2 ROAD MAP: Previewing the Concepts Chapter 1ROAD MAP: Previewing the ConceptsDefine marketing and outline the steps in the marketing process.Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts.Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.Discuss customer relationship management and strategies for building lasting customer relationships.Describe the major trends and forces that are changing the marketing landscape in this new age of relationships.
3 Chapter 1What Is Marketing?Simple Definition: Marketing is managing profitable customer relationships.Goals:Attract new customers by promising superior value.Keep and grow current customers by delivering satisfaction.
4 Marketing Old vs. New Old view of marketing: Chapter 1Marketing Old vs. NewOld view of marketing:Making a sale -- “Telling and Selling”New view of marketing:Satisfying customer needs
5 Chapter 1Marketing DefinedA 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 A Simple Model of the Marketing Process Chapter 1A Simple Model of the Marketing ProcessCreate value for customers and build customer relationshipsConstruct a marketing programthat delivers superior valueUnderstand the marketplace and customer needs and wantsDesign a customer-driven marketingstrategyCapture value from customers in returnCapture value from customers to create profits and customer equityBuild profitable relationships and createcustomer delight
7 What are Consumers’ Needs, Wants, and Demands? Chapter 1What are Consumers’ Needs, Wants, and Demands?
8 Chapter 1This Is a NeedNeeds - state of felt deprivation including physical, social, and individual needs.
9 Types of Needs Physical: Social: Individual: Chapter 1Types of NeedsPhysical:Food, clothing, shelter, safetySocial:Belonging, affectionIndividual:Learning, knowledge, self-expression
10 Chapter 1This Is a WantWants - form that a human need takes, as shaped by culture and individual personality.
11 Chapter 1This Is DemandWantsBuying Power“Demand”
12 Need / Want Fulfillment Chapter 1Need / Want FulfillmentNeeds and Wants Fulfilled through a Marketing Offer :Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.
13 What Satisfies Consumers’ Needs and Wants? Chapter 1What Satisfies Consumers’ Needs and Wants?ProductsAnything that can be Offered to a Market to Satisfy a Need or WantPersonsPlacesOrganizationsInformationIdeasThe combination of tangible products, particular people, and certain activities in a particular place creates an experience (e.g., Disneyland)We are moving toward being a less manufacturing-based society and a more service-oriented society.ServicesActivity or Benefit Offered for Sale That is EssentiallyIntangible and Does Not Result in the Ownership of Anything
14 Chapter 1Product as an IdeaProducts do not have to be physical objects. Here the “product” is an idea—protecting animals.
15 Chapter 1Marketing MyopiaSellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products.They focus on the “wants” and lose sight of the “needs.”
16 Value and Satisfaction Chapter 1Value and SatisfactionExpectationPerformance108ExpectationPerformance810If performance is lower than expectations, satisfaction is low.If performance is higher than expectations, satisfaction is high.
17 Exchange vs. Transaction Chapter 1Exchange vs. TransactionExchange:Act of obtaining a desired object from someone by offering something in return.Transaction:A trade of values between two parties.One party gives X to another party and gets Y in return. Can include cash, credit, check, or barter.
18 What is a Market? The set of actual and potential buyers of a product. Chapter 1What is a Market?The set of actual and potential buyers of a product.These people share a need or want that can be satisfied through exchange relationships.
19 Elements of a Modern Marketing System Chapter 1Elements of a Modern Marketing System
20 Chapter 1Marketing ManagementThe art and science of choosing target markets and building profitable relationships with them.Questions to ask:What customers will we serve?What is our target market?How can we best serve these customers?What is our value proposition?
21 Segmentation and Target Marketing Chapter 1Segmentation and Target Marketing#1#2Market Segmentation:Divide the market into segments of customersTarget Marketing:Select the segment to cultivate
22 Marketing Management Demand Management Demarketing Chapter 1Marketing ManagementDemandManagementFinding and increasing demand, also changing or reducing demand, such as in demarketing.Temporarily or permanently reducing the number of customers or shifting their demand.Demarketing
23 It cleans and freshens like sunshine! Chapter 1Value PropositionThe set of benefits or values a company promises to deliver to consumers to satisfy their needs.It cleans and freshens like sunshine!
25 Marketing and Sales Concepts Contrasted Chapter 1Marketing and Sales Concepts Contrasted
26 Customer-Driven Marketing Chapter 1Customer-Driven MarketingHow many of us would have thought to ask for a “wearable” PC? Marketers must often understand customer needs even better than customers themselves do.
27 The Marketing Mix Product Price Customer Needs Promotion Distribution Chapter 1The Marketing MixCustomerNeedsProductPricePromotionDistribution1-9
28 Customer Relationship Management Chapter 1Customer Relationship ManagementThe process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
29 Customer Perceived Value Chapter 1Customer Perceived ValueCustomer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.
