Understanding The Marketplace and Customer Needs: Consumers Market When They

1.
Marketing: is a process by which companies create value for customers and

build strong customer relationships in order to capture value from customers in
return.
2. Understanding the Marketplace and Customer Needs :
 Needs: are states of felt deprivation.

 Wants: are the form human needs take as they are shaped by culture and
individual personality.
 Demands: are human wants that are backed by buying power.
 Market offerings: are some combination of products, services,
information, or experiences offered to a market to satisfy a need or want.
 Marketing myopia: is focusing only on existing wants and losing sight of
underlying consumer needs.
 Exchange: is the act of obtaining a desired object from someone by
offering something in return.
 Marketing actions try to create, maintain, and grow desirable exchange
relationships.
 Market: is set of actual and potential buyers.
Consumers market when they:
• search for products
• interact with companies to obtain information
• make purchases
3. Designing a Customer Value-Driven Marketing Strategy:
1. Production concept
2. Product concept
3. Selling concept
4. Marketing concept
5. Societal Marketing concept
Designing a Customer Value-Driven Marketing Strategy
(cont.):
Societal marketing:
The company’s marketing decisions should consider consumers’
wants, the company’s requirements, consumers’ long-run interests,
and society’s long-run interests.
4. Company-Wide Strategic Planning:
Mission statement: is the organization’s purpose; what it wants to

accomplish in the larger environment.
A mission begins with the following questions:
• What is our business?
• Who is the customer?
• What do consumers value?
• What should our business be?
These simple-sounding questions are among the most difficult the
company will ever have to answer. Successful companies continuously
raise these questions and answer them carefully and completely.
A mission statement should:

1. Not be myopic in product terms.
2. Be meaningful and specific.
3. Be motivating.
4. Emphasize the company’s strengths.
5. Contain specific workable guidelines.
6. Not be stated as making sales or profits.
• Mission statements should be market oriented and defined in terms of
satisfying basic customer needs. Products and technologies eventually become
outdated, but basic market needs may last forever.
Foe example:Microsoft’s mission isn’t to create the world’s best software,

technologies, and devices. It’s to “empower every person and every organization on
the planet to achieve more.”
Product- versus Market-Oriented Business Definitions; . ‫في الكشكول‬
5. Designing The Business Portfolio:

The business portfolio: is the collection
of businesses and products that make
up the company.
(The best business portfolio is the one that best fits the company’s strengths and
weaknesses to opportunities in the environment.)
Business portfolio planning involves 2 steps:

1) The company must analyze its current business portfolio and determine which
businesses should receive more, less, or no investment.
2) It must shape the future portfolio by developing strategies for growth and
downsizing.
Portfolio analysis: is a major activity in strategic planning whereby

management evaluates the products and businesses that make up the
company.
Strategic business units can be a:

• Company division
• Product line within a division
• Single product or brand
Analyzing The Current Business Portfolio:
1) Identify strategic business units (SBUs)
2) Assess the attractiveness of its various SBUs
3) Decide how much support each SBU deserves
*When designing a business portfolio, it’s a good idea to add and support products
and businesses that fit closely with the firm’s core philosophy and competencies.
*The purpose of strategic planning is to find ways in which the company can best use
its strengths to take advantage of attractive opportunities in the environment.
*For this reason, most standard portfolio analysis methods evaluate SBUs on two
important dimensions: the attractiveness of the SBU’s market or industry and the
strength of the SBU’s position in that market or industry.
Marketing environment: includes the actors and forces outside marketing that affect
marketing management’s ability to build and maintain successful relationships with
target customers.
Microenvironment: consists of the actors close to the company that affect its ability to
serve its customers—the company, suppliers, marketing intermediaries, customer
markets, competitors, and publics.
Macroenvironment: consists of the larger societal forces that affect the

