Management Chapter 11 Through Marketing Research Marketers Ascertain The Need For New Goods And Services

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Instructor’s Manual – Chapter 11

Chapter 11: Customer-Driven Marketing

Use this Instructor’s Manual to facilitate class discussion and incorporate the unique features of the text’s

highlights. Follow-up via the Connect exercises is then encouraged to provide a holistic understanding of the

chapter.

C H A P T E R F O R E C A S T

In this chapter, we focus on the basic principles of marketing. First we define and examine the nature of

marketing. Then we look at how marketers develop marketing strategies to satisfy the needs and wants of their

customers. Next we discuss buying behavior and how marketers use research to determine what consumers

want to buy and why. Finally, we explore the impact of the environment on marketing activities.

L E A R N I N G O B J E C T I V E S

LO 11-2 Specify the functions of marketing.

LO 11-4 Examine the development of a marketing strategy, including market segmentation and marketing

mix.

LO 11-6 Summarize the environmental forces that influence marketing decisions.

LO 11-7 Assess a company’s marketing plans, and propose a solution for resolving its problem.

L E A R N T H E T E R M S

340)

culture (p. 346)

distribution (p. 342)

market segment (p. 338)

marketing mix (p. 341)

marketing research (p. 343)

personality (p. 346)

reference groups (p. 346)

secondary data (p. 344)

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Instructor’s Manual – Chapter 11

K E Y T E R M S A N D D E F I N I T I O N S

attitude

Knowledge and positive or negative feelings about something.

buying behavior

The decision processes and actions of people who purchase and use

products.

concentration approach

A market segmentation approach whereby a company develops one

marketing strategy for a single market segment.

culture

The integrated, accepted pattern of human behavior, including thought,

speech, beliefs, actions, and artifacts.

distribution

Making products available to customers in the quantities desired;

sometimes referred to as “place” because it helps to remember the

marketing mix as the “4 Ps.”

exchange

The act of giving up one thing (money, credit, labor, goods) in return for

something else (goods, services, or ideas).

learning

Changes in a person’s behavior based on information and experience.

market

A group of people who have a need, purchasing power, and the desire

and authority to spend money on goods, services, and ideas.

market orientation

An approach that requires organizations to gather information about

customer needs, share that information throughout the entire firm, and

use that information to build long-term relationships with customers.

market segment

A collection of individuals, groups, or organizations who share one or

more characteristics and thus have relatively similar product needs and

desires.

market segmentation

A strategy whereby a firm divides the total market into groups of people

who have relatively similar product needs.

marketing

A group of activities designed to expedite transactions by creating,

distributing, pricing, and promoting goods, services, and ideas.

marketing concept

The idea that an organization should try to satisfy customers’ needs

through coordinated activities that also allow it to achieve its own goals.

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Instructor’s Manual – Chapter 11

marketing mix

The four marketing activities—product, price, promotion, and

distribution—that the firm can control to achieve specific goals within a

dynamic marketing environment.

marketing research

A systematic, objective process of getting information about potential

customers to guide marketing decisions.

marketing strategy

motivation

A plan of action for developing, pricing, distributing, and promoting

products that meet the needs of specific customers.

An inner drive that directs a person’s behavior toward goals.

multisegment approach

A market segmentation approach whereby the marketer aims its efforts

at two or more segments, developing a marketing strategy for each.

perception

The process by which a person selects, organizes, and interprets

information received from his or her senses.

personality

The organization of an individual’s distinguishing character traits,

attitudes, or habits.

price

A value placed on an object exchanged between a buyer and a seller.

primary data

Marketing information that is observed, recorded, or collected directly

from respondents.

promotion

A persuasive form of communication that attempts to expedite a

marketing exchange by influencing individuals, groups, and organizations

to accept goods, services, and ideas.

reference groups

Groups with whom buyers identify and whose values or attitudes they

adopt.

secondary data

Information that is compiled inside or outside an organization for some

purpose other than changing the current situation.

social classes

A ranking of people into higher or lower positions of respect.

social roles

A set of expectations for individuals based on some position they

occupy.

target market

A specific group of consumers on whose needs and wants a company

focuses its marketing efforts.