30 Customer Perceived Value Chapter 1Customer Perceived ValueIs FedEx’s service worth the higher price? FedEx thinks so. It promises reliability, speed, and peace of mind. FedEx ads say “Need to get it there or else? Don’t worry. There’s a FedEx for that.”
31 Customer Satisfaction Chapter 1Customer SatisfactionDependent on the product’s perceived performance relative to a buyer’s expectations.
35 Customer Loyalty & Retention Chapter 1Customer Loyalty & RetentionCustomer Lifetime ValueThe entire stream of purchases that the customer would make over a lifetime of patronage.Share of CustomerThe share a company gets of the customers purchasing in their product categories.
36 Customer Lifetime Value Chapter 1Customer Lifetime ValueTo keep customers coming back, Stew Leonard’s has created the “Disneyland of dairy stores.” Rule #1—the customer is always right. Rule #2—if the customer is ever wrong, reread Rule #1.
37 Chapter 1Customer EquityCustomer equity is the total combined customer lifetime values of all the company’s customers.
38 Customer Relationship Groups Chapter 1Customer Relationship GroupsButterfliesTrue FriendsGood fit between company’s offerings and customer’s needs; high profit potentialGood fit between company’s offerings and customer’s needs; highest profit potentialHighProfitabilityStrangersBarnaclesLittle fit between company’s offerings and customer’s needs; lowest profit potentialLimited fit between company’s offerings and customer’s needs; low profit potentialLowShort-term customersLong-term customersProjected loyalty
39 Chapter 1The InternetThe Internet has been hailed as the technology behind a New Economy.Marketing applications include:“Click-and-mortar” companies“Click-only” companiesBusiness-to-business e-commerceBusiness-to-business transactions online are expected to reach $4.3 trillion in 2005.By 2005, 500,000 companies will use the Internet to do business.
40 Chapter 1The New Digital AgeThe recent technology boom has had a major impact on the ways marketers connect with and bring value to their customers.
41 New Marketing Landscape Chapter 1New Marketing LandscapeRapid GlobalizationNot-for-ProfitMarketingEthics & SocialResponsibilityNew World of MarketingRelationships
42 Rest Stop: Reviewing the Concepts Chapter 1Rest Stop: Reviewing the ConceptsDefine marketing and outline the steps in the marketing process.Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts.Identify the key elements of a customer-driven marketing strategy and discuss marketing management orientations that guide marketing strategy.Discuss customer relationship management and strategies for building lasting customer relationships.Describe the major trends and forces that are changing the marketing landscape in this new age of relationships.
43 Q: Your marketing campaigns appeal to your customers' desire to be perceived as owning the best in bicycle technology. Your marketing campaigns successfully appeal to consumers':1. needs.2. wants.3. satisfactions.4. demands.AK, 7e – Chapter 1
44 Q: Your company is also successful because you offer free maintenance and repair for the first two years after the purchase of a bicycle. Therefore, along with the physical product, you offer an attractive package of:1. values.2. ideas.3. events.4. services.AK, 7e – Chapter 1
45 Q: As a campaign manager for a candidate to your county's legislature, you are defining the candidate’s positioning among voters and are working on a pre-election rally during which your candidate and several prominent supporters will deliver speeches. You are planning a:1. product.2. service.3. satisfaction.4. promotional campaignAK, 7e – Chapter 1
46 Q: Your firm has perfected a process that reduces the overall cost of producing custom-made bikes. As a result, you adopt the ________ concept of marketing, whereby you offer your products to consumers at prices well below those of your competitors.1. production2. product3. marketing4. societal marketingAK, 7e – Chapter 1
47 Q: You favor a marketing approach that emphasizes the quality and new features of your bicycles, yet your assistant prefers an approach that emphasizes innovative promotion strategies. Which of the two following marketing concepts are exhibited here?1. Marketing and selling2. Production and societal marketing3. Product and marketing4. Product and sellingAK, 7e – Chapter 1
48 Q: To reduce the large capacity of bikes in your warehouse, you adopt the _________ concept and attempt to push your products into the market through heavy advertising.1. production2. product3. selling4. marketingAK, 7e – Chapter 1
49 Q: In anticipation of high demand, you build a factory in Mexico, where you can save on labor and production costs. However, you still provide benefits to the Mexican workers comparable to those many American workers receive, illustrating that you have successfully practiced the:1. marketing concept.2. product concept.3. societal marketing concept.4. selling concept.AK, 7e – Chapter 1
50 Q: Are you more inclined to buy from a company that is socially responsible? 1. Yes2. NoAK, 7e – Chapter 1
51 Q: Would you be willing to pay more for a product because it was from a socially-responsible company?YesNoAK, 7e – Chapter 1
52 Q: The most important new technology for connecting is: 1. the Internet.2. the database.3. the laptop computer.4. the fiber optic telephone.AK, 7e – Chapter 1