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MarketingMarketing
Chapter 1
Customer ValueCustomer Value
1. Define marketing and the marketing process.2. Explain the importance of understanding
customers and identify the five coremarketplace concepts.
Rest Stop:Rest Stop:Previewing the ConceptsPreviewing the Concepts
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. en y e e emen s o a cus omer- r venmarketing strategy and discuss the marketingmanagement orientations that guide strategy.
4. Discuss customer relationship managementand identify strategies for creating value forand capturing value fromcustomers.
5. Describe the major trends and forces that arechanging the marketing landscape.
Creating Customer Value
Goal:Provide the very bestcustomer service & customerexperience.
ZapposCreatesCustomerValue&RelationshipsFirst Stop
Building Relationships
Service Culture:Built around10 core principles; every newhire takes 4 weeks of customerlo a lt t ra in in
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Customer-centric approach:Free delivery, free returns,365 day return policy &service upgrades.
Results:75% of sales comefrom current customers,tremendous sales growthdespite poor economy, 10million customers servedannually.
.
Commitment:During training,employees are offered $2000 toquit; only 1% do so.
Lifelong relationships are thegoal:Employees comparisonshop other Web sites; socialnetworking is used for directcontact with customers;customer feedback and criticismis strongly encouraged andvalued.
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What Is Marketing?
Simple definition:Marketing is managing profitablecustomer relationships.
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oa s:1. Attract new customers by promising
superior value.
2. Keep and grow current customer-base by delivering satisfaction.
Marketing Defined
Marketing is the process by whichcompanies create value for customers andbuild strong customer relationships in orderto capture value from customers in return.
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OLDviewofmarketing:
Makingasale tellingandselling
NEWviewofmarketing:
Satisfyingcustomerneeds
The Marketing Process
A simple model of the marketing process:Understand the marketplace and customer
needs and wants.
Design a customer-driven marketing strategy.
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Construct an integrated marketing programthat delivers superior value.
Build profitable relationships and createcustomer delight.
Capture value from customers to createprofits and customer equity.
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Core Concepts
Marketers must understand five corecustomer and marketplace concepts:Needs, wants, and demands
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ar e o er ngs
Value and satisfaction
Exchanges and relationships
Markets
Needs, Wants, and Demands
Need:State of felt deprivation including physical,social, and individual needs.
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ys ca , soc a , an n v ua nee s
Wants:Form that a human need takes, as shapedby culture and individual personality.
Wants + Buying Power = Demand
Marketing Offerings
Needs and wants are fulfilled througha Marketing Offer:
Some combination of products,
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services, information, or experiencesoffered to a market to satisfy a need orwant.
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Market Offerings
Products:Persons, places, organizations, information,and ideas.
Services:
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Activity or benefit offered for sale that isessentially intangible and does not result inownership.
Brand experiences:Should immerse the consumer in the brand
experience and may be intensely personal.
Marketing Myopia
Marketing myopia:Occurs when sellers pay more attention
to the specific products they offer than
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o e ene s an exper encesproduced by the products.
They focus on the wants and lose sight
of the needs.
Customer Value and Satisfaction
Care must be taken when settingexpectations for market offerings:
If performance islower than
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expectations, satisfaction is low.If performance ishigher than
expectations, satisfaction is high.
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Exchanges and Relationships
Exchange:Act of obtaining a desired object from
someone by offering something in
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.
Relationships:Marketing actions build and maintain
relationships with target audiencesinvolving an idea, product, service, orother object. Value builds relationships.
What Is a Market?
A market:Is the set of actual and potential buyers
of a product.
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These people share a need or wantthat can be satisfied throughexchange relationships.
Modern Marketing Systems
Main elements in a modern marketingsystem include:Suppliers
Company (marketer)
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CompetitorsMarketing intermediaries
Consumers
Major environmental forces affect eachelement.
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Marketing Management
The art and science of choosingtarget markets and building profitablerelationships with them.
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Aim is to find, attract, keep, and growcustomers by creating, delivering, and
communicating superior value.
Marketing Management
Designing a winning marketingstrategy requires answers to thefollowing questions:
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1. Whatcustomerswillweserve? Whatisourtargetmarket?
