Customer-Driven Marketing

Nature of Marketing

• Definition: A group of activities aimed at facilitating transactions by creating, distributing, pricing, and promoting goods, services, and ideas.
• Misconceptions: Marketing is not about:
  • Manipulating consumers to purchase unwanted products.
  • Merely selling and advertising.

The Exchange Relationship

• Exchange: The process of giving up something of value in return for something else.
  • Importance: Each participant must willingly give something valuable to obtain something desired from the other party.

Functions of Marketing

• Key Functions:
  • Buying: Acquiring goods or services;
  • Selling: Making products available to customers;
  • Transporting: Moving products from one location to another;
  • Storing: Keeping products until needed;
  • Grading: Evaluating the quality of goods;
  • Financing: Arranging for money needed for transactions;
  • Marketing Research: Gathering information about the market;
  • Risk Taking: Dealing with uncertainties in marketing decisions.

Creating Value with Marketing

• Value Equation: Customer Value = Customer Benefits - Customer Costs
  • Benefits: Anything a buyer obtains (tangible or intangible) that fulfills their needs/wants.
  • Costs: Includes monetary expenditure and effort/time spent to acquire a product.

The Marketing Concept

• Core Idea: Organizations should meet consumer needs through coordinated efforts while achieving their own objectives.
  • Importance of adapting and developing products in response to changing consumer preferences.
  • Objective: Identify consumer desires and create products that satisfy those needs.

Developing a Marketing Strategy

• Definition: A structured plan to develop, price, distribute, and promote products to meet specific customer needs.
• Key Components:
  • Target Market Selection: Identify and focus marketing efforts on a specific group of consumers.
  • Marketing Mix Development: Combine product, price, promotion, and distribution tailored to the selected market.

Selecting a Target Market

• Definition: A specific group of potential customers identified as the focus for marketing efforts.
• Types of Markets:
  • B2B (Business-to-Business): Transactions made by businesses for operating purposes or resale.
  • B2C (Business-to-Consumer): Marketing efforts aimed directly at individual consumers.
• Market Segmentation: Dividing the total market into smaller, manageable segments based on shared characteristics (e.g., demographics, psychographics).
• Strategies:
  • Total-Market Approach: Attracting all potential customers.
  • Niche Marketing: Targeting a specific, small segment with unique needs.

Bases for Segmenting Markets

• Demographic: Age, gender, income, education, etc.
• Geographic: Location-based segmentation.
• Psychographic: Psychological characteristics including lifestyle, values, and motives.
• Behavioristic: Segmenting based on consumer behaviors and decision-making processes.

Developing a Marketing Mix

• Four P's:
  • Product: Goods (tangible items), services (intangible), or ideas (concepts for marketing).
  • Price: The amount paid for a product, affecting revenue and customer perceptions.
  • Promotion: Activities like advertising, public relations, and sales promotions aimed at consumers.
  • Distribution: How and where products are made available to consumers; also known as 'place.'

Marketing Research and Information Systems

• Purpose: Gather systematic, objective data on consumers to guide marketing strategies.
• Types of Data:
  • Primary Data: Collected firsthand (surveys, focus groups).
  • Secondary Data: Existing data from external sources (government reports, archives).
• Importance: Critical for understanding market dynamics and consumer behavior.

The Marketing Environment

• Influences: External forces that can shape marketing strategies, including:
  • Political, Legal, Regulatory: Government policies affecting business practices.
  • Social: Changes in societal values and consumer preferences.
  • Economic: Economic conditions influencing consumer purchasing power.
  • Technological: Advances impacting product development and marketing techniques.

Understanding Buying Behavior

• Importance: Firms need to analyze consumer behavior to create effective marketing strategies.
• Variables:
  • Psychological: Perception, motivation, learning, attitudes, and personality traits.
  • Social: Influence of social roles, reference groups, social classes, and cultural factors.
• Example: Marriott’s Innovation Lab focuses on preferences for hotel amenities to refine offerings.

Conclusion

• Marketing is not just about promoting products; it encompasses understanding consumer needs, delivering value, and adapting to market changes to ensure sustained business success and consumer satisfaction.