Chapter 1-1. Chapter 1-2 CHAPTER 1 ACCOUNTING IN ACTION Accounting Principles, Eighth Edition.
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Transcript of MKT420 Chapter 1
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Marketing:Managing Profitable
Customer Relationships
Chapter 1
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Marketing Defined
Marketing is a social and managerial processbywhich individuals and groups obtain what they
need and want through creating and exchanging
value with others
Keywords:
-creating & exchanging value with others.
-not only telling and selling but the sense ofsatisfying customer needs.
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Marketing is aboutmanaging profitable customer
relationships:
Attracting new customers
Retaining and growing current customers
-the customers still keep on buying/using your
product/services.
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Understanding the Marketplace
Need
State of felt deprivation
Not created by marketer-it is basic part of human life
Example: Need food, cloth, safety
Wants
The form of needs as shaped by culture and the individual
Example: Want a Big Mac
Demands
Wants which are backed by buying powerGiven their wants & resources, people demand product with benefitsthat add up to the most value and satisfaction
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Marketing offers
Combination of products, services, information or experiences that satisfy a
need or want
Keywords: Offer may include services, activities, people, places, information
or ideas
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,
dissatisfied customer will tell about she/he experiences to 11 person.
dissatisfied, satisfied and delighted customer.
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Exchange
The act of obtaining a desired object from someone by offeringsomething in return
One exchange is not the goal, relationships with several exchanges
are the goal
Relationships are built through delivering value and satisfaction
Keywords: relationships with exchanges are the goal and how youdelivering value and satisfaction.
Market
Set of actual and potential buyers of a product
Marketers seek buyers that are profitable
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Marketing Management
Marketing management is the art and science of choosing
target markets and building profitable relationships with
them.Keywords:
What customers will we serve?
-based on segmentation and target marketing
How can we serve these customers best?-how you want to differentiate or position your
product in the marketplace.
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Marketing Orientations
Production concept
Consumer: will favor products that available and highly
affordable.
Management: focus on improving production/distribution
efficiency.
This concept will occur if product exceeds the supply:
management should look for ways to increase production. If the
products cost is to high and improved productivity is needed to
bring it down.
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Product concept
Consumer: will favor products that offer the most quality,performance and innovative features.
Marketing strategies: making continuous product improvements.
Ex: shampoo, mousetraps, cameras
Selling concept
Consumer: will not buy enough of firms product unless
undertakes large-scale selling or more promotion effort
Practiced with unsought goods-insurance, blood donation-buyers
do not normally think of buying/using,Marketing strategies:if faces overcapacity, aim to sell what they
make rather than the market wants.
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Marketing concept
Company goal: on knowing the needs/wants of target markets anddelivering the desired satisfaction better than competitors do.
The Societal-Marketing concept
See the conflicts between consumer short run wants and consumer
long run welfare.
Ex: McDonalds-the company should balance the 3 consideration
in marketing strategies: company profit, consumer wants and
society interests.
Stress the honesty, integrity and putting the people (consumer
first) before gain the profit
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The Marketing PlanTransforms the marketing strategy into action
The Marketing Mix8Ps of marketing mix
Set of controllable tactical marketing tools
Marketing tools that the firm uses to pursue its marketing objectives in thetarget market
Product-goods and services (combination) the company offers to the target
markets-product variation, quality, design, features, brand name
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Price
-the amount of money customers have to pay to obtain the product-list price, discount, allowances
Place
-company activities that make the product available to target consumers-channels, locations, coverage
Promotion
-activities that communicate the merits of the product and persuadetarget customers to buy it
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People
-consumers must be educated in order for their expectations of theproduct/service to be managed and employees must be motivated andwell trained in order to ensure that high standards of service aremaintained
Process (Proximity)-as the success of the service is dependent on the total customerexperience a well designed
Physical Aspect
-appearance of the delivery location and the elements provided tomake the service more tangible can enhance the experience. Greatatmosphere, constant reminders of the firms corporate identity help to
build customer awareness and loyalty
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Protection
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patent (patent holder legal monopoly status), copyright, trademark-work, symbol or device)
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Building Customer Relationships
CRM Customer Relationship Management: the overall process of buildingand maintaining profitable customer relationships by delivering superiorcustomer value and satisfaction.
Keywords: It deals with all aspects of acquiring, keeping and growingcustomers.
Value and SatisfactionPerceived Value
The customers evaluation of the difference between benefits and costs.(You get what you pay)
Customers often do not judge values and costs accurately or objectively.
Customer Satisfaction
Products perceived performance relative to customers expectations.
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Capturing Value from Customers
Customer Loyalty and Retention
Customer delight leads to emotional relationships and loyalty
Customer Lifetime Value (CLV) shows true worth of a customer
Keywords: you will see your loss if the customer switch to your
competitor. The loss is equivalent with the CLV. Therefore, try toretain your customer to capture positive CLV.
Share of Customer
Share of customers purchase in a product category.
Achieved through offering greater variety, cross-sell and up-sell
strategiesKeywords:if you buy one product, you can earn bonus point, whereasyou you can redeem the points to other products.
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Therefore, the customer will buy the product to earn more bonus
point.
Or otherwise, beside selling books, you also can sell accessories,
gifts, toys, etc. ex: Amazon.
Customer Equity
The combined customer lifetime values of all current and potential
customers.Measures a firms performance, but in a manner that looks to the
future.
Choosing the best customers is key
Keywords:not just acquire the customer but keeping and growing
them as well.
Customer equity can be measure of a firms performance from
current sales/market share. High customer that give profit, high
customer equity.
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Marketing ChallengesDigital age
Growth of the Internet
Advances in telecommunications, information, transportation
Customer research and tracking
Product development
Distribution
New advertising tools-Internet, E-Commerce
24/7 marketing through the Internet
Globalization
Geographical and cultural distances have shrunk-borderless
Greater market coverage
More options for purchasing and manufacturing
Increased competition from foreign competitors-pros & cons for SME
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Ethics and social responsibility
Marketers need to take great responsibility for the impact of theiractions
Keywords: seek profit by serving the best long run interest of theircustomers and communities
Not-for-profit marketingMany organizations are realizing the importance of strategicmarketing. Example: Performing arts (museum, orchestras),Government agencies, Colleges,Hospitals, Churches
Marketing relationshipsProfits through managing long-term customer equity
Improve customer knowledge-for your latest product
Target profitable customers
Keep profitable customers
Keywords: retain and maintain the customer relationship