Principles of Marketing Chapter 2
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Transcript of Principles of Marketing Chapter 2
Chapter 2MARKETING AND MARKETING
MANAGEMENT: CREATING CUSTOMER VALUE AND SATISFACTION
REVIEWING PREVIOUS CHAPTER
• We learned from Chapter 1 that from its mother science, economics, marketing has emerged as a distinct action discipline enriched by borrowings from related disciplines such as management, accounting, political science and the behavioral sciences.
• We also learned that history and stages of marketing thought are surveyed to the point to the growth and development of marketing.
• To be successful in business, each company should deal with customers on a daily basis, not only be customer-driven, but be customer-obsessed. The best way to achieve this objective is to develop a sound marketing function within the organization.
CHAPTER OBJECTIVES
At the end of the chapter, you should be able to:• Define what marketing is and discuss its core concepts.• Explain the relationships between customer value, satisfaction,
and quality.• Define marketing management and understand how marketers
manage demand and build profitable customer relationships. • Compare the five marketing management philosophies.• Analyze the major challenges facing marketers heading into the
new “connected” millennium.
What Is Marketing?
Simple Definition: Marketing is managing profitable customer relationships.
Goals: 1.Attract new customers by promising superior value. 2.Keep and grow current customers by delivering
satisfaction.
Marketing Defined
• A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.
OLD Viewof Marketing:Making a Sale –“Telling & Selling”
New View of Marketing:
Satisfying
NEW View of Marketing:
Satisfying Customer Needs
Core Marketing Concepts
Marketing Defined
Process by which individuals and groups obtain what they need and want through
creating and exchanging products and value with others.
What are Consumers’ Needs, Wants, and Demands?
Needs Needs - state of felt deprivation including physical, social, and individual needs i.e hunger
WantsWants - form that a human need takes as shaped by culture and individual personality i.e. bread
DemandsDemands - human wants backed by buying power i.e. money
ExperiencesExperiences PersonsPersons
ProductsAnything that can be Offered to a Market to Satisfy a Need or Want
ProductsAnything that can be Offered to a Market to Satisfy a Need or Want
PlacesPlaces
OrganizationsOrganizations IdeasIdeasActivitiesActivities
What Will Satisfy Consumers’ Needs and Wants?
ServicesActivity or Benefit Offered for Sale That is Essentially
Intangible and Doesn’t Result in the Ownership of Anything
ServicesActivity or Benefit Offered for Sale That is Essentially
Intangible and Doesn’t Result in the Ownership of Anything
How Do Consumers ChooseAmong Products and Services?
Total Quality Management Involves Improving the Quality of Products, Services, and
Business Processes
Product’s Perceived Performance in Delivering Value Relative to Buyer’s
Expectations is Customer Satisfaction
Value Gained From Owning a Product and Costs of Obtaining the Product is
Customer Value
ExchangesExchanges TransactionsTransactions
Relationships Relationships Building a MarketingNetwork by Adding:•Financial Benefits
•Social Benefits•Structural Ties
•Profitable Customers
How Do Consumers Obtain Products and Services?
Modern Marketing System
Marketing Management
Attracting new customers and retaining and building relationships with current customers
ProfitableCustomer
Relationships
Finding and increasing demand, also changing or reducing demand such as in Demarketing
DemandManagement
Involves managing demand, which involves managing customer relationshipsMarketing
Management
Stage 1. Entrepreneurial MarketingStage 1. Entrepreneurial Marketing
Stage 2. Formulated MarketingStage 2. Formulated Marketing
Stage 3. Intrepreneurial MarketingStage 3. Intrepreneurial Marketing
Marketing Management Practice
Production ConceptProduction Concept
Product ConceptProduct Concept
Selling ConceptSelling Concept
Marketing ConceptMarketing Concept
Societal Marketing ConceptSocietal Marketing Concept
Marketing Management Philosophies
Difference between Marketing and Sales Concepts
Societal Marketing Concept
The New Marketing Landscape
Learn About &Track CustomersWith Databases
Communicate WithCustomers in Groups
Or One-on-One
Create Products &Services Tailored to
Meet Customer Needs
Distribute Products More Efficiently &
Effectively
Connecting Technologies in Computers,
Telecommunications,Information, & Transportation
Help To:
Technologies for Connecting
The Internet
• The Internet has been hailed as the technology behind a New Economy.
• New applications include:• “click-and-mortar” companies• “click-only” companies• Business-to-business e-commerce
• Business-to-business transactions online are expected to reach $3.6 trillion in 2003.
• By 2005, 500,000 companies will use the Internet to do business.
Connections With Customers
• Most marketers are targeting fewer, potentially more profitable customers.
• Asking:• What value does the customer bring
to the organization?• Are they worth pursuing?
• Connecting for a customer’s lifetime.
Direct Connections With Customers
• Many companies use technologies to let them connect more directly with their customers.
• Products available via telephone, mail-order catalogs, kiosks and e-commerce.
• Some firms sell only via direct channels (i.e. Dell Computer, http://www.amazon.com/), others use a combination.
• Direct marketing is redefining the buyer’s role in connecting with sellers.
• Buyers are active participants in shaping the marketing offer and process; some buyers design their own products online such as at http://www.us.levis.com/.
Connections With Marketing’s Partners
• Connecting Inside the Company
• Every employee must be customer-focused
• Teams coordinate efforts toward customers
• Connecting With Outside Partners
• Supply Chain Management
• Strategic Alliances
Connections With the World Around Us
Global Connections
Value Connections
Social Responsibility Connections
Broadening Connections