0. Marketing: Managing Profitable Customer Relationships
Chapter 1

1. Objectives Be able to define marketing and discuss its core concepts.
Be able to define marketing management and compare the five marketing management orientations.

2. Objectives Understand customer relationship management and strategies.
Realize the major challenges facing marketers in the new “connected” millennium.

3. Amazon Strong sales, no profits Customer-driven to its core
Each customer’s experience is unique
Provides great selection, good value, discovery as well as convenience
A true online community

4. What is Marketing?
Marketing is managing profitable customer relationships
Attracting new customers
Retaining and growing current customers
“Marketing” is NOT synonymous with “sales” or “advertising”

5. What is Marketing? Kotler’s social definition:
“Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.”

6. What is being marketed in this ad?
What Can Be Marketed?
Goods
Services
Places
Ideas
Events
Persons
Properties
Organizations
Information
Experiences
What is being marketed in this ad?

7. Core Marketing Concepts
Figure 1-1:
Core Marketing Concepts

8. Discussion Question
Resellers are a primary market for Nike’s products.
Describe the exchange process between Nike and resellers.
Think beyond the obvious.

9. Elements of a Modern Marketing System
Figure 1-2:
Elements of a Modern Marketing System

10. Marketing Management
Marketing management is “the art and science of choosing target markets and building profitable relationships with them.”
Creating, delivering and communicating superior customer value is key.

11. Marketing Management Customer Management: Demand Management:
Marketers select customers that can be served well and profitably.
Demand Management:
Marketers must deal with different demand states, ranging from no demand to too much demand.

12. Marketing Management
Demarketing: Commuter Connections promotes the use of mass transit and carpooling as an alternative to driving alone.
Clicking the WWW icon will open your web browser and link to the web site pictured in the screen shot.
Commuter Connections

13. Management Orientations Societal Marketing Concept
Marketing Management
Management Orientations
Production Concept
Product Concept
Selling Concept
Marketing Concept
Societal Marketing Concept

14. The Selling and Marketing Concepts Contrasted
Figure 1-3:
The Selling and Marketing Concepts Contrasted

15. Considerations Underlying the Societal Marketing Concept
Figure 1-4:
Considerations Underlying the Societal Marketing Concept

16. Relationship Between Customer Satisfaction and Loyalty
Figure 1-5:
Relationship Between Customer Satisfaction and Loyalty

17. CRM 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.”

18. 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.

19. BusinessNow SatMetrix Video Clip
View what the experts have to say about customer loyalty and the bottom line.
Click the picture above to play video

20. CRM Key Concepts Attracting, retaining and growing customers
Customer value and satisfaction
Perceptions are key
Created by meeting/ exceeding expectations
Loyalty and retention
Many benefits of loyalty
Increases as satisfaction levels increase
Delighting consumers should be the goal
Growing customer share
Cross-selling
Key Concepts
Attracting, retaining and growing customers
Building relationships and customer equity

21. CRM Key Concepts Customer equity
Total combined customer lifetime values of all customers
Measures firm’s performance, but in a manner that looks to the future
Attracting, retaining and growing customers
Building relationships and customer equity

22. CRM Key Concepts Customer relationship levels and tools
Target market typically dictates type of relationship
Basic relationships
Full relationships
Customer loyalty and retention programs
Adding financial benefits
Adding social benefits
Adding structural ties
Key Concepts
Attracting, retaining and growing customers
Building relationships and customer equity

23. Marketing Challenges
Technological advances, rapid globalization, and continuing social and economic shifts are causing marketplace changes.
Major marketing developments can be grouped under the theme of Connecting.

24. Today’s Marketing Connections
Figure 1-6:
Today’s Marketing Connections

25. Marketing Challenges Connecting Via technology With customers
Advances in computers, telecommunications, video-conferencing, etc. are major forces
Databases allow for customization of products, messages and analysis of needs
The Internet
Facilitates anytime, anywhere connections
Facilitates CRM
Creates marketspaces
Via technology
With customers
With marketing partners
With the world

26. Marketing Challenges Connecting Via technology With customers
Selective relationship management is key
Customer profitability analysis separates winners from losers
Growing “share of customer”
Cross-selling and up-selling are helpful
Direct sales to buyers are growing
Via technology
With customers
With marketing partners
With the world

27. Marketing Challenges Connecting Via technology With customers
Partner relationship management involves:
Connecting inside the company
Connecting with outside partners
Supply chain management
Strategic alliances
Via technology
With customers
With marketing partners
With the world

28. Marketing Challenges Connecting Via technology With customers
Globalization
Competition
New opportunities
Greater concern for environmental and social responsibility
Increased marketing by nonprofit and public-sector entities
Social marketing campaigns
Via technology
With customers
With marketing partners
With the world

29. Connecting with Values . . . The Body Shop
Visit the “Our Values” and “About Us” sections of The Body Shop’s web site.
How might the values espoused by the company influence the manner in which the Body Shop . . .
Chooses their strategic partners?
Advertises fragrances to consumers?
Develops new products?
How might these decisions in turn
impact “the bottom line”?
The Body Shop

30. Reconnecting with Teens
Modernizing the Girl Scouts
The Problem:
Campfires and cookies weren’t cutting it with today’s teens. Scouting was perceived as NOT cool and primarily for younger kids.
The Girl Scout Council of Cumberland Valley’s effort to change the image of scouting among teens is depicted in, “The Buntin Group gives Girls Scouts a cooler image,” ADWEEK Southwest, Sept. 9, 2002, v24 i36, p 4(1). The campaign ran regionally in a tri-state area.
See also, “Girl Power,” ADWEEK Western Edition, August 21, 200, v50 i24, p5 for a short description of an earlier campaign undertaken in California and Nevada.
An interesting article by Catharine P. Taylor entitled, “Diversity: Girl Scouts extend multicultural reach; All American group seeks greater diversity,” can be read in the Jan. 28, 2002 issue of Advertising Age, (v73, p. 18).

31. Modernizing the Girl Scouts The Solution
Goal: Adapt the curriculum to the needs of teens
Changed the “Product”: Added activities related to technology and adventure sports: rock-climbing, surfing, martial arts
Goal: Promote a cooler image for the Girl Scouts
Campaign Theme: “Join Troop 2002”
Target Market: Diverse -- Girls of all ages and all races

32. Modernizing the Girl Scouts The Solution
TV Ad Execution: Japanimation style visuals and throbbing electronica music were used to make scouting seem “hip”.
Taglines: “Campfire songs, the remix”; “Be part of a girl band”.
TV Vehicles: MTV, VH1, Animal Planet, Nickelodeon (in TN, KY, and AL regions).
Other Media Used: Stylized posters sent to schools, churches, community centers; interactive media.