1. Marketing: Managing Profitable Customer Relationships Presented by Mr. Ahmed El Seddawy AASTMT

2. After studying this chapter, you should be able to : 1. Define marketing and outline the steps in the marketing process 2. Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts 3. Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy 4. Discuss customer relationship management, and identify strategies for creating value for customers and capturing value from customers in return 5. Describe the major trends and forces that are changing the marketing landscape in this age of relationships 1-2

3. 1. What Is Marketing? 2. Understanding the Marketplace and Customer Needs 3. Designing a Customer-Driven Marketing Strategy 4. Preparing an Integrated Marketing Plan and Program 5. Building Customer Relationships 6. Capturing Value from Customers 7. The New Marketing Landscape 8. So, What Is Marketing? Pulling It All Together 1-3

4. Marketing Defined Marketing is the process by which companies create value for customers and build strong customer relationships to capture value from customers in return 1-4

5. A Understand the marketplace B Design a Customer C Build a marketing plan D Build profitable relationships and customer satisfaction E Capture Value from Customers to create profit

6. 1. Understand the marketplace and customer wants and needs 2. Design a customer-driven marketing strategy 3. Build a marketing plan that delivers superior value 4. Build profitable relationships and create customer satisfaction 5. Capture value from customers to create profit and customer equity 1-5

7. 1. Customer Needs, Wants, and Demands  Needs are states of deprivation Physical: e.g. food, clothing, warmth, safety Social: e.g. belonging and affection Individual: e.g. knowledge and self-expression.  Wants are the form that needs take as they are shaped by culture and individual personality  Demands are wants backed by buying power 1-6

8. 2. Market Offerings: Products, Services, and Experiences  Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want  Marketing my opinion is focusing only on existing wants and losing sight of underlying consumer needs  Exchange is the act of obtaining a desired object from someone by offering something in return 1-7

9. 3. Customer Value and Satisfaction Determining by two main factors: 1. Expectations Customers Value and satisfaction 2. Marketers Set the right level of expectations Not too high or too low 1-8

10. 4. Exchanges and Relationships Exchange is the act of obtaining a desired object from someone by offering something in return Relationships consist of actions to build and maintain desirable relationships 1-9

11. 5. Markets and Marketing System Markets are the set of actual and potential buyers of a product Marketing system consists of all of the actors (suppliers, company, competitors, and end users). in the system who are affected by major environmental forces Demographic Economic Physical Technological Political–legal Socio-cultural 1-10

12. Marketing Management Marketing management is the art and science of choosing target markets and building profitable relationships with them  What customers will we serve?  How can we best serve these customers? 1-11

13. Selecting Customers to Serve  Market segmentation: Dividing the markets into segments of customers  Target marketing: Which segments to go after  De-marketing: Marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but to reduce or shift it  Marketing management is:  Customer management  Demand management 1-12

14. Choosing a Value Proposition The value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needs 1-13

15. Marketing Management Orientations Production concept Product concept Selling concept Marketing concept Societal concept 1-14

16. Marketing Management Orientations Production concept is the idea that consumers will favor products that are available or highly affordable 1-15

17. Marketing Management Orientations Product concept is the idea that consumers will favor products that offer the most quality, performance, and features for which the organization should therefore give over its energy to making continuous improvements 1-16

18. Marketing Management Orientations Selling concept is the idea that consumers will not buy enough of the firm’s products unless it undertakes a large scale selling and promotion effort 1-17

19. Marketing Management Orientations Marketing concept is the idea that achieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do 1-18

20. Marketing Management Orientations Societal marketing concept is the idea that a company should make good marketing decisions by considering consumers’ wants, the company’s requirements, consumers’ long-term interests, and society’s long-run interests 1-19

21. Marketing Mix The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing strategy Product Price Promotion Place 1-20

22. Integrated Marketing Program Integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers 1-21

23. Customer Relationship Management (CRM) Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering higher value and satisfaction 1-22

24. Customer Relationship Management (CRM)  Customer perceived value is the difference between total customer value and total customer cost  Customer satisfaction is the extent to which a product’s perceived performance matches a buyer’s expectations 1-23

25. Customer Relationship Management (CRM) Customer Relationship Levels and Tools Basic relationship Full relationships Frequency marketing programs Club marketing programs 1-24

26. The Changing Nature of Customer Relationships  Relating with more carefully selected customers uses selective relationship management to target fewer and more profitable customers  Relating for the long term uses Customer Relationship Management (CRM) to retain current customers and build profitable, long-term relationships  Relating directly uses direct marketing tools (telephone, mail order, kiosks, Internet) to make direct connections with customers 1-25

27. Partner Relationship Management Partner relationship management refers to working closely with partners in other company departments and outside the company to jointly bring greater value to customers  Partners inside the company is every function area interacting with customers Electronically Cross-functional teams  Partners outside the company is how marketers connect with their suppliers, channel partners, and competitors by developing partnerships 1-26

28. Creating Customer Loyalty and Retention Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patron age Growing Share of Customer Share of customer is the fraction of the customer’s purchasing that a company gets in its product categories 1-27

29. Building Customer Equity Customer equity is the total combined customer lifetime values of all the company’s customers Building the right relationships with the right customers Treating customers as assets that need to be managed and maximized Different types of customers require different relationship management strategies Build the right relationship with the right customers 1-28

30. Major Developments Digital age Globalization Ethics and social responsibility Not-for-profit marketing 1-29

31. The New Digital Age 1. Recent technology has had a major impact on the ways marketers connect with and bring value to their customers 2. Market research Learning about and tracking customers 3. Create new customized products 4. Distribution 5. Communication Video conferencing Online data services 1-30

32. The New Digital Age Internet creates market-places and market-spaces Information Entertainment Communication 1-31

33. Rapid Globalization The world is smaller Think globally, work locally 1-32

34. The Call for More Ethics and Social Responsibility Marketers are being called upon to take greater responsibility for the social and environmental impact of their actions in a global economy Social marketing campaigns encourage energy conservation and concern for the environment or discourage smoking, excessive drinking, and drug use 1-33

35. The Growth for Not-for-Profit Marketing Colleges Hospitals Museums Religious groups 1-34