120intro

Marketing:Marketing:

Managing Profitable Managing Profitable Customer RelationshipsCustomer Relationships

1

Professor TakadaProfessor Takada 1-2

ROAD MAP: Previewing the Concepts

• What is marketing?What is marketing?• Key steps in the marketing process.Key steps in the marketing process.• Consumers’ needs and wants.Consumers’ needs and wants.• Five core marketplace concepts.Five core marketplace concepts.• Key elements of a customer-driven marketing Key elements of a customer-driven marketing

strategy.strategy.• Marketing management orientations that guide Marketing management orientations that guide

marketing strategy.marketing strategy.• Customer relationship management and Customer relationship management and

strategies.strategies.• Major trends and forces that are changing the Major trends and forces that are changing the

marketing landscape in this new age of marketing landscape in this new age of relationships.relationships.


What is Marketing?

Marketing is an organizational function and a set of processes for creating,

communicating, and delivering value to customers and for managing

customer relationships in ways that benefit the

organization and its stakeholders.


What is Marketing Management?

Marketing management is theart and science

of choosing target markets and getting, keeping, and growing

customers throughcreating, delivering, and communicating

superior customer value.


Selling is only the tip of the iceberg

“There will always be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be

needed is to make the product or service available.”

Peter Drucker


Designing the “Right” Product


Only the best is good enough for Lexus customers


Key Customer MarketsConsumer Markets

Business Markets

Global Markets

Nonprofit/ Government Markets


ROAD MAP:

• What is marketing?What is marketing?• Key steps in the marketing process.Key steps in the marketing process.• Consumers’ needs, wants, and demands.Consumers’ needs, wants, and demands.• Five core marketplace concepts.Five core marketplace concepts.• Key elements of a customer-driven marketing Key elements of a customer-driven marketing






A Simple Model of the Marketing Process

Understand the marketplace

and customer needs and

wants

Understand the marketplace

and customer needs and

wants

Capture value from customers to create profits and customer equity

Capture value from customers to create profits and customer equity

Create value for customers and build customer

relationships

Capture value from customers

in return

Design a customer-driven

marketingstrategy

Design a customer-driven

marketingstrategy

Build profitable relationships and

createcustomer delight

Build profitable relationships and

createcustomer delight

Construct a marketing program

that delivers superior value

Construct a marketing program

that delivers superior value


ROAD MAP: Previewing the Concepts

• What is marketing?What is marketing?• Key steps in the marketing process.Key steps in the marketing process.• Consumers’ needs, wants, and demands.Consumers’ needs, wants, and demands.• Five core marketplace concepts.Five core marketplace concepts.• Key elements of a customer-driven marketing Key elements of a customer-driven marketing






NeedsNeeds - state of felt deprivation including - state of felt deprivation including physical, social, and individual needs.physical, social, and individual needs.

Types of Needs• Physical:Physical:

– Food, clothing, shelter, safetyFood, clothing, shelter, safety

• Social:Social:– Belonging, affectionBelonging, affection

• Individual:Individual:– Learning, knowledge, self-expressionLearning, knowledge, self-expression

WantsWants - form that a human need - form that a human need takes, as shaped by culture and takes, as shaped by culture and individual personality.individual personality.


I want it, I need it…

5 5 Types of NeedsTypes of Needs

• Stated needsStated needs

• Real needsReal needs

• Unstated needsUnstated needs

• Delight needsDelight needs

• Secret needsSecret needs


What is Marketed?GoodsGoods

ServicesServices

Events & ExperiencesEvents & Experiences

PersonsPersons

Places & PropertiesPlaces & Properties

OrganizationsOrganizations

InformationInformation

IdeasIdeas


Marketing Goods


Marketing Ideas: Friends Don’t Let Friends Drive Drunk

This is the watch Stephen Hollingshead, Jr. was wearing when he encountered a drunk driver. Time of death 6:55 p.m.


ProductsAnything that can be Offered to a Market to Satisfy a Need or Want

ProductsAnything that can be Offered to a Market to Satisfy a Need or Want

PersonsPersons PlacesPlaces OrganizationsOrganizations

IdeasIdeasInformationInformation

What Satisfies Consumers’ Needs and Wants?

ServicesActivity or Benefit Offered for Sale That is Essentially

Intangible and Does Not Result in the Ownership of Anything

ServicesActivity or Benefit Offered for Sale That is Essentially

Intangible and Does Not Result in the Ownership of Anything


Product as an Idea

Products do not have to be physical objects. Here the “product” is an idea—protecting animals.


Marketing Myopia

• Sellers pay more Sellers pay more attention to the attention to the specific products they specific products they offer than to the offer than to the benefits and benefits and experiences produced experiences produced by the products.by the products.

• They focus on the They focus on the “wants” and lose sight “wants” and lose sight of the “needs.”of the “needs.”


Value and Satisfaction

Expectation

Performance810

If performance is lower than expectations, satisfaction is low.

If performance is higher than expectations, satisfaction is high.

Expectation

Performance

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A Simple Marketing System


Elements of a Modern Marketing System


Structure of Flows in a Modern Exchange Economy


Marketing Management

• The art and science of choosing target The art and science of choosing target markets and building profitable markets and building profitable relationships with them.relationships with them.

Questions to ask:Questions to ask:

1.1. What customers will we serve?What customers will we serve?What is our target market?What is our target market?

2.2. How can we best serve these How can we best serve these customers?customers?

What is our value proposition?What is our value proposition?


