> > > > > > > >Chapter 12

Customer-Driven Marketing
1 Summarize the ways in which 5 Describe the marketing research
marketing creates utility. function.

2 Discuss the marketing concept. 6 Identify and explain the methods

available for segmenting
consumer and business markets.
Describe not-for-profit marketing,
and identify the five major
categories of nontraditional 7 Outline the determinants
3
marketing. of consumer behavior.

Outline the basic steps in Discuss the benefits and

4 8 tools for relationship
developing a marketing strategy.
marketing.
• Marketing - set of processes for creating,
communicating, and delivering value to customers and
for managing customer relationships in ways that
benefit the organization and its stakeholders.
– Best marketers create a link in consumers’ minds between the
new need and the fulfillment of that need by the product.

• Exchange process - activity in which two or more

parties give something of value to each other to satisfy
perceived needs.
 Utility - want-satisfying power of a good or service.

Create time utility by making a good or service

available when customers want to purchase it.

Create place utility by making a product available in a

location convenient for customers.

Create ownership utility through an orderly transfer of

goods and services from the seller to the buyer.
• Marketing concept - company-wide consumer
orientation to promote long-run success.
• Firm starts with analysis of customers’ needs and
works backward to offer products that fulfill them.
• Explained by shift from sellers’ market in which goods
and services are relatively scarce to buyers’ market in
which they are relatively plentiful.
 20 million not-for-profits exist
worldwide.
 Apply marketing tools to reach
audiences, secure funding,
improve their images, and
accomplish their overall missions.
 Sometimes partner with a profit-
seeking company to promote a
message.
1. Study and analyze
potential target
markets and choose
among them.
2. Create a marketing
mix to satisfy the
chosen market.
• Target market - group of people toward whom an organization
markets its goods, services, or ideas with a strategy designed to
satisfy their specific needs and preferences.
→ Product strategy involves the nature of the product and its
package design, brand names, trademarks, and product image.
→ Distribution strategy ensures that customers receive their
purchases in the proper quantities at the right times and
locations.
→ Promotional strategy blends advertising, personal selling, sales
promotion, and public relations to achieve its goals of informing,
persuading, and influencing purchase decisions.
→ Pricing strategy is setting profitable and justifiable prices for the
firm’s product offerings, sometimes subject to government
scrutiny.
• Standardization - offering the same marketing mix
in every market.
• Adaptation - developing a unique marketing mix to
fit each market’s local competitive conditions,
consumer preferences, and government
regulations.
• Mass customization - firms mass produce goods
and services and add unique features to individual
or small groups of orders.
• Marketing research – the process of collecting and
evaluating information to support marketing decision
making. AC Nielson – Consumer Research
• Secondary data: Previously published data from trade
associations, advertising agencies, marketing
research firms, and other sources.
• Primary data: Data collected through observation,
surveys, and other forms of observational study.
• Data mining - computer searches of customer data to
detect patterns and relationships.
Market segmentation – the process of dividing a total
market into several relatively homogeneous groups.
Geographic Segmentation
• Divides market into homogeneous groups on the basis of their
locations.
Demographic Segmentation
• Divides market on the basis of various demographic or
socioeconomic characteristics: gender, income, age, occupation,
household size, stage in the family life cycle, education, and
ethnic group.
Psychographic Segmentation
• Divides consumer market into groups with similar psychological
characteristics, values, and lifestyles.
Product-Related Segmentation
• Divides market based on buyer’s relationship to the good or
service.
• Geographic segmentation – targets geographically
concentrated industries.

• Demographic, or customer-based, segmentation – a

good or service intended for a specific organizational
market (i.e. healthcare).

• End-use segmentation - focuses on the precise way a

B2B purchaser will use a product.
• Consumer behavior - actions of ultimate consumers
directly involved in obtaining, consuming, and
disposing of products and the decision processes
that precede and follow these actions.
– Personal factors: needs and motives, perceptions, attitudes,
self-concept.
– Interpersonal factors: cultural, social, and family influences.

• Business buying behavior - often includes a

variety of influences from multiple decision makers.
• Relationship marketing - developing
and maintaining long-term, cost-
effective exchange relationships with
partners.
• Consumers enter into relationships
only if there is some benefit to them.
• Lower costs and higher profits for the business.
• Efficient targeting of best customers increases the
lifetime value of a customer.
• Stronger relationships with business partners and
opportunities to combine capabilities and resources
to better accomplish goals.
• 80/20 principle: Frequent customers have a higher
lifetime value, so businesses allocate resources
accordingly.
• Frequency marketing: reward purchasers with
cash, rebates, and other premiums.
• Affinity programs: solicit involvement based on
common interest.
• Comarketing: businesses jointly market each others’
products.
• Cobranding: firms link their names in a single
product.
 Customizing products and
marketing and rapidly delivering
goods.

Customer relationship
management software helps
companies gather, sort, and
interpret data about specific
customers.