Marketing is an organizational function and a set of processes for creating, capturing, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
Exchange—the trade of things of value between the buyer and the seller so that each is better off as a result.
Marketing traditionally has been
divided into a set of four interrelated decisions known as the marketing mix, or four Ps: product, price, place, and promotion.
Product = Creating Value
Everything has a price, though it
doesn’t always have to be monetary. Price, therefore, is everything the buyer gives up—money, time, and energy—in exchange for the product.
Place=Delivering the Value
Promotion=Communicating the value
Value reflects the relationship of
benefits to costs, or what you get for what you give.
A transactional orientation regards the buyer–seller relationship as a series of individual transactions, so anything that happened before or after the transaction is of little importance.
A relational orientation, in contrast, is based on the philosophy that buyers and sellers should develop a long-term relationship.
Firms that practice value-based
marketing also use a process known as
relationship management (CRM), a business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm’s most valued customers.
The group of firms that make and
deliver a given set of goods and services is known as a supply chain.
Step 1: Establish Overall Strategy
The segmentation strategy must be
consistent with and derived from the firm’s mission and objectives, as well as its current situation—
weaknesses, opportunities, and threats (SWOT). L’Oreal’s objective, for instance, is to increase sales in a declining industry.
When every- one might be considered
a potential user of its product, a firm uses an undifferentiated segmentation strategy.
Firms using a differentiated marketing strategy target several market segments with a different offering for each.
When an organization selects a
single, primary target market and focuses all its energies on providing a product to fit that market’s needs, it is using a
When a firm tailors a product or
service to suit an individual customer’s wants or needs, it is undertaking an extreme form of segmentation called
or one-to-one marketing.
Firms that interact on a one-to-one
basis with many people to create custom-made products or services are engaged in mass customization, providing
one-to-one marketing to the masses.
Step 2: Describe Segments
Geographic segmentation organizes customers into groups on the basis of where they live. Thus, a market could be grouped by country (Germany, China), region (northeast, southeast), or areas within a region (state, city, neighborhoods, zip codes).
Demographic segmentation groups consumers according to easily measured, objective characteristics such as age, gender, income, and education.
Of the various methods for
segmenting, or breaking down the market,
is the one that delves into how consumers describe themselves.
Self-values are goals for life, not just the goals one wants to accomplish in a day.
Self- concept is the image people have of themselves.
Lifestyles, the third component of people’s psychographic makeup, are the way we live.
Benefit segmentation groups consumers on the basis of the benefits they derive from products or services.
Geodemographic segmentation uses a combination of geographic, demographic, and lifestyle characteristics to classify consumers.
In light of the high cost of
finding new customers and the profitability of loyal...