BA 631 Marketing Management 15/04/60 Marketing Management Session I : Introduction and Overview Customer Value, Satisfaction and Retention MM 601, IBMP, Thammasat University, Semester 2/2552

BA 631 Marketing Management 15/04/60 Agenda Course Organization Course Materials Tasks of Marketing Major Concepts & Tools of Marketing How has marketing management changed? What are customer value, satisfaction, and loyalty, and how can company delivers them?

BA 631 Marketing Management 15/04/60 Course Organization Part I - Understanding Marketing Management Part II - Analyzing Marketing Opportunities Part III - Developing Marketing Strategies Part IV – Developing Marketing Offerings

BA 631 Marketing Management 15/04/60 Course Materials Text Reading – Marketing Management, Kotler & Keller, 13th Edition Mini Cases Marketing Plan

BA 631 Marketing Management 15/04/60 What is Marketing? (Social Definition) Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.

BA 631 Marketing Management 15/04/60 What is Marketing? (Managerial Definition) Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

BA 631 Marketing Management 15/04/60 Marketing Management Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

BA 631 Marketing Management 15/04/60 What is marketed? Goods Services Events & Experiences Persons Places & Properties Organizations Information Ideas

BA 631 Marketing Management 15/04/60 Simple Marketing System Communication Industry (a collection of sellers) Market of Buyers) Goods/services Money Information

BA 631 Marketing Management 15/04/60 Structure of Flows Resources Resource markets Money Taxes Taxes, goods Services, money Government markets Services Manufacturer markets Consumer markets Intermediary Goods, services Money

BA 631 Marketing Management 15/04/60 Company Orientations toward the Marketplace Production Concept Consumers prefer products that are widely available and inexpensive Mass Production, Cost Leadership, Wide Coverage Product Concept Consumers favor products that offer the most quality, performance, or innovative features Best Quality, Performance, Innovative Product

BA 631 Marketing Management 15/04/60 Company Orientations toward the Marketplace Selling Concept Consumers will buy products only if the company aggressively promotes/sells these products High Sales Volume, Short Term Oriented Marketing Concept Focuses on needs/wants of target markets & delivering value better than competitors Target Market, Customer’s need, Coordinated Marketing, Profitability

BA 631 Marketing Management 15/04/60 Selling & Marketing Concepts Factory Existing products Selling and promotion Profits through sales volume Starting point Focus Means Ends (a) The selling concept Market Integrated marketing Profits through customer satisfaction Customer needs (b) The marketing concept

BA 631 Marketing Management 15/04/60 Company Orientations toward the Marketplace Develop, design, implement marketing programs, processes and activities that recognizes their breadth, and interdependencies. Holistic Marketing Concept Relationship Marketing, Internal Marketing, Integrated Marketing, Socially responsible marketing

BA 631 Marketing Management 15/04/60 Company Orientations toward the Marketplace

BA 631 Marketing Management 15/04/60 Marketing Management Tasks Developing marketing strategies Capturing marketing insights Connecting with customers Building strong brands Shaping market offerings Delivering value Communicating value Creating long-term growth

BA 631 Marketing Management 15/04/60 Customer Value The customers will buy from the firm that they perceive offers the highest customer delivered value.

BA 631 Marketing Management 15/04/60 Determinants of Customer Delivered Value Image value Personnel value Services value Product value Total customer value Customer delivered value Monetary cost Time cost Energy cost Psychic cost Total customer cost

BA 631 Marketing Management 15/04/60 Customer Satisfaction Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations Satisfaction is a function of perceived performance and expectations

BA 631 Marketing Management 15/04/60 Customer Expectation Is based upon the customer’s past buying experiences, the opinions of friends and associates, and marketer and competitor information and promises.

BA 631 Marketing Management 15/04/60 Satisfied Customer Are loyal longer Buy more (new products & upgrades) Spread favorable word-of-mouth Are more brand loyal (less price sensitive) Offer feedback Reduce transaction costs

BA 631 Marketing Management 15/04/60 Customer Loyalty A deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior.

BA 631 Marketing Management Tracking and Measuring Customer Satisfaction BA 631 Marketing Management 15/04/60 Complaints and Suggestion Systems Periodic Survey Ghost Shopping (Mystery shoppers) Lost Customer Analysis Monitor competitive performance

BA 631 Marketing Management Retaining Customers BA 631 Marketing Management 15/04/60 Intense competition and maturity of market increase the costs of attracting new customers. It costs much less to service an existing customer than to create a new one. Acquisition of customers can cost 5 times more than retaining current customers. Repeat purchases and loyal customers are the main driver of profitability for most businesses.

BA 631 Marketing Management 15/04/60 Forming strong customer bonds Adding Financial Benefits - Frequency Marketing Programs Adding Social Benefits - Brand Communities Adding Structural Ties - Special equipment or computer software, EDI

BA 631 Marketing Management 15/04/60 Customer Profitability The 80/20/30 rule of customer profitability The top 20% of clients generate 80% of total profit The bottom 30% of clients consume half of all profits generated by other customers

BA 631 Marketing Management 15/04/60 The Profit Triangle Profit Value creation Internal operations Competitive advantage

BA 631 Marketing Management 15/04/60 Marketing Overview 3 C’s Customer Competitor Company Market Research S (Segment) T (Target) P (Position) 4 P’s Product Price Place Promotion

BA 631 Marketing Management 15/04/60 The Four Ps

BA 631 Marketing Management 15/04/60 The Four Ps & The Four Cs Marketing Mix Product Place Promotion Price Conven- ience Customer Solution Customer Cost Communication