Chapter 13
I. WHAT IS
MARKETING?
LEARNING GOAL 1.
Define marketing and summarize the steps involved in the marketing process.
A. MARKETING is the
process of determining customer wants and needs and then providing customers
with goods and services that meet or exceed their expectations.
B. FIND A NEED AND
FILL IT-A more simple description of the marketing process.
1. In the past, it
was believed that businesses made products first and marketing was then
responsible for selling and distributing those products.
2. Today, marketing
must determine what consumers want and then to provide goods and services that
fill those needs.
C. NONPROFIT
ORGANIZATIONS USE MARKETING ALSO.
1. Marketing is a
crucial part of almost all organizations, profit and nonprofit.
2. Charities,
churches, politicians, states, and many other organizations all use marketing.
II. UNDERSTANDING
THE MARKETING PROCESS.
A. To present an
overview of the marketing process, the text takes a hypothetical product (a
cereal called FIBERRIFIC) through THE MARKETING PROCESS.
B. The process
begins with identifying a need for fast, nutritious, good tasting breakfast
food through MARKET RESEARCH.
C. DESIGNING A
PRODUCT TO MEET NEEDS.
1. The next step is
to develop a product to fill that need.
2. A PRODUCT is any
physical good, service, or idea that satisfies a want or need.
3. CONCEPT TESTING
involves developing an accurate description of your product and asking people
whether or not the concept (the idea of the cereal) appeals to them.
4. PROTOTYPES are
samples of the product that you take to consumer to test their reactions.
5. TEST MARKETING
is the process of testing products among potential users.
6. OUTSOURCING is
the allocation of production and other functions to outside firms.
7. Once the product
is made, you have to DESIGN A PACKAGE, think up a BRAND NAME for the product,
and set a PRICE.
D. GETTING THE
PRODUCT TO CUSTOMERS.
1. Once the product
is manufactured, you have to choose how to get it to the consumer.
2. You may want to
sell your product through organizations that specialize in distributing food
products-MARKETING MIDDLEMEN.
E. ESTABLISHING A
RELATIONSHIP WITH CUSTOMERS.
1. PROMOTION
consists of all the techniques sellers use to motivate people to buy products
or services.
2. RELATIONSHIP
BUILDING WITH CUSTOMERS includes responding to any suggestions they may make to
improve the product or the marketing of the product.
3. Marketing is an
ONGOING PROCESS.
III. TOTAL QUALITY
AND THE MARKETING CONCEPT.
LEARNING GOAL 2.
Describe marketing's changing role in society and the merging of the marketing
concept with total quality management.
A. THE MARKETING
CONCEPT.
1. The baby boom
after WWII created a tremendous market.
a. Businesses
scrambled to capture their share.
b. Businesses knew
they needed to respond to consumers need.
2. The MARKETING
CONCEPT emphasizes
a. A CONSUMER
ORIENTATION.
b. A SERVICE
ORIENTATION-the training of employees from all departments in customer service.
c. A PROFIT
ORIENTATION.
3. During the 1980s
businesses began to more aggressively to apply the marketing concept.
4. In the 1990s,
they extended the concept by adopting the concepts of total quality management
(TQM).
B. FROM A CUSTOMER
ORIENTATION TO DE LIGHTING CUSTOMERS AND OTHER STAKEHOLDERS.
1. Marketing's goal
in the past was to provide customer satisfaction.
2. Today the goal
of total quality firms is to please or DELIGHT CUSTOMERS by providing goods and
services that exactly meet their requirements.
3. TQM is an
extension of the marketing concept.
4. Most
organizations haven't yet reached the goal of delighting customers.
5. Firms must also
please and delight their INTERNAL CUSTOMERS-employees.
C. FROM TRAINING
ALL EMPLOYEES TO UNITING ORGANIZATIONS.
1. In
quality-oriented firms, CROSS-FUNCTIONAL TEAMS break down barriers between
departments and practice continuous improvement.
2. Determining
whether or not the various organizations are providing world-class service and
quality is done through competitive benchmarking.
3. COMPETITIVE
BENCHMARKING means that companies compare their processes and procedures
against the best companies in the industry.
D. MAINTAINING A
PROFIT ORIENTATION.
