CHAPTER 3

MARKETING
Helping Buyers Buy
LEARNING GOALS
Marketing and the Marketing Concept

Marketing Mix the 4 Ps (product, price, place,

promotion)
Summary of Marketing Research Process

Environmental Scanning and its role in the

marketing process
Segmenting the Consumer Market

Business 2 Business vs. Consumer marketing

Product Lifecycle & Matrix

 NAME THAT COMPANY

Wheres the beef? As the trend toward

vegetarianism grows, this well-known company
in Canada offers a vegan version of its chicken
sandwich in 500 of its 750 stores.

Name that company!

13-3
WHAT IS MARKETING?
The process of planning and executing the
conception, pricing, promotion and
distribution of ideas, goods and services to
create exchanges that satisfy customers and
organizational objectives.

Concepts directly related to Glo-bus

decisions teams have to make
 FOUR ERAS OF U.S. MARKETING
Production Era (1850 1920)

Mass production not invented; produce what you can

market is limitless

Selling Era (1920 1970)

After mass production, focus changed to selling /

advertising

Marketing Concept Era (1950 1990)

Boom in consumerism post WWII; competition for

dollars; customer responsiveness and service

Customer Relationship Era (1990 -- present)

Learning about the customer to better satisfy them;

build long-term customer relationships (CRM systems)
APPLYING THE MARKETING CONCEPT
The Marketing Concept consists of three parts:
1. Customer Orientation -- Finding out what
customers want and then providing it
2. Service Orientation -- Making sure everyone in
an organization is committed to customer
satisfaction
3. Profit Orientation -- Focusing on goods and
services that are most profitable
FOCUS OF CONTEMPORARY MARKETING
Marketing today involves helping the customer
purchase through:

- Websites that help buyers compare prices, identify

product features and question sellers

- Blogs and social networking sites that cultivate

consumer relationships
FOCUS OF CONTEMPORARY MARKETING
THE CUSTOMER RELATIONSHIP ERA

Customer Relationship Management (CRM) --

Learning as much as you can about customers and
doing what you can to satisfy or exceed their
expectations.

Organizations seek to enhance customer

satisfaction building long-term relationships.
Today firms like Priceline and Travelocity use CRM
that allow customers to build a relationship with
the suppliers.
NONPROFIT MARKETING
Nonprofit marketing strategies include:

- Fundraising
- Public Relations
- Special Campaigns
- Emphasize Ecological practices
- Changing public opinions and
attitudes through outreach
- Increasing organizational
membership
MARKETING TO SMALL SEGMENTS
Niche Marketing -- Identifies small but profitable
market segments and designs or provide specialized
set of products for them.

E.g.: Fridgedoor.com; Golf Galaxy

One-to-One Marketing-- Developing a unique mix

of goods and services for each individual consumer.

E.g.:Tailored suits; Custom Vacation Packages; Online

Photo prints
The FOUR Ps

Marketing Mix: Set of actions and choices that a company uses to promote its
brand or product in a market
Searching For Information
Prior to 4 Ps

Assess
Find Identify Target
Feasibility of
Opportunities Market
Concept
 Precursors to 4 Ps : Market Research
Market Research- Analyzing markets to
Find
Opportunities determine challenges and opportunities, and
finding the information needed to make good
decisions.

Research is used to identify products

Assess
Feasibility of consumers have used in the past and
Concept
what they want in the future.

Research uncovers market trends and

Identify Target groups of consumers that are likely to buy.
Market
Also helps uncover attitudes held by
company insiders and stakeholders.
 FOUR STEPS IN THE MARKETING
RESEARCH PROCESS
1. Define problem or opportunity and determine
current situation.

2. Collect research data.

3. Analyze data.

4. Choose the best solution and alternatives.

Make recommendations for implementation.
 FOUR STEPS IN THE MARKETING
RESEARCH PROCESS (contd)
1. Define problem /or opportunity
Need to discover

What the present situation is

What the problems/opportunities are

What are the alternatives

Information Needed

How to get and analyze data

 FOUR STEPS IN THE MARKETING
RESEARCH PROCESS (contd)
2. Collect and research data.

