• Determining the needs of a targeted group of consumers
• and satisfying those needs by using the 4 P's of marketing
• to create an immediate exchange of value and a long term relationship

• = target market
• Specific subset of consumers who share similar needs/wants

1. Product - physical good, service, idea
2. Price - value to be exchanged
3. Promotion - how communicated
4. Place - where available

Both parties must see value

Loyal customers who will repeatedly buy and advocate for you

• Purpose of the organization is to satisfy consumer needs/wants, while meeting organizational objectives
• Key question - what does the customer want?
• Called marketing concept or marketing orientation

• Focus is on internal capability and technology
• Key question:  What does the firm do best?

• Focus is on aggresive sales techniques
• Key question:  How can we sell more of what we have?

Make what you can sell

rather than 

Selling what you can make

• The U.S. market share for the Ford, Lincoln and Mercury brands slid to 17.2% in 2005, driven down by Ford's reliance on the manufacturing of SUVs and slow reaction to consumers' shift toward fuel-efficient vehicles.
• Bill Ford, chairman and CEO of the company founded by his great-grandfather, bemoaned the prevailing Ford philosophy of "if you will build it, they will buy it."
• "That's wrong," he said.  "We built [specific] vehicles to fill plants."  Now, he pledged, Ford's menu will be contingent on customer demands, today's and tomorrow's.  "We're going to figure out what people want before they know it."

• 2010 Car of the year
• Ford Fusion Hybrid
• 2010 Truck of the year
• Ford Transit Connect
• Ford only member of big 3 US automakers that did not declare bankruptcy nor take bailout money

• Focus is on enhancing benefits to society
• Key question:  How can I meet consumer needs and benefit society?

• Moral principles and values that govern actions
• Why important?

Society's values which are enforceable in court

• Framework for ethical decisions
• Levels of corporate responsibility

• Basic set of values of the society
• The AJC test

• What is the standard practice in business
• Basic business values
• Consumer has right to safety, to be informed, to choose, and to be heard
• No longer caveat emptor
• Industry standards

• First, do no harm
• Foster trust and consumer confidence in the marketing system
• Values of honesty, responsibility, fairness, respect, openness, and citizenship

• What would those in your company say about this decision?
• Codes of conduct, company policy
• Coca Cola
• University system code of ethics

1. Moral idealism
2. Utilitarianism

• Companies are responsible only to stockholders and investors
• Companies have just one duty: maximize profit within the law

• Companies are responsible to owners and to:
• Customers
• Employees
• Suppliers

• Companies are responsible to owners and stakeholders and to:
• Society in general
• Cultural diversity
• Environmental stewardship
• Cause related marketing - Supporting/sponsoring a non-profit or charitable organization or activity

• If we expect firms to act ethically, then so should we.
• Unauthorized downloading or sharing of computer files (software, music, movies)
• Copyright violations
• Insurance fraud
• Return of used items

• Product
• Planned obsolescence
• Products that are "unhealthy"
• Place
• Is there an obligation to serve unsatisfied segments, even if limited profit
• Price
• What is "reasonable" profit
• Most profitable industries
• Promotion
• How much "puffery" is okay?

1. Demographic
1. Populations statistics
2. Social
1. Values and beliefs
3. Economic
1. Income and business
4. Technological
1. Innovation
5. Political and Legal
1. Laws
6. Competitive
1. What others are doing

• Current U.S. demographic statistics
• 312 million people
• popclocks
• 115 million households
• 49.2% men 50.8% women
• Median age 37
• Census

1. Tweens
1. 8-12 ys old
2. 20+ million
2. Teens
1. 13-17
2. 25 million
3. Gen Y  
1. 18-32
2. 75+ million
4. Gen X
1. 33-47
2. 40 million
5. Baby Boomers
1. 48-66
2. 75 million

• 8-12
• 20+ million
• Attitudes
• Access to info
• Spend $200 billion/yr
• Cynical towards ads - rarely "click thru"

• 13-17
• 25 million
• 72 hrs/wk electronic
• 93% internet/74% cell phones
• 75% facebook
• Shopping is sport
• Want convenience, engagement

• 18-32
• 75+ million
• Largest cohort
• Wide range of life cycles
• Inquisitive, diverse, time mgrs, multitaskers, opinionated, want fulfillment

• 33-47
• 40 million
• Focus on children
• Value education
• Home ownership is important
• Look for honesty, reliability, authenticity

• 48-66
• 75 million
• More active than previous
• "never age"
• Postponing retirement
• Huge market for products
• Involved in lives of adult children/grandchildren

• Currently minorities represent 1/3 of U.S. population
• By 2023 half of children, by 2042 half of population
• What does this mean?

