Chapter 14 - marketing: Building customer and stakeholder relationships

Chapter 14 marketing: Building customer and stakeholder relationships 1 What is marketing? Determining the needs and wants of others and providing a good or service to satisfy those wants or needs “Find a need and fill it.” In the past marketing focused almost entirely on helping the seller sell. People still think of it as mostly selling, advertising, and distribution from the seller to the buyer. Today, much of marketing is instead about helping the buyer buy. 2 Evolution of marketing 3 The Production Era: produce as much as possible, the need for what was produced was largely unmet and it would sell. The Sales Era: production had met demand and the products now had to sold to the customers. Convince people that they needed what you made. 4 Evolution of marketing The “marketing” concept A three-part business philosophy: (1) Customer orientation Find out what consumers want and provide it for them. (2) Service orientation Everyone from the president of the firm to the delivery people should be customer-oriented. (3) Profit orientation Focus on those goods and services that will earn the most profit and enable the organization to survive and expand. 5 Understanding the marketing process Market research to find out if a need exists Design a product to meet the need Distribution: getting the product to the customer Establishing a relationship with the customer Promoting the product, dealing with complaints, etc. helps to establish a customer relationship 6 The marketing orientation era Organizations with a market orientation actually engage in customer relationship management (CRM) – the process of building long-term relationships with customers by delivering customer value and satisfaction. Retaining customers over time, or managing the entire customer life cycle, is a cost-effective way for firms to grow in competitive markets 7 MARKET ORIENTATION Focusing efforts on Continuously collecting information about customers’ needs and competitors’ capabilities, Sharing this information throughout the organization, and Using the information to create value, ensure customer satisfaction, and develop customer relationships. 8 THE SOCIAL MEDIA MARKETING ERA Social media involves the building of communities or networks, encouraging participation and engagement. The most common tools or platforms used by both consumers and organizations are social networking sites (e.g., Facebook, MySpace, LinkedIn, and Twitter), blogs, wikis, podcasts, and other shared media sites such as YouTube 9 10 ELEMENTS IN THE MARKETING MIX ELEMENTS IN THE MARKETING MIX 11 These four factors are called the marketing mix because they are mixed together in a marketing program. A marketing manager designs a marketing program that “mixes” some of the products, different levels of prices, picks a mix of places (locations) and a mix of TV, radio, websites, etc. (promotion). Product is any physical good, service, or idea that satisfies a want or need plus anything that would enhance the product in the eyes of consumers, such as the brand. Price: the money or other consideration (including other goods and services) exchanged for the ownership or use of a good or service. Place - Sometimes referred to as location, or distribution, is about the where and how it got there for the product. Promotion is all of the techniques sellers use to motivate customers to buy their products. Includes advertising, personal selling, public relations, and various sales promotion efforts, such as coupons and samples. 12 ELEMENTS IN THE MARKETING MIX MARKET RESEARCH PROCESS Define the question (problem or opportunity) and determine the present situation. Collect research data (primary or secondary sources) Analyze the data, objectively without bias towards desired results. Choose the best solution and implement it. 13 Secondary Data Company Records Government Agencies Trade Associations Research Companies Primary Data Personal Interviews Surveys Observations Focus groups Sources of marketing research information 14 Analyze Customer Needs/Satisfaction Analyze Markets & Opportunities Analyze Effectiveness of Strategy/Tactics Analyze Goal Achievement Uses of market research 15 B2C – Business to consumer B2C - The consumer market consists of all individuals or households that want goods and services for personal consumption or use and have the resources to buy them. Because consumer groups differ greatly in age, education level, income, and taste, a business usually cannot fill the needs of every group. Therefore, it must first decide which groups to serve Dividing the total market into several groups whose members have similar characteristics is called market segmentation. Selecting which groups (market segments) an organization can serve profitably is called target marketing. 16 Segmenting the consumer market Geographic Segmentation - Dividing the market by geographic area. Demographic Segmentation - Dividing the market by age, income, and education level. Psychographic Segmentation - Dividing the market according to personality or lifestyle (activities, interests, and opinions). Behavioural Segmentation - Dividing the market based on behaviour with or toward a product. EX: Benefits Sought; Usage Rate; User Status. 17 Other market segments Niche marketing is the process of finding small but profitable market segments and designing or finding products for them. One-to-one (individual) marketing means developing a unique mix of goods and services for each individual customer. Relationship marketing tends to lead away from mass production and toward custom-made goods and services. The goal is to keep individual customers over time by offering them new products that meet their requirements exactly. 18 Consumer decision making 19 Consumer B2B - Business to business B2B market consists of all individuals and organizations that want goods and services to use in producing other goods and services or to sell, rent, or supply goods to others B2B marketers include manufacturers, intermediaries such as retailers, institutions (e.g., hospitals, schools, and charities), and the government. (a separate category for government could be called B2G.) 20 Characteristics of the B2B market The number of customers in the B2B market is relatively few, compared to the more than 33 million potential customers in the Canadian consumer market. The size of business customers is relatively large, a few large organizations account for most of the employment and production of various goods and services. B2B markets tend to be geographically concentrated, marketing efforts may be concentrated in a particular geographic area. Business buyers are generally thought to be more rational (as opposed to emotional) than the ultimate consumers in their selection of goods and services. B2B sales tend to be direct. There is much more emphasis on personal selling in B2B markets than in consumer markets. 21