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Instructor’s Manual – Chapter 11

total-market approach

An approach whereby a firm tries to appeal to everyone and assumes

that all buyers have similar needs.

value

A customer’s subjective assessment of benefits relative to costs in

determining the worth of a product.

C O N T E N T O U T L I N E

The following section provides the flow of information using the LEARNING OBJECTIVES as a guide, KEY TERMS

learners will need to take away from the course and a notation of when to use POWERPOINT SLIDES with

LECTURE NOTES to drive home teaching points. There is also a reminder on when CONNECT activities can be

used. This is created so that you can facilitate in–class or online discussion effectively.

LO 11-1

Define marketing, and describe the exchange process.

• Introduction

• Nature of Marketing

o The Exchange Relationship

Key Terms:

• Marketing

• Exchange

PowerPoint Slides

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Lecture Outline and Notes:

I. Nature of Marketing

A. Marketing, a vital part of any business undertaking, is a group of

activities designed to expedite transactions by creating, distributing,

pricing, and promoting goods, services, and ideas.

1. Creates value by allowing individuals and organizations to obtain

what they need and want.

2. Other functional areas of the business must be coordinated with

marketing decisions.

3. May be the hardest concept for organizations to master as motives

value, or better service.

4. What marketing is not:

a. It is not manipulating consumers to get them to buy products

to satisfying consumers.

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Instructor’s Manual – Chapter 11

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B. The Exchange Relationship

1. An exchange is the act of giving up one thing in return for something

else.

2. Businesses exchange their goods, services, or ideas for money or

credit supplied by customers in a voluntary exchange relationship.

3. For an exchange to occur, certain conditions are required.

a. Buyers and sellers must be able to communicate about the

“something of value” available to each.

b. Each participant must be willing to give up its respective

“something of value” to receive the “something” held by the

or benefits associated with the product.

1) This intangible “something of value” may be capability

gained from using a product or the image evoked by it, or

even the brand name.

LO 11-2

Specify the functions of marketing.

Key Terms:

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C. Functions of Marketing

1. A marketer must understand buyers’ needs and desires to determine

what products to make available.

as a persuasive activity that is accomplished through promotion.

3. Transporting is the process of moving products from the seller to the

buyer.

4. Storing includes warehousing activities.

goods and services.

8. Risk taking is associated with the chance of loss from marketing

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D. Creating Value with Marketing

1. Value is a customer’s subjective assessment of benefits relative to

costs in determining the worth of a product.

2. Customer value = customer benefits – customer costs.

3. Customer benefits are anything a buyer receives in an exchange.

4. Customer costs include anything a buyer must give up to obtain the

benefits the product provides.

expend to find and purchase desired products.

5. Customers will seek out benefits based on their experiences and

often derive benefits from the act of shopping and selecting

LO 11-3

Explain the marketing concept and its implications for developing

marketing strategies.

o Evolution of the Marketing Concept

Key Terms:

• Marketing concept

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E. The Marketing Concept

1. The marketing concept is the idea that an organization should try to

satisfy customers’ needs through coordinated activities that allow it

to achieve its own goals.

a. The marketing concept guides all marketing activities.

not survive.

4. To implement the marketing concept, a firm must have good

orientation, and coordinate its efforts throughout the entire

organization.

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Instructor’s Manual – Chapter 11

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a. A breakdown at any point in the organization can result in lost

sales, lost revenues, and dissatisfied customers.

5. Employees who know how to understand and satisfy customers’

needs and wants are those that focus on ideas, benefits, and other

aspects of the product or service. These employees do not focus on

customer.

a. For instance, Trader Joe’s attempts to meet consumer demands

for high-quality food at reasonable prices.