• Values
• Self sufficiency, work ethic, upward mobility
• Conformity
• No one should expect special treatment
• Individuality
• Work to live
• Time is an issue

• Overall economy
• Consumers' ability to purchase
• Consumers' willingness to purchase
• Income
• Business cycles and perceptions

• Median U.S. household income in 2011 is about $49,500
• Consumer willingness to spend
• spending habits

1. Recession - falling income/employment/production
1. Focus on value
2. Recovery - rising income/employment/production
1. Focus on - buy now for better times later
3. Prosperity - high income/employment/production
1. Focus on convenience/reward
4. Depression - low income/employment/production
1. Focus on basic needs

• GDP
• Employment data
• Consumer perceptions
• Consumer confidence
• Misery index

• Competition
• Consumers

• Maintain a competitive environment
• Sherman and Clayton Acts
• Fair prices
• Robinson Patman - Price discrimination
• Federal Trade Commission Act - price fixing
• Truthful advertisement
• Wheeler - Lee Act
• Safe products
• Consumer Product Safety Commission
• Food and Drug Administration

• Who is the competition?
• Direct competition (brand)
• Similar/same product
• Indirect competition (product)
• Substitutable items - perform same function
• Competition for discretionary spending
• Other possible uses for the money

• The process of buying
• Why we make the purchase decisions that we do

• Determined by purchase involvement
• How important is the purchase
• Reflects the degree of perceived risk of the purchase
• Indicates the time, effort expended

• Characteristics of low involvement purchases
• Low cost, standardized, not important, low risk
• Type of buying process used:
• Routine response behavior/habitual
• How marketers try to influence

• Characteristics
• Important to consumer
• Risk is present
• Consumers see substantial differences between alternatives

Need Recognition --> Information Search --> Evaluation of Alternatives--> Purchase --> Postpurchase Behavior

• Collecting data to help make a reasonable decision 
• Internal information search
• External information search
• Results in Evoked Set

3. Evaluation of alternatives

• Narrowing down and rating possible choices
• Evaluative criteria

• Comparing outcomes to expected results
• "Was my choice wise?"
• Cognitive Dissonance
• Ways it is reduced by buyer
• Ways it is reduced by seller

• Same process, different results - Why?
• Factors influence behavior
• Cultural
• Social
• Individual
• Psychological (how our mind works)

The essential character of a society that distinguishes it from other societies

1. Values
2. Language
3. Myths
4. Customs
5. Rituals
6. Laws

• Social class
• Consumers who are relatively equal in status, income, behavior
• Often defined by income, source of income, education, and occupation
• In US
• Upper class (capitalist and upper middle) 15%
• Middle class (middle and working) 65%
• Lower class (working poor and underclass) 20%

• Reference groups
• Membership
• Aspirational
• Dissociative
• Family
• Consumer socialization process
• Varied roles - initiator, influencer, decider, user

• Demographics
• Age, gender, family life cycle
• Personality and self concept

1. Perception
2. Motivation
3. Learning
4. Beliefs and Attitudes

• Selective exposure/attention
• We notice things important to us
• Selective distortion
• Change info that conflicts with beliefs
• Selective retention
• We remember things we agree with

• Physiological needs
• "Soup is good food"
• Safety needs
• "Because so much is riding on your tires"
• Safe performance tires
• Social needs
• "in" calls
• Saturn family of owners
• creating friendship
• Esteem needs
• "Because you're worth it"
• "You deserve a break today"
• buy the best
• Self actualization
• Nissan "possibilities" ads
• extreme driving

• Beliefs and attitudes
• What a consumer holds as true
• Consistent response based upon "truth"

• Definition
• Identifying and serving homogeneous groups (segments) of consumers
• Process
• Recognize segments exist, based on segmentation variables/bases
• Pick one or more groups to serve (target market)
• Create marketing mix to serve needs (positioning)

• Splitting the market based on
• age, gender, income
• Ethnicity, family life cycle
• Essentially "what we are"

• Expands demographic segmentation to include "how we think and act"
• Personality
• Lifestyle, Motives
• Often measured and grouped based upon AOI statements
• Example is VALS

• Divides consumers based upon location
• City versus rural
• North versus south
• East coast versus Midwest
• Mountain versus beach

• Segment customers based upon benefit they seek
• Muffins?
• Toothpaste?
• Universities?

• Dividing a market by the amount of product bought or consumed
• Potential
• 1st Time
• Light or irregular
• Medium
• Heavy

• A description of the consumers in a segment
• Focuses on characteristics of consumer, not product
• Profile includes a profile name

• Young Professional
• City; 25-35, professional/white-collar, college grad, $60,000+; trendy, live life in the fast lane, enjoy nightclubs and museums; read Vanity Fair, drive cars like an Audi A4/S4, looking for latest trends and entertaining tips, read magazines once a month
• Grandmas on the go
• Suburbs; 55+, upper middleclass, stay at home; traditional values, family is top priority, travel, golf, see themselves as youthful, want best for their grandkids; looking for parenting tips, info on kids friendly tips, handmade gift ideas, read magazines weekly or more often

• Segment profiles by zip code are often available
• Combines multiple segmentation bases
• Offered by various companies
• tapestry segements by zipcode

• 1st question: Are there segments?
• 2nd question: If there are segments how many will you select?

• Undifferentiated targeting
• Firm assumes all consumers are the same, relative to the product category

• Multisegment/differentiated Targeting

• Concentrated/niche marketing

• One-to-One marketing
• Advantage - increases loyalty

• Create marketing mix to meet needs of segment
• Making sure your product is perceived correctly in minds of consumers
• Competitive positions can be compared using a perceptual map