2 ROAD MAP: Previewing the Concepts Define marketing and outline the steps in the marketing process.Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts.Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.Discuss customer relationship management and strategies for building lasting customer relationships.Describe the major trends and forces that are changing the marketing landscape in this new age of relationships.
3 Chapter 1What Is Marketing?Simple Definition: Marketing is managing profitable customer relationships.Goals:Attract new customers by promising superior value.Keep and grow current customers by delivering satisfaction.
4 Marketing Old vs. New Old view of marketing: Making a sale -- “Telling and Selling”New view of marketing:Satisfying customer needs
5 Chapter 1Marketing DefinedA social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.
6 A Simple Model of the Marketing Process Create value for customers and build customer relationshipsConstruct a marketing programthat delivers superior valueUnderstand the marketplace and customer needs and wantsDesign a customer-driven marketingstrategyCapture value from customers in returnCapture value from customers to create profits and customer equityBuild profitable relationships and createcustomer delight
12 Need / Want Fulfillment Needs and Wants Fulfilled through a Marketing Offer :Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.
13 What Satisfies Consumers’ Needs and Wants? Chapter 1What Satisfies Consumers’ Needs and Wants?ProductsAnything that can be Offered to a Market to Satisfy a Need or WantPersonsPlacesOrganizationsInformationIdeasThe combination of tangible products, particular people, and certain activities in a particular place creates an experience (e.g., Disneyland)We are moving toward being a less manufacturing-based society and a more service-oriented society.ServicesActivity or Benefit Offered for Sale That is EssentiallyIntangible and Does Not Result in the Ownership of Anything
14 Product as an IdeaProducts do not have to be physical objects. Here the “product” is an idea—protecting animals.
15 Marketing MyopiaSellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products.They focus on the “wants” and lose sight of the “needs.”
16 Value and Satisfaction ExpectationPerformance108ExpectationPerformance810If performance is lower than expectations, satisfaction is low.If performance is higher than expectations, satisfaction is high.
17 Exchange vs. Transaction Chapter 1Exchange vs. TransactionExchange:Act of obtaining a desired object from someone by offering something in return.Transaction:A trade of values between two parties.One party gives X to another party and gets Y in return. Can include cash, credit, check, or barter.
18 What is a Market? The set of actual and potential buyers of a product. These people share a need or want that can be satisfied through exchange relationships.
20 Marketing ManagementThe art and science of choosing target markets and building profitable relationships with them.Questions to ask:What customers will we serve?What is our target market?How can we best serve these customers?What is our value proposition?
21 Segmentation and Target Marketing #1#2Market Segmentation:Divide the market into segments of customersTarget Marketing:Select the segment to cultivate
22 Interactive Student Assignment Chapter 1Pair up with another student and share your thoughts with one another on the following items:To what market segments do you think you belong?What personal traits, variables, or factors characterize you as belonging to those segments?
23 Marketing Management Demand Management Demarketing Chapter 1Marketing ManagementDemandManagementFinding and increasing demand, also changing or reducing demand, such as in demarketing.Temporarily or permanently reducing the number of customers or shifting their demand.Demarketing
24 It cleans and freshens like sunshine! Value PropositionThe set of benefits or values a company promises to deliver to consumers to satisfy their needs.It cleans and freshens like sunshine!
29 Interactive Student Assignment Chapter 1Interactive Student AssignmentPair up with another student and share your thoughts with one another on the following topic:Based on your personal experience, discuss with your partner ways you have seen organizations implement the societal marketing concept.
30 The Marketing Mix Product Price Customer Needs Promotion Distribution Chapter 1The Marketing MixCustomerNeedsProductPricePromotionDistribution1-9
31 Customer Relationship Management The process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
32 Customer Perceived Value Customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.
33 Customer Perceived Value Is FedEx’s service worth the higher price? FedEx thinks so. It promises reliability, speed, and peace of mind. FedEx ads say “Need to get it there or else? Don’t worry. There’s a FedEx for that.”
34 Customer Satisfaction Dependent on the product’s perceived performance relative to a buyer’s expectations.
35 Customer Relationship Levels Full PartnershipBasic RelationshipContinuum
36 Focus on Profitable Customers Loyalty and RetentionSocial BenefitsFinancial BenefitsStructural TiesFocus on Profitable Customers
38 Customer Loyalty & Retention Customer Lifetime ValueThe entire stream of purchases that the customer would make over a lifetime of patronage.Share of CustomerThe share a company gets of the customers purchasing in their product categories.
39 Customer Lifetime Value To keep customers coming back, Stew Leonard’s has created the “Disneyland of dairy stores.” Rule #1—the customer is always right. Rule #2—if the customer is ever wrong, reread Rule #1.
40 Customer EquityCustomer equity is the total combined customer lifetime values of all the company’s customers.
41 Customer Relationship Groups ButterfliesTrue FriendsGood fit between company’s offerings and customer’s needs; high profit potentialGood fit between company’s offerings and customer’s needs; highest profit potentialHighProfitabilityStrangersBarnaclesLittle fit between company’s offerings and customer’s needs; lowest profit potentialLimited fit between company’s offerings and customer’s needs; low profit potentialLowShort-term customersLong-term customersProjected loyalty
42 Chapter 1The InternetThe Internet has been hailed as the technology behind a New Economy.Marketing applications include:“Click-and-mortar” companies“Click-only” companiesBusiness-to-business e-commerceBusiness-to-business transactions online are expected to reach $4.3 trillion in 2005.By 2005, 500,000 companies will use the Internet to do business.
43 The New Digital AgeThe recent technology boom has had a major impact on the ways marketers connect with and bring value to their customers.
44 New Marketing Landscape Chapter 1New Marketing LandscapeRapid GlobalizationNot-for-ProfitMarketingEthics & SocialResponsibilityNew World of MarketingRelationships
45 Rest Stop: Reviewing the Concepts Chapter 1Rest Stop: Reviewing the ConceptsDefine marketing and outline the steps in the marketing process.Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts.Identify the key elements of a customer-driven marketing strategy and discuss marketing management orientations that guide marketing strategy.Discuss customer relationship management and strategies for building lasting customer relationships.Describe the major trends and forces that are changing the marketing landscape in this new age of relationships.