Assignment 3
dopphh12
Ch1Introduction2.ppt© South-Western, Cengage Learning. All rights reserved.
An Overview of Strategic Marketing
Chapter 1: Marketing Strategy and Customer Relationships
objectives
LEARNING
1–*
- To be able to define marketing as focused on customers
- To identify some important marketing terms, including target market, marketing mix, marketing exchanges, and marketing environment
- To become aware of the marketing concept and marketing orientation
- To understand the importance of building customer relationships
- To recognize the role of marketing in our society
1–*
Defining Marketing
- The process of creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers and develop and maintain favorable relationships with stakeholders in a dynamic environment.
© South-Western, Cengage Learning. All rights reserved.
1–*
COMPONENTS OF STRATEGIC MARKETING
figure 1.1
1–*
Marketing Focuses on Customers
The purchasers of organizations’ products,
the focal point of all marketing
1–*
Target Market
A specific group of customers on whom an organization focuses its marketing efforts
- Crocs now offers styles specific to each target market.
Courtesy crocs.com.
The Four Ps…
Otherwise known as the Marketing Mix
Four marketing activities—product, distribution, promotion, and pricing—that a firm can control to meet the needs of customers within its target market. They are variables because they respond to company needs/requirements.
1–*
1–*
The Marketing Mix Variables
1–*
Product Variable
Goods
Services
Ideas
1–*
Think about it…
- Is this ad demonstrating
a product,
a service or
an idea?
Courtesy Norwegian Cruise Lines.
1–*
The Distribution Variable
- Make products available in quantities desired
- Minimize costs:
- Inventory
- Transportation
- Storage
- Select/Motivate intermediaries
- Establish/Maintain inventory control
- Develop/Manage transportation &
storage systems
1–*
The Promotion Variable
- Inform individuals or groups about the organization and its products/services
- Advertising
- Public relations
- Personal selling
- Promotions
- Street teams
- Viral marketing
1–*
The Price Variable
- Determining product prices
- Determines the value
of the exchange.
© Used By Permission.
Who are Wal-Mart’s target customers?
- Lower to middle-class Americans
- Blue-collar - people who work in the trades
- Limited or fixed income
- Young families to the elderly
1–*
The Marketing Mix
Begins with
defining the target
market’s needs.
1–*
Customer
Needs
What are their needs?
- Affordability
- Value
- Price
- Quality
- Variety
- One-stop shopping
1–*
- Wal-Mart must first define the target market and their needs.
- After this has been determined it can proceed to establish its unique marketing mix.
.
1–*
.
1 | *
The Marketing Mix
Customer
Needs
Product
Price
Promotion
Distribution
*
The Distribution Variable
In dealing with the distribution variable, a marketing manager makes products available in the quantities desired to as many target market customers as possible, keeping total inventory, transportation, and storage costs as low as possible.
1 | *
Customer
Needs
The Marketing Mix
Product
*
A product can be a good, a service, or an idea.
Good—a physical entity you can touch
Service—the application of human and mechanical efforts to people or objects to provide intangible benefits to customers
Idea—concept, philosophy, image, or issue
The product variable also involves creating or modifying brand names and packaging and may include decisions regarding warranty and repair services.
Product variable decisions and related activities are important because they are directly involved with creating products that meet customers’ needs and wants.
.
1 | *
Product variable
What types of products satisfy the target market’s need for value and price?
- National brands at 15 - 20% reductions.
- Hanes, Proctor & Gamble, Black and Decker, Sony, major electronic firms, and other well-known national products.
- Financial services such as credit cards, debit cards, bill payment, money transfers, check cashing and check printing. Walmart offers a store credit card without an annual fee.
- Increased range of organic options and fresh produce.
- Wide assortment but limited within product categories.
.
1 | *
Customer
Needs
Product
The Marketing Mix
Price
*
The Price Variable
The price variable relates to decisions and actions associated with establishing pricing objectives and policies and determining product prices. Price is a critical component of the marketing mix because customers are concerned about the value obtained in an exchange.
