1. Marketing: Managing Profitable Customer Relationships
Chapter 1

2. Learning Goals Define marketing and the marketing process.
Explain the importance of understanding customers and identify the five core marketplace concepts
Identify the elements of a customer-driven marketing strategy and discuss the marketing management orientations.
Discuss customer relationship management

3. Goal 1: Define marketing and the marketing process.
What is Marketing?
Marketing Defined:
“The process by which companies create value for the customers and build strong customer relationships in order to capture value from customers in return”
Marketing is about managing profitable customer relationships
The twofold goal of marketing is-
Attracting new customers
Retaining and growing current customers
Goal 1: Define marketing and the marketing process.

4. Goal 1: Define marketing and the marketing process.
Create value for customers and build customer relationships
Capture value from customers in return
Capture value from customers to create profits and customer quality
Understand the marketplace and customer needs and wants
Construct a marketing program that delivers superior value
Build profitable relationships and create customer delight
Design a Customer-driven marketing strategy
Goal 1: Define marketing and the marketing process.

5. Understanding the Marketplace and customer needs
Needs, wants, and demands
Need
State of felt deprivation
Example: Need food
Wants
The form needs as shaped by culture and the individual
Example: Want a Big Mac
Demands
Wants which are backed by buying power

6. Understanding the Marketplace and customer needs
Marketing offers:
Products
Services
Events
Experiences
Persons
Places
Ideas
Organizations
Information

7. Understanding the Marketplace and customer needs
Value and satisfaction
Value
Customer-perceived value
Customer’s evaluation of the difference between all the benefits and all the cost of a market offering relative to those of competing products.
Customers form expectations regarding value
Marketers must deliver value to consumers
Satisfaction
Customer satisfaction
The extent to which a product’s perceived performance matches a buyer’s expectations
A satisfied customer will buy again and tell others about their good experience

8. Understanding the Marketplace and customer needs
Exchange, transactions and relationships
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
Markets
Market
Set of actual and potential buyers of a product
Marketers seek buyers that are profitable

9. Goal 3: Identify elements of a customer-driven strategy.
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?
Goal 3: Identify elements of a customer-driven strategy.

10. Marketing Management Selecting customers to serve Value proposition
Dividing the market into segments of customers- Market segmentation
Selecting which segments it will go after-
Target marketing
Demarketing
Value proposition
Set of benefits or values it promises to deliver to customers to satisfy their needs.

11. Value Proposition iPhone
Nokia
Nokia

12. Marketing Management Orientations
Selling concept
Marketing concept
Production concept
Product concept
Societal marketing concept
Goal 3: Identify elements of a customer-driven strategy.

13. The Production Concept
Assumes that consumers are interested primarily in product availability at low prices
Marketing objectives:
Cheap, efficient production
Intensive distribution
Market expansion

14. The Product Concept
Assumes that consumers will buy the product that offers them the highest quality, the best performance, and the most features
Marketing objectives:
Quality improvement
Addition of features

15. Marketing Myopia
A focus on the existing product only rather than the consumer needs it presumes to satisfy
Management’s failure to recognize the scope of the business
Product-oriented rather than customer-oriented management endangers future growth

16. Avoiding Marketing Myopia by focusing on benefits
Company
Myopic Description
Marketing oriented description
Cingular
“We are a telephone company”
“We are a communications company”
JetBlue Airways
“We are in the airline business”
“We are in the transportation business”
Sony
“We are in the video game business”
We are in the entertainment Business

17. The Selling Concept
Assumes that consumers are unlikely to buy a product unless they are aggressively persuaded to do so
Marketing objectives:
Sell, sell, sell
Lack of concern for customer needs and satisfaction

18. The Marketing Concept
Assumes that to be successful, a company must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition
Marketing objectives:
Profits through customer satisfaction

19. Societal Marketing Concept
Assumes that marketing strategy should deliver value to customers in a way that maintain and improves both the consumer’s and society’s well-being
Society
(Human Welfare)
Societal
Marketing
Concept
Consumers
(Want Satisfaction)
Company
(Profits)

20. Goal 3: Identify elements of a customer-driven strategy.
The Marketing Plan
Transforms the marketing strategy into action
Includes the marketing mix -The 4P’s of marketing
Product
Price
Place
Promotion
Goal 3: Identify elements of a customer-driven strategy.

21. Goal 3: Identify elements of a customer-driven strategy.
Marketing mixes- 4P’s
Product
Firm must first create a need satisfying market offering
Price
Decide how much it will charge for the offer
Place
Decide how it will make the offer available to target consumers
Promotion
Communicate with target customers about the offer and persuade them of its merit
Goal 3: Identify elements of a customer-driven strategy.

22. 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.
Goal 4: Discuss CRM