CHAPTER 4 Hit a Home Run with Customers
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4
Hit a Home Run
with Customers
4.1
The Marketing
Concept
4.2
Discover What People
Want
4.3
Target Markets
4.4
Customer Service
PHOTO AT LEFT ? DIGITAL VISION
C H A P T E R
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Frito-Lay Reaches Teens
The 30 million teenagers in the United States spend $175 billion annually on
everything from fashions to electronics. How do you market to media-savvy
consumers with short attention spans who are skeptical of traditional
advertising? Teens make up a fickle, competitive, ever-changing group of
consumers. Research gathered on teens becomes out of date more quickly
than for any other age group. Companies must be able to speak the
language of teenagers, identify their latest trends, and find the best ways to
appeal to them through everything from music downloads to instant
messaging.
The teen market is potentially very lucrative. Teens have a powerful
influence in the marketplace because they are trendsetters and early
adopters. Teens are an attractive market due to the potential lifetime of
value they offer. Gaining the loyalty of teens can result in continued longterm future sales.
The teen market is increasingly sophisticated and challenging. Today¡¯s
teens have a desire to be treated like adults. These young people feel that
they are under more pressure than the teens of any other generation. They
are expected to earn good grades, participate on a sports team and in other
extra-curricular activities, and be accepted into college.
Frito-Lay believes that companies have to match communication efforts
to the desired audience. Frito-Lay created partnerships with MTV Spring
Break, MTV Video Music Awards, Yahoo Music, and Universal Music to
make a greater impact with the teen market. It also created a partnership
with Wal-Mart to offer teen consumers free music downloads with the
purchase of Doritos. Teens could key in codes found in Doritos¡¯ packages at
Wal-Mart¡¯s web site to access free music. This marketing strategy was based
upon the popularity of music among teenagers. The strategy resulted in a
huge return on investment.
Think Critically
1.
Why are teens receiving so much attention from marketing firms?
2.
List two forms of technology used by Frito-Lay to capture the attention
of teens.
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Lesson 4.1
The Marketing
Concept
Goals
? Explain the central focus of the marketing concept.
? Explain the reasons for increased sports and entertainment options.
Terms
? marketing concept
? productivity
? breakeven point
? opportunity cost
In the United States, $65 billion of snacks are sold each
year. The Hershey Company understands the snack
market. Nearly 38 percent of snacks sold fall into the
category of confection or candy, and Hershey is the
category¡¯s sales leader with 29 percent of the total
business. Hershey has fourteen $100-million brands,
including Reese¡¯s peanut butter cups and Hershey¡¯s
Kisses.
Reese¡¯s is one of Hershey¡¯s star brands. The peanut
butter version is most popular in the United States.
To widen its appeal, white chocolate, fudge,
caramel, and ¡®¡®bites¡¯¡¯ versions are offered to
consumers. In the global market, marshmallow
and hazelnut versions are offered to appeal to
consumers in the Far East and Western
Europe.
Hershey¡¯s Kisses, created by company founder Milton
Hershey over 100 years ago, has grown into a $400million brand. Sixty percent of the Kisses¡¯ business is
seasonal, centering around special holidays. Hershey¡¯s
has the goal of making Kisses the candy of choice year
round and has added caramel-filled, dark chocolate,
mint, and peanut butter versions. Kissables are miniature,
candy-coated Kisses available in a single-serving snack
pack and other sizes.
Work with a group. Determine the popularity of
Hershey¡¯s within your group. How many in your group
enjoy snacks while enjoying entertainment events? Do
snack companies often advertise at or sponsor events
you have attended? Should Hershey¡¯s be concerned
about the obesity trend among youth and its possible
relationship to Hershey¡¯s products?
THE MARKETING
CONCEPT
Marketing is an important business function. You participate in the marketing process as a consumer of goods and services. About half of every
dollar you spend pays for marketing costs. Marketing costs include product
development, packaging, advertising, and sales expenses.
The most important aspect of marketing is satisfying customer needs.
Customers¡¯ needs should be the primary focus during the planning, production, distribution, and promotion of a product or service. A business that
keeps the focus of satisfying customer needs is said to be following the
marketing concept.
