Presentation on theme: "Chapter One Marketing: Managing Profitable Customer Relationships."— Presentation transcript:
Chapter One Marketing: Managing Profitable Customer Relationships
Roadmap: Previewing the Concepts Prentice Hall, Inc. Copyright 20071-2 1.Define marketing and the marketing process. 2.Explain the importance of understanding customers and identify the five core marketplace concepts. 3.Identify the elements of a customer-driven marketing strategy and discuss the marketing management orientations. 4.Discuss customer relationship management and creating value for and capturing value from customers. 5.Describe the major trends and forces changing the marketing landscape.
Prentice Hall, Inc. Copyright 20071-3 Creating Value NASCAR sells the experience – in-car cameras, wholesome family orientation. NASCAR.com engages fans via content. Success has been achieved by creating lasting customer relationships. NASCAR – What is its secret? Case Study Capturing Value NASCAR is the 2nd highest rated sport on TV. Fans are young, affluent, and family oriented, spending nearly $700 annually on NASCAR merchandise. Fans are loyal to sport and NASCAR fans are 3 times as likely to seek out sponsors’ products than are nonfans.
Prentice Hall, Inc. Copyright 20071-4 What Is Marketing? Simple Definition: Marketing is managing profitable customer relationships. Goals: 1.Attract new customers by promising superior value. 2.Keep and grow current customers by delivering satisfaction.
Prentice Hall, Inc. Copyright 20071-5 Marketing Defined 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. OLD View of Marketing: Making a Sale – “Telling & Selling” New View of Marketing: Satisfying customer needs NEW View of Marketing: Satisfying Customer Needs
Prentice Hall, Inc. Copyright 20071-6 The Marketing Process A simple model of the marketing process: –Understand the marketplace and customer needs and wants. –Design a customer-driven marketing strategy. –Construct a marketing program that delivers superior value. –Build profitable relationships and create customer delight. –Capture value from customers to create profits and customer quality.
Prentice Hall, Inc. Copyright 20071-7 Needs, Wants, & Demands Need: State of felt deprivation including physical, social, and individual needs. –Physical needs: Food, clothing, shelter, safety –Social needs: Belonging, affection –Individual needs: Learning, knowledge, self-expression
Prentice Hall, Inc. Copyright 20071-8 Needs, Wants, & Demands Wants: Form that a human need takes, as shaped by culture and individual personality. Wants + Buying Power = Demand
Prentice Hall, Inc. Copyright 20071-9 Need / Want Fulfillment Needs and wants are fulfilled through a Marketing Offer: –Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.
Prentice Hall, Inc. Copyright 20071-10 Need / Want Satisfiers Products: –Persons –Places –Organizations –Information –Ideas Services –Activity or benefit offered for sale that is essentially intangible and does not result in ownership. Brand Experiences: “... dazzle their senses, touch their hearts, stimulate their minds.”
Prentice Hall, Inc. Copyright 20071-11 Marketing Myopia Marketing myopia occurs when sellers 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.”
Prentice Hall, Inc. Copyright 20071-12 Value & Satisfaction Care must be taken when setting expectations: –If performance is lower than expectations, satisfaction is low. –If performance is higher than expectations, satisfaction is high.
Prentice Hall, Inc. Copyright 20071-13 Exchange vs. Transaction Exchange: –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, or check.
Prentice Hall, Inc. Copyright 20071-14 What 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.
Prentice Hall, Inc. Copyright 20071-15 Modern Marketing Systems Main elements in a modern marketing system include: –Suppliers –Company (marketer) –Competitors –Marketing intermediaries –Final users
Prentice Hall, Inc. Copyright 20071-16 Marketing Management The art and science of choosing target markets and building profitable relationships with them. –Requires that consumers and the marketplace be fully understood
Prentice Hall, Inc. Copyright 20071-17 Marketing Management Designing a winning marketing strategy requires answers to the following questions: 1. What customers will we serve? What is our target market? 2. How can we best serve these customers? What is our value proposition?
Prentice Hall, Inc. Copyright 20071-18 Segmentation & Target Marketing Market Segmentation: –Divide the market into segments of customers Target Marketing: –Select the segment to cultivate
Prentice Hall, Inc. Copyright 20071-19 Marketing Management Demand Management –Finding and increasing demand, also changing or reducing demand, as in demarketing. Demarketing –Temporarily or permanently reducing the number of customers or shifting their demand.
Prentice Hall, Inc. Copyright 20071-20 Value Proposition The set of benefits or values a company promises to deliver to consumers to satisfy their needs. –Value propositions dictate how firms will differentiate and position their brands in the marketplace.
Prentice Hall, Inc. Copyright 20071-22 The Marketing Plan Transforms the marketing strategy into action Includes the marketing mix and 4 P’s of marketing: –Product –Price –Place (Distribution) –Promotion
Prentice Hall, Inc. Copyright 20071-23 Customer Relationship Management The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. –Acquiring customers –Keeping customers –Growing customers
Prentice Hall, Inc. Copyright 20071-24 Customer Perceived Value Customer’s evaluation of the difference between all of the benefits and all of the costs of a marketing offer relative to those of competing offers.
Prentice Hall, Inc. Copyright 20071-25 Customer Satisfaction Dependent on the product’s perceived performance relative to a buyer’s expectations. –Customer satisfaction often leads to consumer loyalty. –Some firms seek to DELIGHT customers by exceeding expectations.
Prentice Hall, Inc. Copyright 20071-26 Customer Relationships Loyalty and retention programs build relationships and may feature: –Financial Benefits EX: Frequency marketing programs –Social Benefits EX: Club marketing programs –Structural Ties Focus is on relating directly to profitable customers, for the longterm.
Prentice Hall, Inc. Copyright 20071-27 Partner Relationship Marketing Marketing partners help create customer value and assist in building customer relationships. Partners inside the firm: –All employees customer focused –Teams coordinate efforts toward customers Partners outside the firm: –Supply chain management –Strategic alliances
Prentice Hall, Inc. Copyright 20071-28 Customer Loyalty & Retention Customer Lifetime Value –The entire stream of purchases that the customer would make over a lifetime of patronage. Share of Customer –The share a company gets of the customers purchasing in their product categories.
Prentice Hall, Inc. Copyright 20071-29 Customer Equity The combined discounted customer lifetime values of all the company’s current and potential customers. –Classify customers by loyalty and potential profitability –Manage accordingly
Prentice Hall, Inc. Copyright 20071-30 The New Digital Age Technology impacts the ways firms bring value to their customers. Greater connectivity means greater access to information, faster travel and communication. The Internet allows anytime, anywhere connections between firms and customers. –“Click-and-mortar” companies –“Click-only” companies –Business-to-business e-commerce
Prentice Hall, Inc. Copyright 20071-31 New Marketing Landscape Rapid Globalization Ethics and Social Responsibility Not-for-Profit Marketing New World of Marketing Relationships
Rest Stop: Reviewing the Concepts Prentice Hall, Inc. Copyright 20071-32 1.Define marketing and the marketing process. 2.Explain the importance of understanding customers and identify the five core marketplace concepts. 3.Identify the elements of a customer-driven marketing strategy and discuss the marketing management orientations. 4.Discuss customer relationship management and creating value for and capturing value from customers. 5.Describe the major trends and forces changing the marketing landscape.