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Transcript of Armstrong Ch01 Express
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Copyright © 2007 Pearson Education Canada1-1
Marketing: An IntroductionSecond Canadian Edition
Armstrong, Kotler, Cunningham, Mitchell and Buchwitz
Chapter One
Marketing: Managing ProfitableCustomer Relationships
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Looking Ahead Define marketing and the marketing processes.
Explain the importance of understanding
customers and the marketplace. Identify the five core marketplace concepts.
Identify the key elements of a customer-drivenmarketing strategy.
Discuss customer relationship managementand ways of creating and obtaining value.
Describe the major trends and forces changingtoday¶s marketing landscape.
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What is Marketing? Attracting new customers by promising
and delivering superior value.
Building long-term relationships withcustomers by delivering continued
customer satisfaction.
Creating, building and managing theserelationships profitably over time.
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Copyright © 2007 Pearson Education Canada1-4
The Marketing Process Understand the marketplace and customer
needs and wants.
Design a customer-driven marketing strategy. Construct a marketing program that delivers
superior value.
Build profitable relationships and create
customer delight.
Capture value from customers to create
profits and customer equity.
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Needs, Wants and Demands Needs are states of felt deprivation.
±Physical:
Food, clothing, shelter, safety.
±Social:
Belonging, affection.
± Individual:
Learning, knowledge, self-expression.
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Needs, Wants and Demands Wants are needs shaped by culture and
individual personality.
± Jeans vs a sari.
± Individual expression vs. collective good.
Demands are wants combined with
buying power. ± Hilfiger vs. Giant Tiger.
± Jetta vs. Jaguar.
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Fulfilling Needs and Wants Marketers create marketing offers in
response.
± A combination of goods, services,information or experiences offered to a
market to satisfy a need or want.
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Products, Services, Experiences Products.
± Anything that can be offered for.
± Acquisition, attention, use or consumption.
± That might satisfy a need or want.
Services. ± Activities or benefits offered.
± Essentially intangible.
± Do not result in ownership of anything. Experiences.
± Create, stage and market brand experiences.
± Attending live theatre, music concert.
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Marketing Myopia Sellers pay more attention to the specific
products they offer than to the benefits and
experiences produced by the products. They focus on the ³wants´ and lose sight of the
³needs.´
± The great railroads lost out to the exploding trucking
industry. ± They forgot that their business was solving
transportation problems, not running railroads.
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Value and Satisfaction If the performance and the customer¶s
experience is lower than expectations,
than customer satisfaction is low. If the performance and the customer¶s
experience meets expectations, than thecustomer is satisfied.
If the performance and the customer¶sexperience exceeds expectations, thanthe customer is delighted.
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Exchange and Transactions Exchange.
± The act of obtaining a desired object from
someone by offering something in return. Transaction.
± A trade between two parties that involves:
two things of value.
agreed upon conditions.
time of agreement.
place of agreement.
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Copyright © 2007 Pearson Education Canada1-12
What is a Market? The set of actual and potential buyers of
a product.
These people share a need or want thatcan be satisfied through exchange
relationships.
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Core Marketplace Concepts Customers have needs, wants and
demands.
Marketers offer products or services. Customers seek value and satisfaction
from offers.
Demands and offers result intransactions and relationships.
Markets are all potential customers with asimilar demand.
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Customer-Driven Marketing Divide markets into segments.
Choose the right segment to target.
Offer a unique value proposition.
Differentiate your offer from competitor
offers.
Build customer value and satisfaction.
Nurture long-term customer relationships.
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Marketing Management
The art and science of choosing target
markets and building profitable
relationships with them.
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Copyright © 2007 Pearson Education Canada1-16
Segmentation and Targeting Segmentation divides the market into
groups of customers with varying needs
and wants. Targeting selects the right segment to
nurture.
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Demand Management Marketing management seeks to control
demand.
± Increasing demand is the norm. ± Demarketing seeks to reduce demand in
certain circumstances.
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Copyright © 2007 Pearson Education Canada1-18
Value Proposition
The set of benefits or values the company
promises to deliver to its target marketsto satisfy their needs.
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Marketing Concepts Production ± affordability and availability.
