1. Chapter 1 Marketing: Managing Profitable Customer Relationships
PowerPoint by
Kotler & Armstrong
(and modified by me)

2. Chapter Big Ideas The Big Ideas in this chapter are: Marketing is….
Major concepts and tools of marketing
Market orientations
CRM

3. Marketing So what’s Marketing? Function: noun
Etymology: Middle English, from Old North French, from Latin mercatus ---trade or marketplace

4. Marketing
Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of goods, services and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment. (AMA)

5. Marketing
Marketing is the process of planning and executing (Management function)
the conception, pricing, promotion, and distribution (4 P’s)
of goods, services and ideas (Product)
to facilitate satisfying exchange relationships (buying and selling)
with customers (Target/Segment)
in a dynamic environment. (External factors)

6. Factors Influencing Company Marketing
The Four P’s

7. Elements of a Modern Marketing System

8. Core Marketing Concepts

9. Marketing Concepts and Tools
Core Marketing Concepts
1. Target Markets and Segmentation
2. Marketers and Prospects
3. Needs, Wants, and Demands
Core Marketing Concepts
Target Markets and Segmentation
Every product or service contains features that a marketer must translate into benefits for a target market.
The consumer perceives these benefits to be available in a product and directly impacts the perceived ability to meet the consumer need(s) or want(s).
Marketers and Prospects
A marketer is someone actively seeking one or more prospects for an exchange of values.
A prospect has been identified as willing and able to engage in the exchange.
Needs, Wants, and Demands
To need is to be in a state of felt deprivation of some basic satisfaction.
Wants are desires for specific satisfiers of needs.
Demands are wants for specific products that are backed by an ability and willingness to buy them.

10. Marketing Concepts and Tools
4. Product, Offering, and Brand
5. Value and Satisfaction
Value
Value = Benefits / Costs =
(Functional benefits + Emotional benefits) /
(Monetary costs + Time costs + Energy costs + Psychic costs)
Product or offering
Anything offered for sale that satisfies a need or want.
Products consist of three primary components: goods, services and ideas.
The physical product provides the desired service or action.
Value and Satisfaction (A ratio)
Value is the consumer’s estimate of the product’s overall capacity to satisfy his or her needs
Needs are determined according to the lowest possible cost of acquisition, ownership and use.

11. Marketing Concepts and Tools
6. Exchange and Transactions
7. Relationships and Networks
Relationship marketing
Marketing network
8. Marketing Channels
9. Supply Chain
10. Competition
Brand competition
Industry competition
Form competition
Generic competition
Exchange and Transactions
Exchange means obtaining a desired product by offering something desirable in return.
Five conditions must be satisfied
2 parties
Something of value to exchange between the two
Each party can communicate and deliver
Each party is free to reject the offer
Each party believe it is appropriate to deal with each other
A transaction is the trade of values (involves several dimensions). Barter, transfer
Relationships and Networks
Relationship marketing seeks long-term, “win-win” transactions between marketers and key parties (suppliers, customers, distributors).
The ultimate outcome of relationship marketing is a unique company asset called a marketing network of mutually profitable business relationships.

12. Marketing Concepts and Tools
11. Marketing Environment
12. Marketing Mix (4 P’s)
13. Marketing Program
Marketing Channels
This is how you reach the target market, and it is critical.
To do this the marketer can use two-way communication channels (media including- newspapers and through the Internet), versus more traditional means.
The marketer also must decide on the distribution channel, trade channels, and selling channels (to effect transactions).
Supply chain
The long channel process that reaches from the raw materials and components to the final product / buyers.
Perceived as a value delivery system.
Competition
Includes actual and potential rival offerings and substitutes.
A broad view of competition assists the marketer to recognize the levels of competition, based on substitutability:
brand – other companies with similar products to the same customer at similar prices (economy, luxury etc)
industry – other companies that make the same product or class of product (autos)
form – other companies that make products that supply the same service (motorcycles, bikes, trucks)
generic – All companies that compete for the same dollar (durables, vacations, etc)

13. Management Orientations Toward the Marketplace
Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept

14. CRM
CRM is what?
Customer relationship management (also called CRM) is defined as:
“the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.”

15. CRM
It costs 5 to 10 times MORE to attract a new customer than it does to keep a current customer satisfied.
Marketers must be concerned with the lifetime value of the customer.

16. Marketing Challenges Source of marketplace changes:
Technological advances
Rapid globalization
Continuing social and economic shifts

17. Chapter 2 company and Marketing Strategy: Partnering to Build Customer Relationships
PowerPoint by
Kotler & Armstrong
(and modified by me)

18. Chapter 2 – Big Ideas Strategic planning
Value creation (in many forms)

19. Strategic Planning Strategic Planning is?
The Process of Developing and Maintaining a Strategic Fit Between the Organization’s Goals and Capabilities and Its Changing Marketing Opportunities.

20. Steps in Strategic Planning

21. The Mission Statement What’s Mission Statement?
A statement of the organization’s purpose
What it wants to accomplish in the larger environment
Should be market oriented and defined in terms of customer needs.

22. Questions a Mission Statement Should Answer
What is our Business?
Who is the Customer?
What do Consumers Value?
What Should our Business Be?

23. Mission Statements Should:
Be Realistic
Be Specific
Fit the Market Environment
Be Based on Distinctive Competencies
Be Motivating
2-11

24. Designing the Business Portfolio
A business portfolio is what?
The business portfolio is the collection of businesses and products that make up the company.
During the strategy process a company must do what?
analyze its current business portfolio or Strategic Business Units (SBUs),
decide which SBUs should receive more, less, or no investment,
develop growth strategies for growth or downsizing.