microenvironment—demographic, economic, natural, technological, political, and
cultural forces.
The Microenvironment:
The company:
In designing marketing plans, marketing management takes other company
groups into account.
• Top management
• Finance
• R&D
• Purchasing
• Operations
• Accounting
Suppliers:
• Provide the resources to produce goods and services.
• Treat as partners to provide customer value.
Marketing intermediaries: are firms that help the company to promote, sell, and
distribute its goods to final buyers.
Types of Marketing Intermediaries:
1) Resellers.
2) Physical distribution firms.
3) Marketing services agencies.
4) Financial intermediaries.
Competitors: Firms must gain strategic advantage by positioning their offerings
strongly against competitors’ offerings in the minds of consumers.
Publics:
Any group that has an actual or potential interest in or impact on an organization’s
ability to achieve its objectives:
• Financial publics
• Media publics
• Government publics
• Citizen-action publics
• Local publics
• General public
• Internal publics
Customers:
• Consumer markets
• Business markets
• Reseller markets
• Government markets
• International markets
The Macroenvironment:
Demographic Environment:
• Demography: is the study of human populations—size, density, location, age,
gender, race, occupation, and other statistics.
• Demographic environment: involves people, and people make up markets.
• Demographic trends: include changing age and family structures, geographic
population shifts, educational characteristics, and population diversity.
Baby Boomers – born 1946 to 1964
Generation X – born between 1965 and 1976
Millennials – born between 1977 and 2000
Generation Z – born after 2000
Generational marketing: is important in segmenting people by lifestyle or life stage
instead of age.
Demographic Environment:
• Changing American family.
• Changes in the workforce.
Markets are becoming more diverse:
• International
• National
• Ethnicity
• Gay and lesbian
• Disabled
Geographic Shifts in Population:

• Growth in U.S. West and South and decline in Midwest and Northeast
• Change in where people work
 Telecommuting
 Home office
Economic Environment:
Income Distribution: Over the past several decades, the rich have grown richer, the
middle class has shrunk, and the poor have remained poor.
The Natural Environment:
Natural environment: is the physical environment and the natural resources that are
needed as inputs by marketers or that are affected by marketing activities.
Trends in the Natural Environment:
• Growing shortages of raw materials
• Increased pollution
• Increased government intervention
• Developing strategies that support environmental sustainability
Environmental sustainability: involves developing strategies and practices that create
a world economy that the planet can support indefinitely.
Technological Environment:
• Most dramatic force in changing the marketplace
• New products, opportunities
• Concern for the safety of new products
Political and Social Environment:
Legislation regulating business is intended to protect:
• companies from each other
• consumers from unfair business practices
• the interests of society against unrestrained business behavior
• Increased emphasis on ethics
• Socially responsible behavior
• Cause-related marketing
Cultural environment: consists of institutions and other forces that affect a society’s
basic values, perceptions, and behaviors.
Core beliefs and values: are persistent and are passed on from parents to children
and are reinforced by schools, churches, businesses, and government.
Secondary beliefs and values: are more open to change and include people’s views
of themselves, others, organizations, society, nature, and the universe.
Consumer buyer behavior: is the buying behavior of final consumers—individuals and
households that buy goods and services for personal consumption.
Consumer markets: are made up of all the individuals and households that buy or
acquire goods and services for personal consumption.
Buying behavior differs greatly for a tube of toothpaste, a smartphone, financial
services, and a new car. More complex decisions usually involve more buying
participants and more buyer deliberation.
For example, someone buying a new car might undertake a full information-
gathering and brand evaluation process. At the other extreme, for low-
involvement products, consumers may simply select a familiar brand out of habit.
Discussion Question
What brand of toothpaste do you buy and why?

Figure 5.5 shows the types of consumer buying behavior based on the degree of
buyer involvement and the degree of differences among brands.
Consumers undertake complex buying behavior when they are highly involved
in a purchase and perceive significant differences among brands. Consumers
may be highly involved when the product is expensive, risky, purchased
infrequently, and highly self-expressive.
Dissonance-reducing buying behavior: occurs when consumers are highly
involved with an expensive, infrequent, or risky purchase but see little difference
among brands.
Habitual buying behavior: occurs under conditions of low-consumer
involvement and little significant brand difference.
Consumers undertake variety-seeking buying behavior in situations
characterized by low consumer involvement but significant perceived brand
differences. In such cases, consumers often do a lot of brand switching.

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1.

Marketing: is a process by which companies create value for customers and

2. Understanding the Marketplace and Customer Needs :

 Needs: are states of felt deprivation.

Mission statement: is the organization’s purpose; what it wants to

A mission statement should:

Foe example:Microsoft’s mission isn’t to create the world’s best software,

Product- versus Market-Oriented Business Definitions; . ‫في الكشكول‬

5. Designing The Business Portfolio:

Business portfolio planning involves 2 steps:

Portfolio analysis: is a major activity in strategic planning whereby

Strategic business units can be a:

2) Assess the attractiveness of its various SBUs

3) Decide how much support each SBU deserves

Macroenvironment: consists of the larger societal forces that affect the

Geographic Shifts in Population:

What brand of toothpaste do you buy and why?

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