such as reference groups and culture Consumer behavior is also influenced by other factors: LEARNING involves changes in an individual’s behavior resulting from previous experiences and information. CULTURE is the set of values. 13-41 . and ways of doing things that are transmitted from one generation to another in a given society. attitudes. A REFERENCE GROUP is the group that an individual uses as a reference point in formation of his or her beliefs. values. attitudes.

* * * SUBCULTURE is the set of values. COGNITIVE DISSONANCE is the type of psychological conflict that can occur after a purchase—such as doubts about whether they got the best product at the best price. attitudes. 13-42 . and ways of doing things that results from belonging to a certain group with which one closely identifies.

rental car companies. and the Hard Rock Café. The text uses two examples: service firms such as airlines. THE CONSUMER DECISION-MAKING PROCESS Studying consumer behavior centers on studying the CONSUMER 13-43 . and hotels. One-way messages in mass media are replaced by a personal dialogue among participants.* * * The latest in TECHNOLOGY enables sellers to work with buyers to determine their individual wants and needs and to develop goods and services specifically designed for those individuals.

MARKETING MIX VARIABLES (the four Ps) PSYCHOLOGICAL INFLUENCES such as perception and attitudes SITUATIONAL INFLUENCES such as the type of purchase and physical surroundings 13-44 .* * * PURCHASE DECISION PROCESS: Problem recognition Information search Evaluate alternatives Make purchase decision Postpurchase evaluation Consumer behavior researchers also study the various INFLUENCES THAT IMPACT CONSUMER BEHAVIOR.

13-45 . SIZE Though few in number.* * * Several factors make BUSINESS-TO-BUSINESS MARKETING DIFFERENT NUMBER: There are relatively FEW CUSTOMERS compared to the consumer market. industrial customers are relatively VERY LARGE.

RATIONAL Business buyers are generally MORE RATIONAL in their purchase decisions. DIRECT B2B sales tend to be DIRECT. PERSONAL SELLING There is much more emphasis in personal selling than in the consumer market. . YOUR PROSPECTS IN MARKETING There is a wider variety of careers in marketing than in most 13-46 business areas.* * * GEOGRAPHICALLY CONCENTRATED: B2B markets tend to be CONCENTRATED in certain areas of the country.

know how to manage finances 13-47 • Make marketing the focus.* * * Marketing Strategies in Non-Profit Organizations • Find a productive board of trustees (Directors) • Practice strategic planning • Carefully segment target market • Train & develop volunteers for long-term • Be frugal. not short-term sales • Know your mission and review mission strategy regularly .

* * * Where They Got Their Names Founder(s) • Taco Bell • Days Inn • Bose Corp • Ty Inc. • Bristol-Myers Glen Bell Cecil Day Amar Bose Ty Warner William Bristol & John Myers 13-48 Source: World Features Syndicate .

May 2005 13-49 .* * * Other Things To Keep In Mind With Price • Payment Period • Allowances • Regular • Seasonal • Price Differences • Target Customers • Geographic Areas • • • • Bundling Trade Discounts Price Flexibility Credit Terms • Volume Discounts and Wholesale Pricing • Cash and Early Pmt Discount Source: Perdue University.

May 2005 13-50 .* * * Place Decisions • Direct Sales • Reseller Sales • Market Coverage • Intensive • Selective • Exclusive • Inventory Size • Logistics Source: Perdue University.

* * * Advertising Mascots • • • • • • Meow Mix Cat – 35 years Tony the Tiger – 54 years Toucan Sam – 45 years Geoffrey the Giraffe – 35 years Coca-Cola Polar Bears – 13 years MGM Lion – 78 years Source: World Feature Syndicate 13-51 .

Source: cmomagazine. Give everyone a method of collecting data. 5. September 2004 13-52 . 3.* * * Marketing Data: Least Error Method 1. 4. 2. Put someone in charge. Centralize the data.com. Identify the right data. Use the Data.

7 Million women were selfemployed.* * * Why Should You Market To Women? • Women control 80% of all household spending. • 85% of all automobile purchases are influenced by women. May 2004 13-53 . • 80% of all checks written are signed by women. Louis Small Business Monthly. Source: St. • In 2005. 4. • Women purchase 81% of all products and services manufactured.

* * * Consumer Decision Making Marketing mix •Product Sociocultural •Reference groups •Price •Place •Promotion •Family •Social class •Culture •Subculture Psychological •Perception •Attitudes •Learning •Motivation Decision-Making Process •Problem Recognition •Information Search •Alternative evaluation •Purchase decision Situational •Type of Purchase •Social surroundings •Physical surroundings •Previous experience 13-54 •Postpurchase evaluation • (cognitive dissonance) .

February 9.* * * Planning For More Business • • • • • What do we do well-and not do well? What are we really selling? To whom do we sell? How do we reach our target group? How can we break through the clutter? Source: Investor’s Business Daily. 2004 13-55 .

htm.net/~lindberg_b/GECGrwth. Census.50% 1.50% 2.00% 0. 2006.S. http://home.* * * Business-to-Consumer E-Commerce as % of Sales 2000 2001 2002 2003 2004 2005 0.00% 1.earthlink.50% Source: U. accessed August 5. May 18.00% 2. 2006 13-56 .

0% Web Sites Search Engine Keywords Community Relations Public Relations/Media Coverage E-mail Marketing Direct Marketing Source: Investor’s Business Daily. 2004 13-57 .0% 30.0% 40.0% 60.0% 20. June 1.0% 10.* * * Top Marketing Tactics of Small Businesses 70.0% 50.0% 0.