1 marketing: managing profitable customer relationships chapter 1
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1
Marketing: Managing
Profitable Customer Relationships
Chapter 1
Learning Goals1. 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
What is Marketing? Marketing Defined:
“The process by which companies create value for the customers and build strong customer relationships in order to capture value from customers in return”
Marketing is about managing profitable customer relationships
The twofold goal of marketing is- Attracting new customers Retaining and growing current customers
Goal 1: Define marketing and the marketing process.
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 relationshi
ps and create
customer delight
Capture value from
customers to
create profits
and customer quality
Create value for customers and build customer relationships
Capture value from customers in return
Goal 1: Define marketing and the marketing process.
Needs, wants, and demands Need
State of felt deprivation Example: Need food
Wants The form needs as shaped by culture and the
individual Example: Want a Big Mac
Demands Wants which are backed by buying power
Understanding the Marketplace and customer needs
Understanding the Marketplace and customer needs Marketing offers:
Products Services Events Experiences Persons Places Ideas Organizations Information
Understanding the Marketplace and customer needs Value and satisfaction Value
Customer-perceived value Customer’s evaluation of the difference between all the
benefits and all the cost of a market offering relative to those of competing products.
Customers form expectations regarding value Marketers must deliver value to consumers
Satisfaction Customer satisfaction
The extent to which a product’s perceived performance matches a buyer’s expectations
A satisfied customer will buy again and tell others about their good experience
Understanding the Marketplace and customer needs Exchange, transactions and relationships Exchange
The act of obtaining a desired object from someone by offering something in return
One exchange is not the goal, relationships with several exchanges are the goal
Relationships are built through delivering value and satisfaction
Markets Market
Set of actual and potential buyers of a product Marketers seek buyers that are profitable
Marketing Management Marketing management is the art and
science of choosing target markets and building profitable relationships with them.
This definition must include answers to two questions:
What customers will we serve? How can we serve these customers best?
Goal 3: Identify elements of a customer-driven strategy.
Marketing Management Selecting customers to serve
Dividing the market into segments of customers- Market segmentation
Selecting which segments it will go after- Target marketing Demarketing
Value proposition Set of benefits or values it promises to deliver
to customers to satisfy their needs.
Value Proposition
iPhone
Nokia
Nokia
Marketing Management Orientations
Production concept Product concept
Selling concept Marketing concept
□ Societal marketing concept
Goal 3: Identify elements of a customer-driven strategy.
The Production Concept Assumes that consumers are interested
primarily in product availability at low prices
Marketing objectives: Cheap, efficient production Intensive distribution Market expansion
The Product Concept Assumes that consumers will buy the
product that offers them the highest quality, the best performance, and the most features
Marketing objectives: Quality improvement Addition of features
Marketing Myopia
A focus on the existing product only rather than the consumer needs it presumes to satisfy
Management’s failure to recognize the scope of the business
Product-oriented rather than customer-oriented management endangers future growth
Avoiding Marketing Myopia by focusing on benefitsCompany Myopic
DescriptionMarketing oriented description
Cingular “We are a telephone company”
“We are a communications company”
JetBlue Airways “We are in the airline business”
“We are in the transportation business”
Sony “We are in the video game business”
We are in the entertainment Business
The Selling Concept Assumes that consumers are unlikely to
buy a product unless they are aggressively persuaded to do so
Marketing objectives: Sell, sell, sell
Lack of concern for customer needs and satisfaction
The Marketing Concept Assumes that to be successful, a company
must determine the needs and wants of specific target markets and deliver the desired satisfactions better than the competition
Marketing objectives: Profits through customer satisfaction
Societal Marketing Concept
Societal Marketing
ConceptCompany(Profits)
Consumers(Want
Satisfaction)
Society(Human Welfare)
• Assumes that marketing strategy should deliver value to customers in a way that maintain and improves both the consumer’s and society’s well-being
The Marketing Plan Transforms the marketing strategy into
action Includes the marketing mix -The 4P’s of
marketing Product Price Place Promotion
Goal 3: Identify elements of a customer-driven strategy.
Marketing mixes- 4P’s Product
Firm must first create a need satisfying market offering
Price Decide how much it will charge for the offer
Place Decide how it will make the offer available to
target consumers Promotion
Communicate with target customers about the offer and persuade them of its merit
Goal 3: Identify elements of a customer-driven strategy.
Building Customer Relationships
CRM–Customer relationship management
The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, keeping and growing customers.
Goal 4: Discuss CRM