Product -- quality and innovation.
Selling -- promotion and hard selling.
Marketing -- customer satisfaction and
relationships.
Societal ± long-term value to both
customer and society.
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The Selling Concepts The production concept.
± Consumers will favour products that areavailable and highly affordable.
The product concept. ± Consumers favour products that offer the most
in quality, performance and innovativefeatures.
The selling concept. ± Consumers will not buy unless it undertakes a
large-scale selling and promotional effort.
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The Marketing Concepts The marketing concept.
± Determining the needs and wants of target
markets and delivering the desiredsatisfactions more effectively and efficiently
then the competitors.
± An ³outside-in´ perspective.
± Customers are the paths to sales and
profits.
± See next slide for a comparison.
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The Marketing Concepts The societal marketing concept.
± Generating customer satisfaction and long-
run societal well-being are the keys to bothachieving the company¶s goals and fulfilling
its responsibilities.
± Balances human welfare, company profits
and consumer satisfaction.
± Addresses broader social issues.
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Relationship Marketing Customer relationship management.
The process of building and
maintaining profitable customer
relationships by delivering superior
customer value and satisfaction.
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Copyright © 2007 Pearson Education Canada1-24
The Customer¶s Experience Customer perceived value.
± Customer¶s subjective view of the offer¶s value
compared to competitive offers. Customer satisfaction.
± Customer¶s subjective view of the value received in
return for the purchase price.
Customer delight. ± Customer¶s subjective view of the increased
value received above the purchase price.
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Building Relationships Relationships span from the basic to tight
integrated relationships.
Successful relationships are built on:
± Financial benefits.
± Social benefits.
± Structural ties.
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Partner Relationship Marketing Working with partners in other company
departments and outside the company to
jointly bring greater value to thecustomers.
± Every department in an organizationcontributes to customer satisfaction.
± Suppliers are carefully controlled throughsupply chain management.
± Strategic alliances create new opportunitiesto delight customers.
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Capturing Value In Return Customer lifetime value.
± The value of the entire stream of
purchases that the customer would makeover a lifetime of patronage.
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Capturing Value In Return Share of customer.
± Share of customer is the percentage of
customers that buy a company¶s product of all customers purchasing in that productcategory.
± Companies continuously strive to grow their share of customer.
± Creating brand extensions is a favouredmethod of growing share of customer.
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Building Customer Equity The total combined customer lifetime
value of all of the company¶s customers.
Often a more accurate measure of acompany¶s value than sales or market
share.
Combination of market share, share of customer and lifetime customer value.
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Customer Relationship Groups Targeting the right customers at the right
time.
± Butterflies have high profitability with low loyalty. ± True Friends have high profitability with high loyalty.
± Strangers have low profitability with low loyalty.
± Barnacles have low profitability with high loyalty.
Challenge: make the Butterflies more loyaland make the Barnacle more profitable.
Keep the True Friends and ³fire´ the Strangers.
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New Marketing Technologies Technology has changed how marketers
build value.
± Internet and e-commerce/e-business. ± Fast and global communications.
± Wireless technologies.
± Relational databases. Instant, highly targeted communication
with customers and suppliers.
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New Global Markets International trade is the new frontier.
Export is critical to Canada¶s economic
growth.
Difficult decision:
± Delay means risking loss of growing global
markets. ± Proceed means high risk but potentially high
reward.
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Ethics and Responsibility Worldwide consumerism and
environmentalism movements exert.
pressure for greater responsibility Notion of ³caring capitalism´ tied to
societal marketing concepts.
± Seeking ways to make a profit by serving thebest long-run interests of customers and
communities.
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Not-For-Profit Marketing Marketing of ideas, values and
institutions.
Increasing awareness that theseorganizations must build relationships
with constituents and stakeholders.
Challenge of using new marketingtechniques for not-for-profit initiatives.
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Looking Back Define marketing and the marketing processes.
Explain the importance of understandingcustomers and the marketplace.
Identify the five core marketplace concepts.
Identify the key elements of a customer-drivenmarketing strategy.
Discuss customer relationship managementand ways of creating and obtaining value.
Describe the major trends and forces changingtoday¶s marketing landscape.