Marketing Chapter 1 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall and...

Marketing

Chapter 1Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

and Customer Value

Marketing: Managing Profitable Customer Relationships

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What is Marketing?Marketing Defined:

“Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others”

Marketing is about managing profitable customer relationships

Attracting new customers Retaining and growing current

customers

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The Marketing Process

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Core Marketing Concepts

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Understanding the Marketplace

Needs, wants, and demands

Marketing offers: including products, services and experiences

Value and satisfaction Exchange,

transactions and relationships

Markets

Need State of felt

deprivation Example: Need food

Wants The form of needs as

shaped by culture and the individual

Example: Want a Big Mac

Demands Wants which are

backed by buying power

Core Concepts

WantNeed

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Markets

Core Concepts Marketing offer Combination of

products, services, information or experiences that satisfy a need or want

Offer may include services, activities, people, places, information or ideas

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Markets

Value Customers form

expectations regarding value

Marketers must deliver value to consumers

Satisfaction A satisfied customer

will buy again and tell others about their good experience

Core Concepts

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Value and Satisfaction

Perceived Value The customer’s evaluation of the

difference between benefits and costs.

Customers often do not judge values and costs accurately or objectively.

Customer Satisfaction Product’s perceived performance

relative to customer’s expectations.

Customer Satisfaction

Expected

level

Perf

orm

ance

SATISFACTION

DISSATISFACTION

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

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Discussion Question: Customer Satisfaction

When have you, personally, been extremely satisfied or dissatisfied with a product? Why?Why is it so difficult for companies to deliver value to consumers?

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Markets

Exchange The act of obtaining a

desired object from someone by offering something in return

One exchange is not the goal, relationships with several exchanges are the goal

Relationships are built through delivering value and satisfaction

Core Concepts

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Markets

Market Set of actual and

potential buyers of a product

Marketers seek buyers that are profitable

Core Concepts

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Elements of a Modern Marketing System

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Marketing Management

Marketing management is the art and science of choosing target markets and building profitable relationships with them.

This definition must include answers to two questions:• What customers will we serve?• How can we serve these customers

best?

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Selecting Customers and Creating Value

Customer Management What customers will we serve? Marketers select customers that can

be served profitably

Value Proposition How can we serve these customers

best? Includes the set of benefits or values

a company promises to deliver to consumers to satisfy their needs

PRODUCTION CONCEPT

Marketing Management orientations

PRODUCT CONCEPT

SELLING CONCEPT

MARKETING CONCEPT

SOCIETAL CONCEPT

Production ConceptConsumers will favor products that are available and affordable

Improve production and distribution

Product ConceptConsumers will favor products that offer the most in quality, performance, and innovative features

Make continuous product improvements

Consumers will not buy enough without a large scale selling and promotion effort

Selling Concept

Push for more sales

Focus on satisfying the needs and wants of target markets.

«Find right customers for your product» VS«Find right products for your customers»

Marketing Concept

Deliver satisfaction better than competitors.

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The Selling and Marketing Concepts Contrasted

Societal Marketing Concept

Deliver value to customers to improve their AND the society’s well being.Balance short-run and long-run welfare.

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The Marketing Plan

Transforms the marketing strategy into actionIncludes the marketing mix and the 4P’s of marketing

Product Price Place Promotion

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Building Customer Relationships

CRM – Customer relationship management The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, keeping and growing customers.

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Not All Customers are Equal

Basic Relationships Low-margin customers

Full Partnerships Key customers

Selective relationship management

Weeding out unprofitable customers

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Capturing Value from Customers

Customer Loyalty and RetentionShare of CustomerCustomer Equity

Customer delight leads to emotional relationships and loyaltyCustomer Lifetime Value shows true worth of a customer

Key Concepts

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Share of customer’s purchase in a product category.Achieved through offering greater variety, cross-sell and up-sell strategies.

Key Concepts

Share of customer

Sales to your firm

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• The combined customer lifetime values of all current and potential customers.

• Measures a firm’s performance, but in a manner that looks to the future.

• Choosing the “best” customers is key

Key Concepts

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Marketing Landscape

Growth of the InternetAdvances in telecommunications, information, transportation

Customer research and tracking

Product development Distribution New advertising tools 24/7 marketing

through the Internet

Challenges

Digital ageGlobalizationEthics and social responsibilityNot-for-profit marketingMarketing relationships

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Marketing Landscape


Geographical and cultural distances have shrunk

Greater market coverage

More options for purchasing and manufacturing

Increased competition from foreign competitors

Challenges

65%McDonald’s gets 65 percent of its revenues from outside the United States.

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Marketing Landscape


Marketers need to take great responsibility for the impact of their actions

Challenges

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Marketing Landscape


Many organizations are realizing the importance of strategic marketing

Performing arts Government

agencies Colleges Hospitals Politicians

Challenges

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Marketing Landscape


Profits through managing long-term customer equity

Improve customer knowledge

Target profitable customers

Keep profitable customers

Challenges

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What is Marketing

The process of building profitable customer relationships by creating value for customers and capturing value in return

Marketing Chapter 1 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall and...

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