Marketing Chapter 13

Chapter 13 - Marketing: Helping Buyers Buy

• Marketing is defined as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings with value for customers, clients, partners, and society at large.
• Historically, marketing focused on helping sellers sell. Modern marketing emphasizes helping buyers buy.
• Modern marketing involves strategies that assist buyers, like websites providing price comparisons and product information, blogs and social media fostering customer relationships, and interactive tools enabling informed buying decisions.
• Helping buyers often benefits sellers as satisfied customers are more likely to return.

Evolution of Marketing

• Production Era: Focused on producing as much as possible, assuming limitless demand. Profitable because of limited production capacity.
• Selling Era: Mass production became common. Focus was on persuading consumers to buy through heavy advertising and selling.
• Marketing Concept Era: Post-WWII consumer spending boom signaled the need for responsive business practices. Customer orientation, service orientation, and profit orientation became integral parts of business strategy.
• Customer Relationship Management (CRM) Era: Businesses aim to learn as much as possible about customers, satisfying or exceeding their expectations to build lasting relationships and foster loyalty.
• Emerging Mobile/On-Demand Marketing Era: This era acknowledges consumers' strong desire for interaction, information retrieval, and personalized experiences, all within a seamless digital environment.

Nonprofit Organizations and Marketing

• Nonprofit marketing activities include fundraising, resource acquisition, promoting messages, attracting members, and raising awareness about social issues.

The Marketing Mix (4 Ps)

• Product: Any physical good, service, or idea satisfying wants or needs, plus potential enhancements to improve consumer appeal. Includes test marketing to assess potential consumer acceptance.
• Price: Setting a price appropriate for product features, competitor pricing, production costs, distribution, and promotion.
• Place: Ensuring product availability at convenient places where consumers want to buy it. Intermediaries play a critical role in making products accessible.
• Promotion: Communicating product value to potential customers, convincing them to buy through various methods (advertising, personal selling, public relations, publicity, word-of-mouth, sales promotions).

Marketing Research

• Definition: Analyzing markets to identify opportunities, challenges, and information needed to make effective business decisions.
• Purpose: It aids in understanding past consumer preferences, identifying future product needs, and recognizing business trends. It also enables businesses to assess environmental factors impacting profitability.
• The Marketing Research Process:
  • Define the problem/opportunity and current situation.
  • Collect research data. (secondary data, primary data).
  • Analyze the data.
  • Choose a solution and implement it.
• Secondary data: Information previously gathered by others and usually accessible online (journals, books).
• Primary data: Information collected by the company itself, using methods like surveys, interviews, and focus groups.
  • Focus group: A small group of individuals who communicate opinions and respond to discussion leader guidance.

The Marketing Environment

• Environmental Scanning: Identifying factors impacting marketing success.
• Influences: Economic factors (GDP), technological factors (computers, telecommunications), competitive factors (price, service), sociocultural factors (population values), and global factors (trends).

Two Different Markets: Consumer and Business-to-Business (B2B)

• Consumer market: Individuals or households buying goods and services for personal use.
• Business-to-business (B2B) market: Businesses or organizations purchasing goods or services for use in producing other goods or services or for resale / supply.

The Consumer Market

• Key concepts like market segmentation (dividing the market into groups sharing characteristics), target marketing (focusing efforts on particular segments), geographic segmentation (dividing based on location), demographic segmentation (dividing by age, income, education), psychographic segmentation (dividing by values, attitudes, and interests), benefit segmentation (focusing on product benefits), and volume/usage segmentation are crucial tools for analyzing and tailoring marketing strategies.
• Reaching smaller market segments:
• Niche marketing: Identifying small, profitable market segments and developing products/services for them.
• One-to-one marketing: Tailoring marketing strategies and offers for each individual consumer.
• Building marketing relationships:
• Mass marketing: Developing products/promotions appealing to large groups of people.
• Relationship marketing: Building and maintaining long-term customer relationships by meeting individual needs.
• The Consumer Decision-Making Process: Recognizing the stages involved (problem recognition, information search, evaluating alternatives, purchase decision, post-purchase evaluation). Factors Affecting Consumer Behavior include:
• Learning: Experience drives consumer behavior.
• Reference Groups: Role models impact preferences.
• Culture: Shared beliefs and values influence choices.
• Subculture: Group affiliations (ethnic, religious, etc.) affect purchasing.
• Cognitive Dissonance: Buyer's remorse after a purchase.

The Business-to-Business (B2B) Market

• B2B marketers: Include various entities (e.g., manufacturers, retailers, hospitals, schools, nonprofits, and government).
• Nature of B2B Products: Often sold and resold before reaching final consumers.