F. Evolution of the Marketing Concept

2. By the first part of the 20th century, supply caught up with demand,

and businesspeople came to believe that personal selling and

advertising were the most important activities to increase profits.

a. By the 1950s, some businesspeople began to recognize that

success required determining what customers want and making

b. A market orientation requires that organizations gather

information about customer needs, share that information

throughout the entire firm, and use that information to help

build long-term relationships with customers.

business each customer provides the organization than to

find new customers.

customer-relationship management to help build relationships

and boost business with existing customers.

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Instructor’s Manual – Chapter 11

e. Communication remains a major element of any strategy to

develop and manage long-term customer relationships.

1) Regardless of the medium through which communication

occurs, customers should ultimately be the drivers of

marketing strategy because they understand what they

want.

2) Customer relationship management systems should ensure

that marketers listen to customers in order to respond to

their needs and concerns and build long-term relationships.

LO 11-4

Examine the development of a marketing strategy, including

market segmentation and marketing mix.

• Developing a Marketing Strategy

o Selecting a Target Market

o Developing a Marketing Mix

Key Terms:

• Marketing strategy

• Market

• Target market

• Total-market approach

• Market segmentation

• Market segment

• Concentration approach

• Multisegment approach

• Marketing mix

• Price

• Distribution

• Promotion

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connect

Need help

understanding

Marketers Segment

PPT 11.19

II. Developing a Marketing Strategy

A. A marketing strategy is a plan of action for developing, pricing,

distributing, and promoting products that meet the needs of specific

customers.

1. A marketing strategy consists of two major steps: selecting the

target market and developing an appropriate marketing mix to

satisfy that target market.

needs and wants a company focuses its marketing efforts.

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Instructor’s Manual – Chapter 11

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3. A target market can either be small or encompass the total market.

a. Some firms use a total-market approach, in which they try to

appeal to the entire market and assume that all buyers have

similar needs and wants. (Figure 11.2)

b. Most firms use market segmentation and divide the total

market into groups of people who have relatively similar product

needs.

c. A market segment is a collection of individuals, groups, or

relatively similar product needs and desires.

4. Market Segmentation Approaches

a. The concentration approach is a market segmentation approach

in which a marketer directs one marketing strategy toward a

b. The multisegment approach is a market segmentation approach

in which the marketer aims its marketing efforts at two or more

segments, developing a marketing strategy for each. (Raleigh

efforts are on one small, well-defined segment that has a

unique, specific set of needs. (Airline marketers have used

this strategy.)

c. For a firm to successfully use the concentration or multisegment

approach to market segmentation, several requirements must

be met such as heterogeneous consumer needs, identifiable and

chosen market segment with a particular market strategy.

5. Businesses segment markets on the basis of several variables:

a. Demographic—age, sex, race, ethnicity, income, education,

b. Geographic factors—climate, terrain, natural resources,

population density, and subcultural values that influence

consumers’ needs and product usage.

c. Psychographic—personality characteristics, motives, and

d. Behavioristic—how consumers’ behavior toward the product

affects its use.

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understanding the

Marketing Mix? Visit

your Connect ebook

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C. Developing a Marketing Mix

1. The marketing mix involves four activities that the marketer can

control to achieve specific goals within a dynamic marketing

environment. (Figure 11.3)

a. The buyer or target market is the central focus of all marketing

activities.

2. Product

a. A product is a complex mix of tangible and intangible attributes

2) A service is the application of human and mechanical efforts

to people or objects to provide intangible benefits to

customers.

attributes.

d. The product is an important variable—often the central focus—

of the marketing mix; all other variables must be coordinated

c. Price is the key element of the marketing mix because it directly

relates to revenue and profits.

d. Price can be changed quickly to stimulate demand or respond to

competitors’ actions.

stores, but uses vending machines to distribute its products.

b. It is sometimes referred to as “place” because it helps to

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Instructor’s Manual – Chapter 11

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c. Intermediaries, usually wholesalers and retailers, perform many

of the activities required to move products efficiently.

d. Eliminating wholesalers and other intermediaries would not do

away with the need for the services they provide.