Data sources:
Primary Sources: Data collected directly
Interviews, Surveys, Focus Groups, customer
comments & letters

Secondary Sources: Existing Data

Government Publications, commercial publications
like AC Nielson, or journals specialized for the
industry, Magazines, Newspapers, Internal Sources
primarily financial data, internet searches
 FOUR STEPS IN THE MARKETING
RESEARCH PROCESS (contd)
3. Analyze the Data

Marketers must turn data into useful information.

Must use their analysis to plan strategies and make

recommendations.
4. Choose the Best Solution for Implementation

Continuous follow-up to see if implementation by

marketing team was successful, if not take
corrective action.
Marketing Research: continuous process
responding to changes in marketplace.
Quick Quiz
1. The focus of the production era was on market research
and advertising
a) True b) False

2. Which of the following statements is most consistent

with today's views on effective marketing?

A. "There's a sucker born every minute."

B. "Find out what your competition does and do it better."
C. "A good promotional campaign can sell anything."
D. "Learn about your customers and exceed their
expectations."
Marketing Mix | 4 Ps
DEVELOPING A PRODUCT
Product -- A good, service, or idea that satisfies a
consumers want or need.
Test Marketing -- Testing
product concepts among
potential product users.

Brand Name -- A word,

letter, or a group of words
or letters that differentiates
one sellers goods from a FOCUS GROUP
competitor. (Coke vs.
Pepsi)
PRICING
Pricing factors: Depends on

- Competitors prices

- Total Production costs (yours + outsourcing)

- Distribution

- Product positioning - high or low strategy

- Economic conditions

- Tactical vs. strategic decisions (Short vs. Long)

PLACE DISTRIBUTION STRATEGY
Brick & Mortar stores only vs. Internet only or
both together (Department stores)
Wholesalers or independents (indirect) vs. direct
sales
Eg. Hardware store chain to specialized stores
or direct to consumers
Distributors act as intermediaries

Limiting availability through licensed dealers

Anderson windows & replacement windows

# of stores & location; (store on every corner

Chase, Citi, Starbucks vs. outlet malls)
PROMOTION
Promotion -- All the techniques sellers use to inform
people about their products and motivate them to
purchase those products.

Promotion includes:

- Advertising

- Personal selling

- Public relations

- Word of mouth

- Sales promotions:
- Coupons, rebates, samples, % off deals, etc.,.
Establishing the Promotion Budget
Key Considerations

4 Ps can extend to include Packaging, Positioning or Pull

Developing a Marketing Plan
Elements Include:
Environmental Scanning :
opportunities/threats(OT)
Marketing Mix - 4 Ps (SWOT) strengths,
weaknesses, opportunities, threats
Market segmentation & identify target
market
Implementation / Execution (Long/short term)
Exploit Os; mitigate the Ts
Leverage Ss; overcome & eliminate Ws
SCANNING the MARKETING
ENVIRONMENT
Managers must be aware of surrounding operating
environment when making marketing mix decisions
Environmental Scanning -- The process of
identifying factors that affect marketing success

Factors include:
- Global factors
- Technological factors
- Socio-cultural factors
- Competitive factors
- Economic factors
The Market Environment

To effectively understand the marketing environment, it is critical companies

continually scan the environment and integrate with 4Ps
SEGMENTING THE CONSUMER MARKET
A firm can divide the whole consumer market in several
ways

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.
SEGMENTING THE CONSUMER MARKET
(contd)

Benefit Segmentation -- Dividing the market

according to product benefits the customer perceives
and prefers.
Convenience, Durability, Comfort, Safety, Luxury etc.

Volume (Usage) Segmentation -- Dividing the

market by the volume of product use.

