Chapter 13 - Understanding Business PDF

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This is the summary for the materials from chapter 13 in book, including main contents and key words definition....

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Chapter 13 Marketing: Helping Buyers Buy

13-1 What is marketing? - Marketing: 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 *The Evolution of Marketing The Production Era - Early 1900s, general philosophy of business was “Produce as much as you can, because there is a limitless market for it” The Selling Era - By the 1920s, business had developed mass-production techniques (such as automobile assembly lines) -> philosophy turned from producing to selling The Market Concept Era - Around 1950s, businesses recognized that they needed to be responsive to consumers if they wanted to get their business ->philosophy called the marketing concept - 3 parts 1. A customer orientation – find out what consumers want and provide it 2. A service orientation – same objective: customer satisfaction 3. A profit orientation – focus on goods, services that earn most profit The Customer Relationship Era - The process of learning as much as possible about customers and doing everything you can over time to satisfy them - or even exceed their expectations – with goods and services The Emerging Mobile/On Demand Marketing Era - Developments such as inexpensive micro transmitters embedded in products will allow consumers to search by image, voice, or gestures *Nonprofit Organization and Marketing - Marketing is a critical part of almost all organizations - Charities use marketing to raise funds for combating world hunger - Churches use marketing to attract new members and raise funds - Politicians use it to get votes - States use it to attract new businesses and tourists 13-2 The Marketing Mix - Marketing teams divided into 4 factors, the ingredients that go into a marketing program - Managing the controllable parts of the marketing process means PRODUCT - (1) designing a want satisfying product PRICE - (2) setting a price for the product PLACE - (3) putting the product in a place where people will buy it PROMOTION - (4) promoting the product

*Designing a Product to Meet Consumer Needs - Product: any physical good, service, or idea that satisfies a want or need plus anything that would enhances the product in the eyes of consumers, such as brand name - Test marketing: the process of testing products among potential users - Brand name: a word, letter, or group of words or letters that differentiates one seller’s goods and services from those of competitors *Setting an Appropriate Price - Set price depend on a number of factors, such as cost of producing, distributing, and promoting the product *Getting the Product to the Right Place - Getting the product to consumers when and where they want it is critical to market success Developing an Effective Promotional Strategy - Promotion: all techniques sellers use to inform people about and motivate them to buy their products or services 13-3 Providing marketers with information - Marketing research: the analysis of markets to determine opportunities and challenges, and to find the information needed to make good decisions

*The Marketing Research Process - Marketing research process consists of 4 key steps 1. Defining the question and determining the present situation

2. Collecting data - Secondary data: information that has already been compiled by others and published in journals and books or made available online - Primary data: data that you gather yourself (not from secondary sources such as books and magazines) - Focus group: a small group of people who meet under the direction of a discussion leader to communicate their opinions about an organization, its products, or other given issues 3. Analyzing the research data 4. Choosing the best solution and implementing it 13-4 The marketing environment - Environmental scanning: the process of identifying the factors that can affect marketing success *Global factors - The globalization process puts more pressure on those whose responsibility it is to delivery products to these global customers *Technological factors - Using consumer databases, blogs, social networking sites, and the like, companies can develop products and services that closely match consumers’ needs *Sociocultural factors - Marketers maintain close relationship with customers, since population growth and changing demographics can have an effect on sales *Competitive factors - Aware of online competition *Economic factors - Pay close attention to the economic environment

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There are 2 major markets in the business + Consumer market: all the individuals or households that want goods and services for personal consumption or use + Business-to-business (B2B) market: all the individuals and organizations that want goods and services to use in producing other goods and services or to sell, rent, or supply goods to others

13-5 The consumer market - Market segmentation: the process of dividing the total market into groups whose members have similar characteristics - Target marketing: marketing directing toward those groups (market segments) an organization decides it can serve profitably *Segmenting the consumer market - Geographic segmentation: dividing the market by cities, counties, states, or regions - Demographic segmentation: dividing the market by age, income, education level, religion, race and occupation - Psychographic segmentation: dividing the market using the group’s values, attitudes, and interests - Benefit segmentation: dividing the market by determining which benefits of the product to talk about - Volume (or usage) segmentation: dividing the market by usage (volume of use) *Reaching smaller market segment - Niche marketing: the process of finding small but profitable market segments and designing or finding products for them - One-to-one marketing: developing a unique mix of goods and services for each individual customer

*Building marketing relationships - Mass marketing: developing products and promotions to please large groups of people - Relationship marketing: marketing strategy with the goal of keeping individual customers over time by offering them products that exactly meet their requirements *The consumer decision-making process 1. Problem recognition 2. Information research 3. Evaluate alternatives 4. Purchase decision -

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Factor that affect consumer behavior: + Learning + Reference group + Culture + Subculture + Cognitive dissonance...