1. *
* 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

2. *
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

3. *
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

4. *
* Marketing Process
*
1. Find Opportunity 6. Brand Name, Design
2. Conduct Research & Price
3. Identify Target 7. Develop Distribution
Market System
4. Design Product 8. Design Promotional
5. Product Testing Program
9. Build Relationship
With Customer
13-4

5. * 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

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

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

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

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

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

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.
A PROFIT ORIENTATION: Focus on those goods and
services that will earn the most profit.
During the 1980s, business began to apply the marketing
concept more aggressively.
13-11

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

13. * 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

14. *
* Elements in the Marketing
* Mix
Product Plac
e
Marketing
Program
Buy at
Computers
‘R Us
Pric Promotion
13-14

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

16. * DESIGNING A PRODUCT TO MEET NEEDS
* First, develop a product to fill the identified need.
* A PRODUCT
is any physical good, service, or idea that satisfies a
want or need plus anything that would enhance the
product in the eye of consumers, such as the brand.
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.
TEST MARKETING
is the process of testing products among potential
users.
Next, decide which brand names should be offered to
attract customers.
13-16

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

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

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

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

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

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

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

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

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

26. * 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.
STEP 3.
Analyzing the research data
The data collected must be turned into useful
information.
Careful, honest interpretation of the data can reveal
specific marketing challenges.
13-26

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

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

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

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

31. * 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.
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, rent, or supply goods to others
(traditionally called INDUSTRIAL GOODS.)
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

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

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

34. * SEGMENTING 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.
GEOGRAPHIC SEGMENTATION
is dividing the market by geographic area.
DEMOGRAPHIC SEGMENTATION
is dividing the market by age, income, and education
level.
PSYCHOGRAPHIC SEGMENTATION
is dividing the market using the group’s values,
attitudes, and interests.
BENEFIT SEGMENTATION
is dividing the market by determining which benefits of
the product to talk about.
13-34

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

36. *
VOLUME, OR USAGE, SEGMENTATION is
* dividing the market by usage (volume of use.)
* The best segmentation strategy is to USE ALL THE
VARIABLES to come up with a consumer profile that’s
sizable, reachable, and profitable.
REACHING SMALLER MARKET SEGMENTS
NICHE MARKETING
is the process of finding small but profitable market
segments and designing custom-made products for
them.
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,
but is becoming possible in consumer markets as well.
13-36

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

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

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

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

41. *
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.
A REFERENCE GROUP
is the group that an individual uses as a reference point in
formation of his or her beliefs, attitudes, values, or behavior.
CULTURE
is the set of values, attitudes, and ways of doing things that
are transmitted from one generation to another in a given
society.
.
13-41

42. *
SUBCULTURE
* is the set of values, attitudes, and ways of doing things that
* results from belonging to a certain group with which one
closely identifies.
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.
13-42

43. *
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.
One-way messages in mass media are replaced by a
personal dialogue among participants.
The text uses two examples: service firms such as
airlines, rental car companies, and hotels; and the Hard
Rock Café.
THE CONSUMER DECISION-MAKING PROCESS
Studying consumer behavior centers on studying the
CONSUMER
13-43

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.
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

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

46. * GEOGRAPHICALLY CONCENTRATED:
* B2B markets tend to be CONCENTRATED in certain areas of
* the country.
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
business areas. 13-46

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

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

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

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

51. *
* 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

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

53. *
* Why Should You
* Market To Women?
• Women control 80% of all household
spending.
• Women purchase 81% of all products and
services manufactured.
• 80% of all checks written are signed by
women.
• 85% of all automobile purchases are
influenced by women.
• In 2005, 4.7 Million women were self-
employed.
Source: St. Louis Small Business Monthly, May 2004
13-53

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

55. *
* 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, February 9, 2004
13-55

56. * Business-to-Consumer
* E-Commerce as % of
*
Sales
2000
2001
2002
2003
2004
2005
0.00% 0.50% 1.00% 1.50% 2.00% 2.50%
Source: U.S. Census, May 18, 2006; http://home.earthlink.net/~lindberg_b/GECGrwth.htm, accessed August 5, 2006
13-56

57. *
* Top Marketing Tactics of
* Small Businesses
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
Web Sites Search Engine Community Public E-mail Marketing Direct Marketing
Keywords Relations Relations/Media
Coverage
Source: Investor’s Business Daily, June 1, 2004
13-57