CH.

11
MARKETING:
BUILDING PROFITABLE
CUSTOMER CONNECTIONS
11-1 Marketing: Getting Value by Giving
Value
 The American Marketing Association defines
marketing as the activity, set of institutions, and processes for
creating, communicating, delivering, and exchanging offerings that
have value for customers, clients, partners, and society at large.
 Utility: The ability of goods and services to satisfy consumer “wants.”
 Form utility
 Time utility
 Place utility
 Ownership utility
 The Scope of Marketing: It’s Everywhere!
 Goods Marketing
 Services Marketing
 People Marketing
 Place Marketing
 Event Marketing
 Idea Marketing
 11-2 The Customer : Front and Center
 Customer relationship management (CRM):
The ongoing process of acquiring, maintaining, and
growing profitable customer relationships by
delivering unmatched/superior value.
 Limited Relationships
 Full Partnerships

 Value: A customer perception that a product

has a better relationship than its competitors
between the cost and the benefits.
 Customer satisfaction: When customers
perceive that a good or service delivers
value above and beyond their expectations.
 Customer loyalty: When customers buy a
product from the same supplier again and
again— sometimes paying even more for
it than they would for a competitive product.
 11-3 Marketing Strategy : Where Are You
Going, and How Will You Get There?
 Marketing plan: A formal document that
defines marketing objectives and the specific
strategies for achieving those objectives.

Market segmentation:
Dividing potential customers into
groups of similar people, or segments.

Target market: The group of people

who are most likely to buy a particular product.
Consumer Markets versus Business Markets

 Consumer marketers (also known as business-to- consumer or B2C): Marketers

who direct their efforts toward people who are buying products for personal consumption.

 Business marketers (also known as business-to-business or B2B): Marketers who

direct their efforts toward people who are buying products to use either directly or
indirectly to produce other products.

Consumer Markets Segmentation

 Demographic segmentation: Dividing the market into smaller groups based on
measurable characteristics about people, such as age, income, ethnicity, and gender.

 Geographic segmentation: Dividing the market into smaller groups based on where
consumers live. This process can incorporate countries, cities, or population density as
key factors.

 Psychographic segmentation: Dividing the market into smaller groups based on

consumer attitudes, interests, values, and lifestyles.

 Behavioral segmentation: Dividing the market based on how people behave toward
various products. This category includes both the benefits that consumers seek from
products and how consumers use the products.
Customer Behavior : Decisions, Decisions, Decisions!
 Consumer behavior: Behavior of the final buyer who buy the
product or services for personal non-business use.
The Marketing Mix
 Marketing mix: The blend of marketing
strategies for product, price, distribution
(place), and promotion.
4 Ps of Marketing Mix
○ Product Strategy:
○ Pricing Strategy:
○ Distribution (Place) Strategy:
○ Promotion Strategy:
CH 12-PRODUCT AND PROMOTION:
CREATING AND COMMUNICATING VALUE
 Product: It’s Probably More Than You Thought
 Product: Anything that an organization offers to satisfy consumer
needs and wants, including both goods and services.

 Service: Intangible benefits that one party can offer to another and
that might satisfy a buyer need.

 Product Classification:
○ Consumer products: Products purchased for personal use or
consumption.
○ Business products: Products purchased to use either directly or
indirectly in the production of other products.
 12-2 Product Differentiation and
Planning: A Meaningful Difference
 Product differentiation: The attributes that make a good or service different from
other products that compete to meet the same or similar customer needs.

 Product Quality: How well a product performs its core functions

 Features and Benefits
Product features: Specific characteristics of a product.
Customer benefit: The advantage that a customer
gains from specific product features.

 Product Lines and the Product Mix

○ Product line: A group of products that are closely
related to each other, either in terms of how they
work, or the customers they serve.
○ Product mix: The total number of product lines and
individual items sold by a single firm.

 Brand: A product’s identity-including product name,

symbol, design, reputation, and image-that sets it
apart from other players in the same category.

 Packaging: Protect the product, provide information, facilitate storage, suggest product uses,
promote the product brand, and attract buyer attention
12-4 Promotion : Influencing Consumer Decisions

Promotion:
Marketing communication designed to influence consumer purchase
decisions through information, persuasion, and reminders.
12-6 The Promotional Mix
 12-6a Emerging Promotional Tools
○ Internet Advertising
○ Social Media
○ Native Advertising (Facebook newsfeed)
○ Product placement
○ Advergaming
○ Buzz Marketing
○ Sponsorships

 12-6b Traditional Promotional Tools

○ Advertising
○ Sales promotion
○ Public relations
○ Personal selling
Buzz marketing is a viral marketing technique focused on maximizing the word-of-mouth potential of a
campaign or product
 CH 13-DISTRIBUTION AND PRICING: RIGHT
PRODUCT, RIGHT PERSON, RIGHT PLACE,
RIGHT PRICE
 Distribution strategy: A plan for
delivering the right product to the
right person at the right place at the
right time.
○ Channel of distribution (Indirect
Distribution): The network of
organizations and processes that
links producers to consumers.
○ Direct channel: A distribution
process that links the producer and
the customer with no
intermediaries.

 Main Members of the Channel:

Retailers and Wholesalers
Supply Chain:
All organizations, processes, and activities involved in the flow
of goods from the raw materials to the final consumer.
13-5 Pricing Objectives and Strategies:
A High-Stakes Game
Pricing Strategies
 Profit margin: The gap between the cost and the price of an
item on a per-product basis.
 Penetration pricing: A new product pricing strategy that
aims to capture as much of the market as possible through
rock-bottom prices.
 Skimming pricing: A new product pricing strategy that aims
to maximize profitability by offering new products at a
premium price.
 Everyday-low pricing (EDLP): Long-term discount pricing,
designed to achieve profitability through high sales
volume.
 High/Low pricing: A pricing strategy designed to drive
traffic to retail stores by special sales on a limited number of
products, and higher everyday prices on others.
END