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Objectives To be able to understand: The focus of marketing on customer satisfaction. Marketing’s emphasis on creating customer loyalty and relationships. How marketing applies to business and non-business situations. The factors that drive customer satisfaction.

Copyright © 2007 McGraw-Hill Ryerson Limited Objectives To be able to understand: The difference between selling and marketing. The evolution of marketing thinking. The modern marketing concept. The creation of value, the value proposition, and brand equity. The customer’s role at the centre of marketing thinking.

Copyright © 2007 McGraw-Hill Ryerson Limited Customer Satisfaction is the Focus Marketing… refers to anything that a company or organization does that has an impact on the satisfaction of its customers. is the most customer-focused part of a company. involves activities and programs that will contribute to high levels of customer satisfaction by addressing customer needs and wants at a profit.

Copyright © 2007 McGraw-Hill Ryerson Limited Customer Satisfaction is the Focus Customer satisfaction is a long-term marketing objective. Long-term customer satisfaction is considered a valued asset to a business.

Copyright © 2007 McGraw-Hill Ryerson Limited The Give and Get of Marketing

Copyright © 2007 McGraw-Hill Ryerson Limited Customer Expectations and Value Customer satisfaction: Meeting or exceeding customer expectations during the exchange. Exchange = Value Marketing is about adding value through a broadly-defined value proposition, thereby creating customer satisfaction.

Copyright © 2007 McGraw-Hill Ryerson Limited What is Marketing? A series of activities and experiences designed to create, plan, price, promote, and distribute need-satisfying products, services, and ideas to selected customer groups in order to achieve the objectives of both the customer and the organization.

Copyright © 2007 McGraw-Hill Ryerson Limited What’s Involved in Marketing? All activities which have the potential to influence the customer’s long-term satisfaction with the organization and its value proposition.

Copyright © 2007 McGraw-Hill Ryerson Limited Successful Marketing Must be customer-oriented and focused on the quality of the customer relationship. Should be understood and applied by everyone in the organization. A marketing program starts with an idea for a product or service and does not end until the customer’s wants and needs are satisfied.

Copyright © 2007 McGraw-Hill Ryerson Limited Successful Marketing Results in: Brand equity Customer loyalty – the creation of long- term customers Relationships with customers

Copyright © 2007 McGraw-Hill Ryerson Limited The Marketing Mix Conventional View Product Price Distribution Promotion Too narrow! Today’s View Now includes service, processes, technology and employees. Is focused on all aspects of the firm’s operations which affect customer satisfaction. Builds relationships and loyalty.

Copyright © 2007 McGraw-Hill Ryerson Limited Drivers of Customer Satisfaction Factors which drive customer satisfaction: The core product or service offered Support services and systems The technical performance of the firm Interaction with the firm and its employees The emotional connection with customers Customer satisfaction results in relationships. Relationships reduce the threat of brand switching.

Copyright © 2007 McGraw-Hill Ryerson Limited Customer Satisfaction

Copyright © 2007 McGraw-Hill Ryerson Limited Evolution of Marketing Thinking Marketing has evolved through five stages: 1.Product-Focus Stage: Emphasizes producing more and better products. 2.Sales-Orientation Stage: Focus shifts to selling. 3.Customer-Interest Stage: Emphasis shifts to the satisfaction of customer needs. 4.Customer-Service Stage: Highlights customer service as well as good products. 5.Customer-Relationship Stage: Sees a much longer-term focus on building relationships with customers.

Copyright © 2007 McGraw-Hill Ryerson Limited Evolution of Marketing Thinking

Copyright © 2007 McGraw-Hill Ryerson Limited The Modern Marketing Concept Emphasizes: A customer orientation The co-ordination of marketing activities Aims to achieve the mutual long-term objectives of the customer and the organization.

Copyright © 2007 McGraw-Hill Ryerson Limited The Modern Marketing Concept All planning and operations should be focused on creating long-term customer satisfaction. All marketing activities should be co-ordinated. Customer-oriented, co-ordinated marketing is essential to achieve performance objectives, while meeting customers’ needs. Focused on the long-term. Designed to create an emotional connection with the customer.

Copyright © 2007 McGraw-Hill Ryerson Limited Scope of Marketing Today Marketers are focused on stimulating exchanges with markets – B2C or B2B. Markets are made up of customers who play a series of roles: decision makers, consumers, purchasers, and influencers. Marketers must have have a detailed understanding of consumers and their needs and wants. Much happens before, during and after the customer interaction to affect customer satisfaction

Copyright © 2007 McGraw-Hill Ryerson Limited Stages of Customer Interaction

Copyright © 2007 McGraw-Hill Ryerson Limited Customer Value Drives Shareholder Value

Copyright © 2007 McGraw-Hill Ryerson Limited How to Create Value Create the Value Proposition: The sum total of what a company offers the customer, including much more than product and price. Marketing thinking drives a more broadly- defined value proposition.

Copyright © 2007 McGraw-Hill Ryerson Limited Marketing Thinking Drives the Value Proposition

Copyright © 2007 McGraw-Hill Ryerson Limited Customer Relationship Thinking The customer-relationship view of marketing is characterized by 4 concepts: 1.It is very much a long-term strategy 2.Requires that management take the customer’s view 3.The value proposition must be defined very broadly 4.Different measures of success are needed

Copyright © 2007 McGraw-Hill Ryerson Limited Customer Relationship Thinking Will result in a redefinition of the business the company is in: Levi’s  We make blue jeans. Levi’s  We make you look good.

Copyright © 2007 McGraw-Hill Ryerson Limited Getting and Keeping Customers Has led to a new strategic view of marketing. Components of this new view: Retention Referral Relationships Recovery