1. Marketing must
make sure that everyone in the organization understands that the purpose behind
delighting customers IS TO ASSURE A PROFIT for the firm.
2. Using that
profit, the organization can then satisfy other stakeholders of the firm.
IV. RELATIONSHIP
MARKETING.
LEARNING GOAL 3.
Describe how relationship marketing differs from traditional marketing.
A. Balancing the
wants and needs of all the firm's stakeholders is a huge challenge for
marketing.
1. RELATIONSHIP
MARKETING is establishing and maintaining mutually beneficial exchange
relationships with internal and external customers and all the other
stakeholders of the organization.
2. Many companies
have responded to the environmental movement by introducing GREEN PRODUCTS,
those whose production, use, and disposal doesn't damage the environment.
B. THE MOVEMENT
AWAY FROM MASS MARKETING.
1. MASS MARKETING
means developing products and promotions that are designed to please large
groups of people.
a. The mass
marketer tries to sell products to as many people as possible.
b. That means using
mass media, such as TV, radio, and newspapers.
c. One-way messages
in mass media give way to a personal dialogue among participants.
2. Relationship
marketing is more concerned with retaining old customers than creating new
ones.
3. RELATIONSHIP
MARKETING moves away from mass production toward CUSTOM-MADE GOODS.
4. 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.
C. FROM RELATIONSHIP
MARKETING TO FORMING COMMUNITIES OF BUYERS.
1. A database can
be established so that every contact with consumers results in more information
about them.
2. Over time, the
seller knows more and more about consumers and can custom-design products to meet
their specific needs.
3. Many companies
have established Web sites where customers can provide their input and talk to
other customers.
4. An important
next step in relationship marketing is to establish a community of customers.
V. MARKETING
MANAGEMENT AND THE MARKETING MIX.
LEARNING GOAL 4.
List the four Ps of marketing.
A. Marketing
managers are responsible for getting everyone in the firm to establish and
maintain mutually beneficial relationships with all stakeholders.
1. A MUTUALLY
BENEFICIAL EXCHANGE means that both parties to the exchange believe they have
received good value for their efforts.
2. Managing the
marketing process involves FOUR FACTORS:
a. Designing a
want-satisfying PRODUCT.
b. Setting a PRICE
for the product.
c. Distributing the
product to a PLACE where people will buy it.
d. PROMOTING the
product.
B. These four
factors have become known as the FOUR Ps OF MARKETING or the MARKETING MIX.
C. The environment
of marketing is rapidly changing, so marketers must make changes faster.
D. MARKETING
MANAGEMENT is the process of planning and executing the conception, pricing,
promotion, and distribution [place] of ideas, goods, and services [products] to
create mutually beneficial exchanges.
VI. DETERMINING
WHAT CUSTOMERS WANT.
LEARNING GOAL 5.
Apply the four parts of the marketing research process to a business problem.
A. MARKETING
RESEARCH is the analysis of markets to determine opportunities and challenges.
1. One goal is to
determine exactly what consumers want and need.
2. Because consumer
wants and needs are constantly changing, marketing must maintain close
relationships with customers.
3. Businesses need
information to compete effectively, and marketing research is the activity that
gathers that information.
B. THE MARKETING
RESEARCH PROCESS.
1. STEP 1. DEFINE
THE PROBLEM AND DETERMINE THE PRESENT SITUATION.
2. STEP 2: COLLECT
DATA.
a. Research can be
quite expensive, so SOME TRADE-OFF must be made between information needs and
the cost.
b. SECONDARY DATA
are sources of information that have been published previously (journals, trade
associations, etc.).
c. Usually
secondary research doesn't provide all the necessary information, so marketers
must do their own studies.
d. PRIMARY DATA are
facts and figures not previously published that you gather for a specific
purpose.
(i) Telephone
surveys, mail surveys, and personal interviews are the most common methods of
gathering survey information.
(ii) A FOCUS GROUP
consists of a small group of people who meet under the direction of a
discussion leader to communicate their opinions about an organization or its
product.
3. STEP 3: ANALYZE
THE RESEARCH DATA.
4. STEP 4: CHOOSE
THE BEST SOLUTIONS.
a. Researchers
present alternative strategies and make recommendations as to which strategy
may be best.
b. Consumers are
becoming more demanding for ethical behavior from companies.
