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.