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Learning Objectives

  • 11-1: Define marketing, and apply the marketing concept to both for-profit and nonprofit organizations.

  • 11-2: Describe the four Ps of marketing.

  • 11-3: Summarize the marketing research process.

  • 11-4: Show how marketers use environmental scanning to learn about the changing marketing environment.

  • 11-5: Explain how marketers apply the tools of market segmentation, relationship marketing, and the study of consumer behavior.

  • 11-6: Compare the business-to-business market and the consumer market.

Getting to Know Daniel Lubetzky

  • Background: Founder of KIND bars.

  • Birthplace: Mexico City.

  • Influences: Inspired by his father’s experiences as a Holocaust survivor, emphasizing the value of acting unselfishly.

  • Entrepreneurial Journey: Started as an entrepreneur at age 16; holds degrees in economics, international relations, and law.

  • Business Development: Developed KIND bars as a healthy and convenient food option for travelers. Notably increased sales through generous product sampling.

  • Outcome: Successful sale of KIND, expecting to remain engaged with its nonprofit foundation.

What Is Marketing?

  • Definition of Marketing: Involves helping the buyer buy through various channels:

    • Websites: Aid buyers in price comparison, understanding product features, and interacting with sellers.

    • Blogs and Social Media: Foster consumer relationships.

    • Product Experience: Encourages firsthand product interaction.

The Evolution of Marketing

  • Four Key Eras:

    • Production Era:

    • Philosophy: "Produce as much as you can, because there is a limitless market for it."

    • Selling Era:

    • Focus: Heavy emphasis on selling and advertising to persuade consumers. Minimal post-purchase service and customization.

    • Marketing Concept Era:

    • Post-WWII consumer spending explosion necessitates responsiveness to consumer needs with a focus on:

      • Customer orientation

      • Service orientation

      • Profit orientation

    • Customer Relationship Era:

    • Focus on Customer Relationship Management (CRM) and long-term loyalty building, utilizing social media for relationship development.

    • Emerging Mobile/On-Demand Marketing Era:

    • Characteristics:

      • Now: Desire for immediate interaction.

      • Can I?: Desire for creative value-driven information use.

      • For me: Expectation of personalized experiences.

      • Simple: Need for ease in all interactions.

Seven Steps for Keeping Your Customers Happy

  • Importance: The cost of acquiring a new customer is five times higher than that of retaining one.

  • Steps include:

    • Building trust.

    • Being transparent about mistakes and addressing them.

    • Listening to and understanding customer expectations.

    • Continuously improving the customer experience without overpromising.

    • Designing a loyalty program.

    • Promptly returning communications.

    • Acknowledging that employees are customers too.

Nonprofit Organizations and Marketing

  • Tactics Employed:

    • Fundraising: Strategy to acquire funds.

    • Resource Acquisition: Necessary for operational functionality.

    • Promoting Ecologically Safe Technologies: Raising awareness regarding sustainable practices.

    • Attracting New Members: Enhancing organizational support through community engagement.

    • Awareness Creation for Social Issues: Essential for mission-driven campaigns.

The Marketing Mix: The Four Ps

  • Definition: Also known as the marketing mix, it encompasses:

    • Product: Designing a want-satisfying product.

    • Price: Setting a price for the product.

    • Place: Distributing the product in accessible locations.

    • Promotion: Marketing strategies to promote the product.

Applying the Marketing Process

  • Overview: The four Ps provide a framework but do not encapsulate all marketing processes.

  • Detailed Marketing Process Steps:

    • Identify opportunities.

    • Conduct research.

    • Determine target market.

    • Design product tailored to the identified needs.

    • Execute product testing.

    • Brand name and package design plus pricing decisions.

    • Select distribution methods.

    • Develop a promotional plan.

    • Establish customer relationships.

Designing a Product to Meet Consumer Needs

  • Research Importance: Initial research based on customer needs is fundamental.

  • Test Marketing: Crucial stage to assess market viability.

  • Brand Naming: Play a significant role in product identity.

Consumer Market Segmentation

  • Definition of Market Segmentation: Division of the market into groups that share similar characteristics.

  • Types of Segmentation:

    • Geographic Segmentation: Based on location and regional factors.

    • Demographic Segmentation: Characterized by traits such as age, gender, income, education, etc.

    • Psychographic Segmentation: Focused on lifestyle and personality traits.

    • Benefit Segmentation: Focused on the specific benefits that consumers seek from the product.

    • Volume or Usage Segmentation: Based on the frequency of product usage.

Building Marketing Relationships

  • Mass Marketing: Minimal segmentation aimed at reaching maximum audience.

  • Relationship Marketing: Favors customized goods and services instead of standardized mass production.

The Consumer Decision-Making Process

  • Steps involved:

    • Problem recognition.

    • Information search.

    • Evaluate alternatives.

    • Purchase decision.

    • Post-purchase evaluation.

  • Influencing Factors: Include learning, reference groups, culture, subculture, and cognitive dissonance.

Challenges in Marketing

  • Common issues faced in both B2C and B2B contexts include:

    • Brand awareness challenges.

    • Effective management of social media presence.

    • Converting leads into actual customers.

    • Gaining insights about customer preferences.

    • Budget constraints.

    • Competing in global markets.

The Business-to-Business (B2B) Market

  • Market Composition: Comprised of various sectors including manufacturers, retailers, nonprofits, and government entities.

  • Sales Dynamics: Predominantly focused on personal selling due to a concentrated base of customers necessitating tailored service.

Comparison of B2B and Consumer Markets

  • B2B Market Characteristics:

    • Fewer potential customers with larger purchase volumes.

    • Typically involves complex and technical products, often requiring customization and technical support.

    • Formal purchasing procedures characterized by negotiations and specific employee involvement.

  • Consumer Market Characteristics:

    • Numerous potential customers making smaller purchases.

    • Generally involves less technical products with a less formal purchasing process.

Career Prospects in Marketing

  • Diverse career options include:

    • Retail management.

    • Market research positions.

    • Product management roles.

    • Sales and advertising careers.

    • Public relations and web design opportunities.

Test Preparation Questions

  • TESTPREP 1:

    1. What does it mean to "help the buyer buy"?

    2. What are the three parts of the marketing concept?

    3. What are the four Ps of the marketing mix?

  • TESTPREP 2:

    1. What are the four steps in the marketing research process?

    2. What is environmental scanning?

    3. What factors are included in environmental scanning?

  • TESTPREP 3:

    1. Define consumer market and business-to-business market.

    2. Name and describe five ways to segment the consumer market.

    3. Explain niche marketing and how it differs from one-to-one marketing.

    4. Identify four factors that distinguish B2B markets from consumer markets.