Heavy users, Light Users, Non users

Loyalty: Strong, Medium, None
Quick Quiz
1. Designing a want-satisfying product is part of the marketing
mix.
a) True b) False

2. The process of identifying the factors that can affect marketing

success is called environmental scanning.
a) True b) False

3. __________ consists of all the techniques sellers use to

persuade consumers to buy their goods and services.

A. Advertising
B. Promotion
C. Pre-selling
D. Segmentation
Activity

Think of your neighborhood

Which of your needs are not being met by businesses
and/or non-profits in your area?

Are there enough people with similar needs to attract an

organization that would meet those needs

How would you find out?

 STEPS in the CONSUMER DECISION-MAKING
PROCESS
1. Problem recognition

2. Search for information

3. Evaluating alternatives

4. Purchase decision

5. Post-purchase evaluation

The field of study of consumer thought processes and behavior at each stage
in a purchase is called consumer behavior.
The CONSUMER DECISION MAKING PROCESS
AND OUTSIDE INFLUENCES
The CONSUMER and B2B MARKET
Consumer Market -- All the individuals or households
that want goods and services for personal use and
have the resources to buy them.

Business-to-Business (B2B) -
- Individuals and organizations
that buy goods and services to
use in producing other goods
and services or to sell, rent, or
supply to others.
BUSINESS-to-BUSINESS MARKET
(B2B)
B2B companies markets to:
- Manufacturers
- Wholesalers and retailers
- Hospitals, schools and charities
- Government

Products are often sold and resold several times

before reaching final consumers
B2B MARKET DIFFERENCES
1) Relatively few customers

2) Customers tend to be large buyers

3) Markets are geographically concentrated

4) Buyers are more rational than emotional

5) Sales are mostly direct

6) More complex products; frequently requires

customization

7) Promotions focus heavily on personal selling

 MASS MARKETING vs. RELATIONSHIP
MARKETING
Two Approaches to Marketing
Mass Marketing -- Developing products and
promotions to please large groups of people.
Little market segmentation

Relationship Marketing-- Rejects the idea of mass

production and focuses toward custom-made goods
and services for customers.
Product Life Cycle
High Stages

Introduction Growth Maturity Decline

Strong sales
growth, profits,
Sales Volume

new
Focus on competition, Demand
customer heavy mktg begins to
awareness. expenses slow, fewer
High mktg. Demand
or no new
costs to decreases,
entrants.
promote sales
Good
product decline,
profits,
lower price new prod.
Low
Time
 Product Portfolio Management Models
Market growth serves as a proxy for industry attractiveness, and
relative market share serves as a proxy for competitive
advantage.
BCG Growth Share Matrix
Dogs have small market
High shares and no growth
prospects.
Stars Question
Cash cows have large
Market Growth Rate

marks
shares of mature markets.
Question marks have small
market shares in quickly
Cash Cows Dogs
growing markets.
Stars have large shares of
rapidly growing markets.
Low

High Relative Market Share Low

Product Life Cycle Strategies
Introduction Growth Maturity Decline

Marketing Market Increase Defend Market Maintain

Strategy Development Market Share Share Efficiency,
Focus exploit
product
Pricing Strategy High Price, Unique Lower Price Price at or Set price to
Product, cover With passage below stay
product costs of time competitors profitable
Promotion Focus on product Appeal to Emphasize Reduce
Strategy awareness mass market brand promotion
focus on differences - expenses
brand loyalty focus on
loyalty
Distribution Use selective Build good Enlarge Be selective
Strategy outlets network of network in
outlets distribution
Product Strategies in the Cycle
Product Extension: versions of the same
product to serve a segment of target market (e.g.
Diet Coke is an extension of regular Coke), drug
with approved age range (eg. pediatric
use)extends product 6-9 months.
Product Adaptation: Modification of the basic
product and/or new or better uses for existing
product (Arm & Hammer baking soda), new
indications for drug
Reintroduction: Different markets, domestic
versus international
The FOUR Ps Cycle starts again