2. Howcanwebestservethesecustomers?
Whatisourvalueproposition?
Selecting Customers to Serve
Market segmentation:Dividing the market into segments of
customers.
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Target marketing:Selecting one or more segments to
cultivate.
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Choosing a Value Proposition
The set of benefits or values acompany promises to deliver toconsumers to satisfy their needs.
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Value propositions dictate how firms willdifferentiate and position their brands in
the marketplace.
Marketing ManagementOrientations
Organizations design and carry outtheir marketing strategies under fivealternate concepts:
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Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept
The Marketing Concept
The marketing concept:A marketing management philosophy
that holds that achieving organizational
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goa s epen s on nowng e nee sand wants of target markets anddelivering the desired satisfaction better
than competitors.
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The SocietalMarketing Concept
The societal marketing concept:The idea that a companys marketing
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wants, the companys desires,consumers long-run interests, andsocietys long-run interests.
The Integrated Marketing Plan
Transforms the marketing strategyinto action.
Includes the marketing mix and 4 Ps
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of marketing:Product
Price
Place (Distribution)
Promotion
Building Customer Relationships
Customer relationship management:The overall process of building and
maintaining profitable customer
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re a ons ps y e ver ng super orcustomer value and satisfaction.
CRM deals with all aspects of acquiring,keeping, and growing customers.
Customer value and satisfaction are key.
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Customer Perceived Value
Customer perceived value:Customers evaluation of the difference
between all of the benefits and all of the
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cos s o a mar e ng o er re a ve o those of competing offers.
Perceptions may be subjective
To some customers value might meanpaying more to get more.
Customer Satisfaction
Customer satisfaction:Extent to which the products perceived
performance matches a buyers
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expec a ons.
High levels of customer satisfaction oftenleads to consumer loyalty.
Some firms seek to DELIGHT customers byexceeding expectations.
Profitability must be considered.
Customer Relationships
Firms may choose to buildrelationships at different levels.
Loyalty and retention programs build
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Frequency marketing programs
Club marketing programs
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Changing Nature of Relationships
Customer profitability analysis eliminates losingcustomers and selects profitable ones withwhom relationships should be developed.
Firms related more deeply and interactively via-
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, , ,video sharing.
Embracing customer-managed relationshipsrequires marketing via attraction rather thanintrusion.
Consumer-generated marketing has become asignificant marketing force.
Partner Relationship Marketing
Marketing partners help createcustomer value and assist in buildingcustomer relationships.
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Partners inside the firm:Cross-functional customer teams
Partners outside the firm:Supply chain management
Capturing Value From Customers
Value is captured from customers viacurrent and future sales, marketshare, and profit.
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satisfied loyal customers who buy more.
Key outcomes of customer valueinclude customer loyalty and retention,share of market, share of customer, andcustomer equity.
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Customer Equity
The total combined customer lifetimevalues of all the companys currentand potential customers.
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Manage equity by:Classifying customers by projected
loyalty and potential profitability.
Manage each group accordingly.
Capturing Value From Customers
Customer lifetime valueThe value of the entire stream of
purchases that the customer would
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ma e over a e me o pa ronage.
Share of customerThe portion of the customers
purchasing that a company gets in theirproduct categories.
Changing Marketing Landscape
The uncertain economic environment The digital age Ra id lobalization
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Sustainable marketing call for moresocial responsibility
Growth of not-for-profit marketing
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1. Define marketing and the marketing process.2. Explain the importance of understanding
customers and identify the five coremarketplace concepts.
3. Identif the elements of a customer-driven
Rest Stop:Reviewing the Concepts
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marketing strategy and discuss the marketingmanagement orientations that guide strategy.
4. Discuss customer relationship managementand identify strategies for creating value forand capturing value fromcustomers.
5. Describe the major trends and forces that arechanging the marketing landscape.
Copyright 2011, Pearson Education Inc. Publishing asPrentice-
Hall
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All rights reserved. No part of this publication may be reproduced, stored in aretrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior writtenpermission of the publisher. Printed in the United States of America.
Copyright 2011 Pearson Education, Inc.Copyright 2011 Pearson Education, Inc.Publishing as Prentice HallPublishing as Prentice Hall
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