Marketing mix variables are often viewed as controllable because they can be modified; however, economic conditions, competitive structure, or government regulations may limit how much marketing managers can alter them.
..
1 | *
Price variable
- Wal-Mart is a discounter. Its advertised products are lower than that of the competition, e.g., grocery and department stores.
- Uses psychological pricing or odd-even prices, e.g., $9.79 instead of $10.00
- They buy in large quantities to achieve discounts and economies of scale.
- An efficient supply chain allows retailers to pass down cost savings to their customers; Wal-Mart eliminates the middle-man.
..
Price Variable, con’t
- Wal-Mart matches local prices at most stores.
- Walmart is getting aggressive with price matching, offering identical prices to Amazon on more than half (53%) of all products.
1–*
.
1 | *
Customer
Needs
Product
Price
The Marketing Mix
Promotion
.
*
The Promotion Variable
The promotion variable relates to activities used to inform individuals or groups about an organization and its products.
Promotion can be aimed at increasing public awareness of an organization and of new or existing products.
Promotional activities can also educate customers about product features or urge people to take a particular stance on a political or social issue.
1 | *
Promotion variable
- Their advertising media ranges from TV ads, billboards, social media, and even their eCommerce platform.
- Designs advertising campaigns that support its low price image - ‘falling prices.’
- “Save Money, Live Better”
- Focuses on employment of the average American…the Wal-Mart greeter.
- Meets the needs of the average American family on a tight budget.
- Increasing hourly wage in 2018.
..
1 | *
The Marketing Mix
Customer
Needs
Product
Price
Promotion
Distribution
..
*
The Distribution Variable
In dealing with the distribution variable, a marketing manager makes products available in the quantities desired to as many target market customers as possible, keeping total inventory, transportation, and storage costs as low as possible.
.
1 | *
Distribution variable
- State-of-the-art warehousing facility in San Marcos, Texas.
- Now adding Neighborhood Markets and Walmart Express stores; going after Dollar Stores’ business; purchased Jet.com to improve its online business.
- Strategic geographic location of physical outlets is also an important part of marketing strategy.
.
*
Distribution Variable, con’t
- No longer the largest retailer but solid growth in key international markets, including Mexico and Canada; a sharpened focus in China.
- Now combines store accessibility with eCommerce site.
1–*
The marketing mix, then, works to
1. meet the needs of a particular target market
2. through product, price, promotion, and distribution strategies
3. aimed to attract, capture, and retain this market.
.
1–*
.
Value Driven Marketing
- Value
- A customer’s subjective assessment of benefits relative to the costs in determining the worth of a product
- Customer value = customer benefits – customer costs
- Customer benefits
- Anything desired by the customer that is received in an exchange
- Customer costs
- Anything a customer gives up in an exchange for benefits
- Monetary price of the benefit
- Search costs (time and effort) to locate the product
- Risks associated with the exchange
1–*
1–*
Relationships with Customers
- Exchange
- The provision or transfer of goods, services, or ideas in return for something of value
Figure 1.2 – Exchange Between Buyer and Seller
1–*
Marketing Environment
Marketing Environment
These forces affect a marketer’s ability to facilitate value-driven exchanges in three ways:
1. Influence customers by affecting their lifestyle, standards of living, and preferences and needs for products
2. Help to determine whether and how a marketing manager can perform certain marketing activities
3. The marketing environment affects a marketing manager’s decisions and actions by influencing buyers’ reactions to the firm’s marketing mix
Prius
1–*
Prius
Marketing Environment
- Effects of these forces on buyers/sellers can be dramatic and difficult to predict
- Impact on value can be extensive as market changes can affect how consumers perceive certain products
- Unlike marketing mix variables, a firm has little control over marketing environment forces
1–*
.
1–*
The Marketing Concept
- A philosophy that an organization should try to provide products that satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals.
.
.
© South-Western, Cengage Learning. All rights reserved.
1–*
THE EVOLUTION OF THE MARKETING CONCEPT
figure 1.3
1–*
Marketing Orientation
An organization-wide commitment to researching and responding to customer needs.