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Maintain Relationships
? DIGITAL VISION
The marketing concept requires maintenance of important
relationships with
customers. Managing customer relationships involves listening to customers and carefully monitoring the
latest consumer trends. Maintaining a
successful marketing relationship
requires effort. Successful salespersons
learn about customers and their needs
by being good listeners. Each customer
is unique with a different personality,
requiring a unique marketing strategy.
While some customers demand intensive attention, others prefer to be left
alone until they make the purchase.
Customer satisfaction is the bottom line for maintaining successful
marketing relationships. Price, quality, service, and the amount of pleasure
gained from a sports and entertainment event are factors that influence
customer satisfaction. Sports and entertainment event planners are challenged to organize satisfying events that customers want and can afford.
When individuals purchase goods and services, they expect appropriate
value for the money spent. Because there is so much competition in the
sports and entertainment industry, marketing strategies must include a
customer service component that stands apart from the competitors.
Customers who receive special attention are less likely to consider doing
business with competitors.
What is the most important aspect of marketing?
INCREASED SPORTS AND
ENTERTAINMENT OPTIONS
The increased standard of living in the United States has resulted in more
discretionary income for consumers. The average consumer has more
money to spend on sports and entertainment events and related merchandise. Increased consumer demand for sports and entertainment events has
resulted in higher prices and more competition. Competition in the marketplace results in more options for consumers and improved events and
merchandise. Marketing strategies must include monitoring the competition
and consumer trends and making improvements that meet the latest customer demands.
THE MARKETING CONCEPT Lesson 4.1
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Customer Focus
Time Out
Small towns in the
United States often
associate their
identity with
sports at the local
school. Small
schools are facing
pressure to consolidate
to use tax dollars more
efficiently. But leaders
in small communities
fear that their communities will lose identity as well as business
connected to local
sports teams. Many
small communities are
now taking steps to
increase their populations in order to save
their schools and the
community¡¯s identity.
Productivity is the rate at which companies produce goods
or services in relation to the amount of materials and
number of employees utilized. Productivity has made
impressive strides in the United States as well as in many
other developing nations. Whether it¡¯s the production of
5,000 concert t-shirts or 10,000 plastic promotional footballs for a professional football team, the product demands for sports and entertainment
events can be filled quickly. But, increased competition has forced business¡¯s
focus beyond productivity to establishing satisfying relationships with
customers. Imagine being highly productive in creating products that consumers do not need or want! Remember, the primary focus of the marketing
concept is the satisfaction of customer needs.
Successful marketing strategies identify customer needs and then develop
and market products viewed as superior by customers. While it is important
to maintain satisfying customer relationships, companies must also earn a
profit. When marketing strategies do not pay attention to customer wants
and needs, sports and entertainment events have disappointing attendance
figures, and stores have surplus merchandise, resulting in price cuts. The
ultimate result of not having a customer focus is a failed business.
Successful marketing strategies identify prospective customers and their
location. Prospective customers must be offered the appropriate marketing
mix¡ªproduct, price, promotion, and location¡ªto maintain satisfying relationships. Marketing success depends upon offering the best product at an
acceptable price where the demand exists. Customers learn about the products and services through promotion. Customers are the driving force
behind the marketing concept.
Weekend Entertainment Choices
Every weekend, there are numerous entertainment choices ranging from
community celebrations and concerts to a wide array of sporting events. The
organizers of all of these events realize the intense competition for consumer
dollars and develop promotional strategies to catch the attention and increase
attendance of consumers. The bottom line is that these events must earn a
profit. The event¡¯s planners and organizers need to know the breakeven
point, or the minimum attendance and sales required to cover all of the
Surviving members of the Beatles have finally decided to
¡®¡®let it be¡¯¡¯ online. Apple Corps. is remastering the original
Beatles recording of the Let It Be album for eventual
reissue. At the same time as the
remastered songs will be available on
CD, they will also be available
for download from the Internet.
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Chapter 4 HIT A HOME RUN WITH CUSTOMERS
Up to this point, Beatles¡¯ music has not been available
online. Legitimate online music sellers hope that the
Beatles¡¯ decision will send a message to other music artist
holdouts that this is the way to go.
Think Critically
Why do you think the Beatles have resisted offering their
music online? How will this announcement affect digital
music sales?
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