Customer-Driven Marketing

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Chapter 12 Customer-Driven Marketing
Learning Goals
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.
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Summarize the ways in which marketing creates
utility. Explain the marketing concept and relate
how customer satisfaction contributes added
value. Describe not-for-profit marketing, and
identify the five major categories of
nontraditional marketing.
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WHAT IS MARKETING? Marketing Organizational
function and set of processes for creating,
communicating, and delivering value to customers
and for man- aging customer relationships in ways
that benefit the organization and its
stakeholders. Exchange process Activity in which
two or more parties give something of value to
each other to satisfy perceived needs. How
Marketing Creates Utility Utility Want-satisfying
power of a good or service. Time utility Making
a good or service available when customers want
to purchase it.   Place utility Making a product
available in a location convenient for
customers.   Ownership utility Orderly transfer
from the seller to the buyer.
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EVOLUTION OF THE MARKETING CONCEPT
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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.
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Delivering Added Value Through Customer
Satisfaction and Loyalty Firm starts with
analysis of customers needs and works backward
to offer products that fulfill them. Customer
satisfaction Ability of a good or service to meet
or exceed a buyers needs and expectations.  Incr
easing customer loyalty just five percent equals
significant increases in lifetime profits per
customer. Customer Satisfaction and
Feedback  Can get feedback through toll-free
telephone hotlines, customer satisfaction
surveys, customer complaints, and other ways.
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EXPANDING MARKETINGS TRADITIONAL
BOUNDARIES Not-for-Profit Marketing 20 million
not-for-profits worldwide.  Account for five
percent of GDP 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.
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Nontraditional Marketing
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DEVELOPING A MARKETING STRATEGY First, study
and analyze potential target markets and choose
among them. Second, create a marketing mix to
satisfy the chosen market.
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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. Marketing mix Blending the four
elements of marketing strategyproduct,
distribution, promotion, and pricingto satisfy
chosen customer segments. Developing a 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.
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MARKETING RESEARCH Marketing research Collecting
and evaluating information to support marketing
decision making. Obtaining Marketing Research
Data  Use internal and external data.
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. AC Nielson Consumer
Research
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Applying Marketing Research Data  As accuracy of
research information increases, so does the
effectiveness of the marketing strategies.  Exam
ple GMs H3 Hummer research Data Mining Data
mining Computer searches of customer data to
detect patterns and relationships. Uses data
warehouses, sophisticated customer databases that
allow managers to combine data from several
different organizational functions. Example
Walmarts use to determine local preferences and
tailor its inventory appropriately.
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MARKET SEGMENTATION Market segmentation Process
of dividing a total market into several
relatively homogeneous groups.
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How Market Segmentation Works
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Segmenting Consumer Markets Geographic
Segmentation Divides market into homogeneous
groups on the basis of their locations. Demographi
c Segmentation Divides market on the basis of
various demographic or socioeconomic
characteristics. 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. Segmenting Business
Markets Resembles segmentation for consumer
markets, but some methods differ.
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CONSUMER BEHAVIOR 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. Determinants of Consumer
Behavior  Personal factors Needs and motives,
perceptions, attitudes, self-concept.
Interpersonal factors Cultural, social, and
family influences. Determinants of Business
Buying Behavior Often a variety of influences
from multiple decision makers.
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Steps in the Consumer Behavior Process
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CREATING, MAINTAINING, AND STRENGTHENING
MARKETING RELATIONSHIPS Relationship marketing
Developing and maintaining long-term,
cost-effective exchange relationships with
partners. Benefits of Relationship
Marketing  Lower costs and higher profits for
the business. Efficient targeting of best
customers that increases the lifetime value of a
customer.  Stronger relationships with business
partners and opportunities to combine
capabilities and resources to better accomplish
goals.
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Tools for Nurturing Customer Relationships  80/20
principle Frequent customers have a higher
lifetime value, so businesses allocate resources
accordingly. Frequency Marketing and
Affinity-Marketing Programs Frequency marketing
Reward purchasers with cash, rebates, and other
premiums.  Affinity programs Solicit involvement
based on common interest. Example Credit card
with baseball team logo  Comarketing Businesses
jointly market each others products.  Cobranding
Firms link their names in a single
product. One-on-One Marketing Customizing
products and marketing and rapidly delivering
goods.