Understanding business 8th by mcchugh nickels chapter 13

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Marketing:
Building
Customer
Relationships

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CHAPTER

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13

Nickels

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McHugh

McGraw-Hill/Irwin
Understanding Business, 8e

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McHugh
1-1

13-1

© 2008 The McGraw-Hill Companies, Inc., All Rights


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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+
13-2


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Marketing Strategies in
Non-Profit Organizations

• Find a productive
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board of trustees
(Directors)
Make marketing the
focus; not shortterm sales
Know your mission
and review mission
strategy regularly

• Practice strategic
•
•
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planning
Carefully segment
target market
Train & develop
volunteers for longterm
Be frugal- know how
to manage finances

13-3


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Elements in the Marketing
Mix
Plac
e

Product
Marketin
g
Program

Pric

Promotio
n

Buy at
Computers
‘R Us

13-4


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Marketing Process
1. Find Opportunity
2. Conduct Research
3. Identify Target

Market
4. Design Product
5. Product Testing

6. Brand Name, Design
& Price
7. Develop Distribution
System
8. Design Promotional
Program
9. Build Relationship
With Customer

13-5


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Product Design

• Concept Test
• Test Market
• Package Design/Brand Name

13-6


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Where They Got
Their Names
Founder(s)

• Taco Bell
• Days Inn
• Bose Corp
• Ty Inc.
• Bristol-Myers
Source: World Features Syndicate

Glen Bell
Cecil Day
Amar Bose
Ty Warner
William Bristol
& John Myers
13-7


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Pricing Strategies

• Cost-Plus

• Value-Based
• Competitive
• Going-Rate
Source: Perdue University, May 2005

• Skimming
• Discount
• Loss-Leader
• Psychological
13-8


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Other Things To Keep
In Mind With Price
• Payment Period
• Price Differences
• Target Customers
• Allowances
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Regular
Seasonal

Bundling
Trade Discounts
Price Flexibility
Credit Terms

Source: Perdue University, May 2005

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Geographic Areas

Volume Discounts
and Wholesale
Pricing
Cash and Early Pmt
Discount

13-9


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Place Decisions

• Direct Sales
• Reseller Sales
• Market Coverage
• Intensive
• Selective
• Exclusive

• Inventory Size
• Logistics
Source: Perdue University, May 2005

13-10


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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

13-11


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Market Research Process

• Define the Question
• Collect Data
• Analyze the data
• Choose the best solution and
implement

13-12


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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

13-13


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Sources for Marketing
Research Information
Secondary Data

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Government
Publications
Commercial
Publications
Magazines
Newspapers
Internal/General
Sources

Primary Data
• Surveys
• Focus groups
• Interviews
• Observation
• Online surveys
• Questionnaires
• Customer comments

13-14


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The Marketing Environment
Economic
Competitiv
e

Technolog
y

Custome
r
Social

Global
13-15

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Why Should You
Market To Women?

• Women control 80% of all household
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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 selfemployed.

Source: St. Louis Small Business Monthly, May 2004

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Different Markets

• Consumer

• Niche
• One-to-One

• Business-to-

Business (B2B)
13-17


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Market Segmentation

• Target Marketing
• Geographic
• Demographic
• Psychographic
• Benefit
• Volume
13-18

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Influences on
Consumer Behavior
Culture
Reference

Learning

Group

Custome
r
Cognitive
Subcultur
e

Dissonance
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Consumer Decision Making
Sociocultural

Sociocultural

Marketing
Marketing mix
mix

Reference
••Reference
groups
groups
Family
••Family

••Product
Product
••Price
Price
••Place
Place
••Promotion
Promotion

Socialclass
class
••Social
Culture
••Culture

Decision-Making
Psychological Process

Psychological
Perception
••Perception
Attitudes
••Attitudes

•Problem Recognition

Learning
••Learning
Motivation
••Motivation

•Alternative evaluation

•Information Search
•Purchase decision

Subculture
••Subculture

Situational
Situational
••Type
Typeof
ofPurchase
Purchase
••Social
Socialsurroundings
surroundings

••Physical
Physical
surroundings
surroundings

••Previous
Previous
•Postpurchase evaluation experience
experience

13-20


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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

13-21

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Business-to-Consumer
E-Commerce as % of Sales

Source: U.S. Census, May 18, 2006; accessed August 5, 2006

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Business-to-Business (B2B)

1.Number
2.Size
3.Geographic

Concentration
4.Rational

5.Direct Sales
6.Personal Selling
13-23

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Top Marketing Tactics of
Small Businesses

Source: Investor’s Business Daily, June 1, 2004

13-24