1–*
Managing Customer Relationships
- Customer Relationship Marketing
- Establishing long-term, mutually satisfying buyer-seller relationships allowing for cooperation and mutual dependency
- Increased value of customer (loyalty) over time results in increased profitability.
Customer Relationship Marketing (CRM)
- Establishing long-term, mutually satisfying buyer–seller relationships
- Focuses on value enhancement through the creation of more satisfying exchanges
- Continually deepens the buyers’ trust in the company
- Increases the firm’s understanding of the customer’s needs
1–*
1–*
Importance of Marketing in the Global Economy
Creates
Career
Prospects
Promotes Welfare
of Consumers
and Society
Connects
People
through
Technology
Enhances
Consumer
Awareness
Fuels
the Global
Economy
Is Important
to Business
and the
Economy
Is Used by
Non-Profits
Consumes Large
Proportion of
Buyers’ Dollars
Global
Economy
1–*
Green Marketing
Involves stakeholder assessment to create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment
GE’s Tier 4 locomotive will cut particulate matter (PM) emissions by 70 percent and nitrogen oxide (NOx) emissions by 76 percent, compared to GE’s current Tier 3 machines.
1–*
Think about it….
- How does marketing benefit the United Negro College Fund?
Courtesy United Negro College Fund
© South-Western, Cengage Learning. All rights reserved.
Chapter Quiz
Marketing is best defined as
developing a product and matching it with its market.
advertising and selling products.
creating marketing mixes to facilitate satisfying exchange relationships with customers.
transferring goods to stores to make them available.
a process of bringing buyers and sellers together.
1–*
© South-Western, Cengage Learning. All rights reserved.
Chapter Quiz
A marketing manager decides what combination of variables is needed to satisfy customers’ needs for a general type of product. What are the essential variables that the marketing manager combines?
Product variables, price variables, distribution variables, and promotion variables
Marketing environment variables
Product variables and promotion variables
Product variables, price variables, and customer variables
Product variables, price variables, customer variables, and promotion variables.
1–*
© South-Western, Cengage Learning. All rights reserved.
Chapter Quiz
A pair of Nike running shoes has average marketing costs and sells for $120. Approximately how many of the buyer’s dollars go to marketing costs?
$25
$35
$60
$75
$85
1–*
© South-Western, Cengage Learning. All rights reserved.
Chapter Quiz
The focal point of all marketing activities is
profits.
promotion and selling.
the marketing concept.
customers.
competitors
1–*
© South-Western, Cengage Learning. All rights reserved.
1–*
IMPORTANT TERMS
Marketing
Customers
Target market
Marketing mix
Products
Exchanges
Stakeholders
Marketing environment
Marketing concept
Marketing orientation
Relationship marketing
Customer relationship management (CRM)
Value
Marketing management
Green marketing
The Distribution Variable
In dealing with the distribution variable, a marketing man-
ager makes products available in the quantities desired to as
many target market customers as possible, keeping total
inventory, transportation, and storage costs as low as
possible.
A
product
can be a good, a service, or an idea.
Good—a physical entity you can touch
Service—the application of human and mechanical
efforts to people or objects to provide intangible
benefits to customers
Idea—concept, philosophy, image, or issue
The product variable also involves creating or modifying
brand names and packaging and may include decisions
regarding warranty and repair services.
Product variable decisions and related activities are
important because they are directly involved with creating
products that meet customers’ needs and wants.
The Price Variable
The price variable relates to decisions and actions
associated with establishing pricing objectives and policies
and deter
mining product prices. Price is a critical
component of the marketing mix because customers are
concerned about the value obtained in an exchange.
Marketing mix variables are often viewed as controllable
because they can be modified; however, economic condi-
tions, competitive structure, or government regulations may
limit how much marketing managers can alter them.
The Promotion Variable
The promotion variable relates to activities used to inform
individuals or groups about an organization and its
products.
Promotion can be aimed at increasing public
awareness of an organization and of new or existing
products.
Promotional activities can also educate customers
about product features or urge people to take a
particular stance on a political or social issue.