25. Portfolio Analysis A portfolio analysis is what?
An evaluation of the products and business making up the company.
Resulting in?
Identifying where resources are directed or taken away
Invest in to more profitable businesses and
Divest in weaker ones (phased down or dropped).

26. Strategic Business Unit
A SBU is what? (hint: )
A unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses.
Can be a company division, a product line within a division, or sometimes a single product or brand.

27. Strategic Planning Tools
BCG’s growth share matrix
Ansoff’s product/market expansion grid

28. Analyzing Current SBU’s: BCG Growth-Share Matrix
Relative Market Share
High Low
Stars
High growth & share
May need heavy
investment to grow
Eventually, growth will slow
Question Marks
Low share SBUs in high growth
markets
Require cash to hold
market share
Build into Stars or phase out ?
Market Growth Rate
Low High
Cash Cows
Low growth, high share
Established, successful
SBU’s
Produce cash
Dogs
Low growth & share
Generate cash to sustain self
Do not promise to be cash
sources

29. Problems With Matrix Approaches
Can be Difficult, Time Consuming, Costly to Implement
Difficult to Define SBUs & Measure Market Share/Growth
Focus on Current Businesses, Not Future Planning
Problems With Matrix Approaches
Can Place too Much Emphasis on Growth
Can Lead to Poorly Planned Diversification

30. Product/Market Expansion Grid
Existing
New
Market Penetration
Product Development
Existing
M A R K E T
Market Development
New
Diversification
2-32

31. Value Value is what? Function: noun Pronunciation: 'val-(")yü
Etymology: past participle of Latin valEre – to be worth, be strong, be powerful, be influential, be healthy
Meaning:
“Relative worth, utility, or importance”
Value
Value = Benefits / Costs =
(Functional benefits + Emotional benefits)
(Monetary costs + Time costs + Energy costs + Psychic costs)

32. Value Proposition Value Proposition is what?
A set of benefits offered by an organization to satisfy a customer’s needs, wants and demands

33. Value Chain So what’s a Value Chain? A Michael Porter concept
A tool to conceptualize and identify ways to create more customer value
9 Activities
5 primary activities
Inbound logistics, operations, outbound logistics, marketing and sales, service
4 support activities
Procurement, technology development, human resources, firm infrastructure

34. The Generic Value Chain

35. Value Delivery Network
So what’s a value delivery network?
A network made up of the company, suppliers, distributors, and ultimately customers who “partner” with each other to improve the performance of the entire system

36. Value Delivery Network
Company’s Value Chain
Distributors
Suppliers
Customers

37. Market Segmentation So what’s market segmentation?
The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products of marketing programs.
A market segment consists of consumers who respond in a similar way to a given set of marketing efforts.

38. Target Marketing So what’s target marketing?
Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter or target.
Target segments that can sustain profitability.

39. Market Positioning
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers (e.g., Chevy Blazer: “Like a rock”)
Process begins with differentiating the company’s marketing offer so it gives consumers more value.

40. The Marketing Mix
The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market.
Consists of the 4 P’s
Product
Price
Place
Promotion

41. The 4 P’s of the Marketing Mix

42. Managing the Marketing Effort
Strategic
Tactical

43. Major Sections of Product/Brand Plan
Executive Summary
Current Marketing Situation
Analysis of Threats and Opportunities
Objectives for the Brand
Marketing Strategy
Action Programs
Marketing Budget
Controls

44. Marketing Control Process

45. Marketing Concept Value Creation
The Marketing Concept: Assumes the key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities toward determining and satisfying the needs and wants of target markets.
Target Market - no company can operate in every market and satisfy every need.
Customer Needs - it’s not enough to just find the market; marketers must also understand their customer's needs and wants. This is not a simple task.
Integrated Marketing - all of a company’s departments must work together to serve the customer’s interests. This begins among the various marketing functions and carries out into other departments.
Profitability - the ultimate purpose of marketing is to help organizations achieve profitability goals.
Hurdles to Adopting the Marketing Concept:
Organized Resistance - some departments see marketing as a threat to their power in the organization
Slow Learning - despite efforts by management, learning comes slow
Fast Forgetting - here is a strong tendency to forget marketing principles

46. Value and Value Proposition
The relative worth, utility or importance
Value = Benefits / Costs =
(Functional benefits + Emotional benefits) /
(Monetary costs + Time costs + Energy costs + Psychic costs)
Value Proposition
A set of benefits offered by an organization to satisfy a customer’s needs, wants and demands

47. Value Chain
A tool to conceptualize and identify ways to create more customer value
9 Activities
5 primary activities
Inbound logistics, operations, outbound logistics, marketing and sales, service
4 support activities
Procurement, technology development, human resources, firm infrastructure

48. The Generic Value Chain

49. Value Delivery Network
A network made up of the company, suppliers, distributors, and ultimately customers who “partner” with each other to improve the performance of the entire system

50. Value Delivery Network
Company’s Value Chain
Distributors
Suppliers
Customers

51. Market Segmentation
The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products of marketing programs.
A market segment consists of consumers who respond in a similar way to a given set of marketing efforts.

52. Target Marketing So what’s target marketing?
Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Target segments that can sustain profitability.

53. Market Positioning
Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers (e.g., Chevy Blazer: “Like a rock”)
Process begins with differentiating the company’s marketing offer so it gives consumers more value.

54. The Marketing Mix
The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market.
Consists of the 4 P’s
Product
Price
Place
Promotion

55. The 4 P’s of the Marketing Mix