5. The last steps
in a research effort involve FOLLOWING UP on the actions taken to see if the
results were as expected.
C. USING RESEARCH
TO UNDERSTAND CONSUMERS.
1. The secret to
understanding consumers is simply to listen to them.
a. There are many
techniques for doing that, including focus groups.
b. Effective
marketing research calls for getting close to customers to find out what they
want and need.
2. In international
markets, the need for marketing research is even greater.
a. The goal in
international business is the same as in the U.S.: to find a need and fill it.
b. To do that,
marketers must adapt to all the customs and beliefs of the people they are
dealing with.
3. One way to do
marketing research is to set up a Web site where customers can interact with
the company and with each other.
D. THE CONSUMER
DECISION-MAKING PROCESS.
1. Studying
consumer behavior centers around studying the CONSUMER PURCHASE DECISION
PROCESS:
a. PROBLEM
RECOGNITION.
b. INFORMATION
SEARCH.
c. EVALUATE
ALTERNATIVES.
d. MAKE PURCHASE
DECISION.
e. POST-PURCHASE
EVALUATION.
2. Marketing
researchers investigate consumer thought processes and behavior at each stage.
3. CONSUMER
BEHAVIOR IS INFLUENCED BY:
a. CULTURE is the
set of values, attitudes, and ways of doing things that are transmitted from
one generation to another.
b. LEARNING
involves changes in an individual's behavior resulting from previous
experiences.
c. REFERENCE GROUP
is the group that an individual uses as a reference point in forming beliefs,
attitudes, or behavior.
d. SUBCULTURE is
the set of values, attitudes, and ways of doing things that result from belonging
to a certain group with which one identifies.
4. COGNITIVE
DISSONANCE means that after the purchase, consumers may have doubts about
whether they got the best product at the best price.
VII. RECOGNIZING
DIFFERENT MARKETS: CONSUMER AND BUSINESS-TO-BUSINESS.
LEARNING GOAL 6.
Differentiate between consumer and industrial markets.
A. THERE ARE TWO
MAJOR MARKETS:
1. The CONSUMER
MARKET consists of all the individuals who want goods and services for personal
consumption or use.
2. The
BUSINESS-TO-BUSINESS MARKET consists of all the individuals and organizations
that want goods and services to produce other goods and services.
3. The buyer's
reason for buying and the end use of the product determine whether it is
considered a consumer product or an industrial product.
B. THE CONSUMER
MARKET.
1. Marketers must
learn to select different consumer groups to develop products and services
specially tailored to their needs.
2. The process of
dividing the total market into several groups (segments) that have similar
characteristics is called MARKET SEGMENTATION.
3. TARGET MARKETING
is the process by which an organization decides which groups (market segments)
it can serve profitably.
C. REACHING SMALLER
MARKET SEGMENTS.
1. New
manufacturing techniques make it possible to develop specialized products for
small market groups.
2. NICHE MARKETING
is the process of finding small, but profitable market segments and designing
custom-made products for those groups.
3. ONE-TO-ONE
MARKETING means developing a unique mix of goods and services for each
individual customer.
4. This is easier
to do in industrial markets, but mass customization is making it possible to do
so in consumer markets.
D.
BUSINESS-TO-BUSINESS MARKETING.
1. The marketing of
goods and services to manufacturers, institutions, commercial operations, and
the government is called BUSINESS-TO-BUSINESS MARKETING.
2. Several factors
make BUSINESS-TO-BUSINESS MARKETING DIFFERENT
a. There are
relatively FEW INDUSTRIAL CUSTOMERS compared to consumers.
b. Though few in
number, industrial customers are VERY LARGE.
c. Industrial
markets tend to be CONCENTRATED in certain areas of the country.
d. Industrial
buyers are generally MORE RATIONAL in their purchase decisions.
e. Industrial sales
tend to be DIRECT.
3. Relationship
marketing has always been important in the business-to-business market.
4. In
business-to-business marketing it is more important to establish and maintain
friendly and committed relationships than to simply make the sale.
E. CAREER PROSPECTS
IN MARKETING.
1. Marketing
careers include jobs in retailing, wholesaling, marketing research, and product
management, selling, advertising, sales promotion.
2. Other areas
include public relations, transportation, storage, international distribution,
and other areas.