5. Promotion

a. Promotion is a persuasive form of communication that attempts

to facilitate a marketing exchange by influencing individuals,

groups, or organizations to accept the firm’s products.

b. The promotion variable includes advertising, personal selling,

publicity, and sales promotion.

c. The aim of promotion is to communicate directly or indirectly

with individuals, groups, and organizations to facilitate

exchanges.

d. Digital advertising on websites and social media sites is growing.

LO 11-5

Investigate how marketers conduct marketing research and

study buying behavior.

• Marketing Research and Information Systems

o Online Marketing Research

• Buying Behavior

o Psychological Variables of Buying Behavior

o Social Variables of Buying Behavior

Key Terms:

• Marketing research

• Primary data

• Secondary data

• Buying behavior

• Perception

• Motivation

• Learning

• Attitude

• Personality

• Social roles

• Reference groups

• Social classes

1. Such information might include data about the age, income,

ethnicity, gender, and educational levels of people in the target

market, their preferences for product features, their attitudes

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Instructor’s Manual – Chapter 11

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2. Marketing research is vital because the marketing concept cannot be

implemented without information about customers. It therefore

helps to guide marketing decisions.

B. A marketing information system is a framework for accessing

information about customers from both inside and outside sources.

C. Two types of data are usually available to decision makers.

a. Primary data must be gathered by researchers who develop a

method to observe phenomena or research respondents.

b. Some methods for marketing research use passive observation

of consumer behavior and open-ended questioning techniques.

2. Secondary data are compiled inside or outside the organization for

some purpose other than changing the current situation. This type of

data is already available in private or public reports.

learn about customers and market products.

concepts, packaging, and design features.

3. Social networking sites are a great way for marketers to obtain

information on consumers who are willing to share their opinions on

products and companies, to reach new markets, and to gain varied

perspectives.

research.

IV. Buying Behavior

1. Marketers analyze buying behavior because a firm’s marketing

strategy should be guided by an understanding of buyers

2. For instance, Starbucks hopes to influence buying behavior by

offering buyers incentives, such as free coffee or tea if you bring

your own cup on Earth Day.

B. Psychological Variables of Buying Behavior

interprets information received from his or her senses.

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Instructor’s Manual – Chapter 11

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3. Learning brings about a change in a person’s behavior based on

information and experience.

something.

5. Personality is the organization of an individual’s distinguishing

character traits, attitudes, or habits.

C. Social Variables of Buying Behavior

1. Social factors include social roles, which are a set of expectations for

2. Other social factors include roles, reference groups, social classes,

and culture.

a. Reference groups are groups that individuals identify with and

whose values or attitudes they adopt.

c. Culture is the integrated, accepted pattern of human behavior,

including thought, speech, beliefs, actions, and artifacts.

1) Goya Foods sells more than three dozen types of beans to

U.S. supermarkets because people with different cultural

roots demand different types of beans. Which products are

LO 11-6

Summarize the environmental forces that influence marketing

decisions.

• The Marketing Environment

• Importance of Marketing to Business and Society

Key Terms:

PPT 11.41

V. The Marketing Environment (Figure 11.4)

1. Political, legal, and regulatory forces—laws and regulators;

interpretation of laws; law enforcement and regulatory activities;

regulatory bodies, legislators and legislation; and political actions of

interest groups.

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Instructor’s Manual – Chapter 11

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3. Competitive and economic forces—competitive relationships,

unemployment, purchasing power, and general economic

conditions.

4. Technological forces—computers and advances in communications

new-product development.

B. Marketing environment forces can change quickly and radically, and

changes in one may cause changes in others.

C. Marketing requires creativity and consumer focus because

VI. Importance of Marketing to Business and Society

A. While some critics might view marketing as a way to change what

consumers want, marketing is essential in communicating the value of

products and services.

1. For consumers, marketing is necessary to ensure that they get the

products they desire at the right places in the right quantities at a

reasonable price.

2. For businesses, marketing is necessary in order to form valuable

support.

LO 11-7

Assess a company’s marketing plans, and propose a solution for

Key Terms:

evaluating market for two-seat sports cars priced midway between

moderate & luxury market.

1. Research found significant demand

2. Ventura needed to act fast to take advantage of this market

opportunity