Segmentation and Target Marketing

Market Segmentation:

Divide the market into segments of customers

Target Marketing:

Select the segment to cultivate

#1 #2


Marketing Management

Finding and increasing Finding and increasing demand, also changing or demand, also changing or reducing demand, such as reducing demand, such as in demarketing.in demarketing.

DemandDemandManagementManagement

Temporarily or Temporarily or permanently reducing the permanently reducing the number of customers or number of customers or shifting their demand.shifting their demand.

DemarketingDemarketing


ROAD MAP:







Marketing Management Philosophies

Production ConceptProduction Concept

Product ConceptProduct Concept

Selling ConceptSelling Concept

Marketing ConceptMarketing Concept

Societal Marketing ConceptSocietal Marketing Concept


Marketing and Sales Concepts Contrasted


Societal Marketing Concept


Corporate Social Initiatives


Holistic Marketing Dimensions


ROAD MAP:







The Marketing Mix

CustomerCustomerNeedsNeeds

ProductProduct PricePrice

PromotionPromotion DistributionDistribution


Marketing-Mix Strategy


Marketing Mix and the Customer

Four P’sFour P’s

• ProductProduct

• PricePrice

• PlacePlace

• PromotionPromotion

Four C’sFour C’s

• Customer Customer solutionsolution

• Customer costCustomer cost

• ConvenienceConvenience

• CommunicationCommunication


Factors Influencing Marketing Strategy


Marketing Management Tasks

• Developing Developing marketing marketing strategiesstrategies

• Capturing marketing Capturing marketing insightsinsights

• Connecting with Connecting with customerscustomers

• Building strong Building strong brandsbrands

• Shaping market Shaping market offeringsofferings

• Delivering valueDelivering value

• Communicating Communicating valuevalue

• Creating long-Creating long-term growthterm growth


ROAD MAP:







Customer Relationship Management

• The process of building and The process of building and maintaining profitable customer maintaining profitable customer relationships by delivering superior relationships by delivering superior customer value and satisfaction.customer value and satisfaction.

Customer Perceived Value

• Customer’s evaluation of the difference Customer’s evaluation of the difference between all the benefits and all the between all the benefits and all the costs of a marketing offer relative to costs of a marketing offer relative to those of competing offers.those of competing offers.


Customer Relationship Levels

Basic Relationship

Full Partnershi

p

Continuum


Loyalty and Retention

Financial Benefits

Social Benefits

Structural Ties


Partner Relationship Marketing

Partners Inside the Firm

1. All employees customer focused

2. Teams coordinate efforts toward customers

Partners Outside the Firm

1. Supply chain management

2. Strategic alliances


• Customer Lifetime ValueCustomer Lifetime Value– The entire stream of purchases that the The entire stream of purchases that the

customer would make over a lifetime of customer would make over a lifetime of patronage.patronage.• Share of CustomerShare of Customer

– The share a company gets of the customers The share a company gets of the customers purchasing in their product categories.purchasing in their product categories.

Customer Loyalty & Retention

Customer Equity

• Customer equity is the total Customer equity is the total combined customer lifetime values combined customer lifetime values of all the company’s customers.of all the company’s customers.


Customer Relationship Groups

Projected loyalty

High

Profitability

Low

Long-term customers

Short-term customers

Good fit between company’s offerings and customer’s needs; high

profit potential

Limited fit between company’s offerings and customer’s needs; low

profit potential

Little fit between company’s offerings and customer’s

needs; lowest profit potential

Good fit between company’s offerings and

customer’s needs; highest profit potential

Strangers

Butterflies True Friends

Barnacles


ROAD MAP:







The Internet

• The The InternetInternet has been hailed as the has been hailed as the technology behind a New Economy.technology behind a New Economy.

• Marketing applications include:Marketing applications include:– ““Click-and-mortar” companiesClick-and-mortar” companies– ““Click-only” companiesClick-only” companies– Business-to-business e-commerceBusiness-to-business e-commerce

• Business-to-business transactions Business-to-business transactions online are expected to reach $4.3 online are expected to reach $4.3 trillion in 2005.trillion in 2005.

• By 2005, 500,000 companies will use By 2005, 500,000 companies will use the Internet to do business.the Internet to do business.


New Marketing Landscape

Rapid Globalization

Ethics & SocialResponsibility

New World of MarketingRelationships

Not-for-ProfitMarketing


Global Markets

Coke is represented at the first China International Beverage Festival in Beijing in 2003


The marketplace isn’t what it used to be…

Changing technologyChanging technology

GlobalizationGlobalization

DeregulationDeregulation

PrivatizationPrivatization

EmpowermentEmpowerment

CustomizationCustomization

ConvergenceConvergence

DisintermediationDisintermediation


Core Concepts

• Needs, wants, and Needs, wants, and demandsdemands

• Target markets, Target markets, positioning, positioning, segmentationsegmentation

• Offerings and Offerings and brandsbrands

• Value and Value and satisfactionsatisfaction

• Marketing Marketing channelschannels

• Supply chainSupply chain

• CompetitionCompetition

• Marketing Marketing environmentenvironment

• Marketing Marketing planningplanning


Rest Stop: Reviewing the Concepts

1.1. Define marketing and outline the steps in the Define marketing and outline the steps in the marketing process.marketing process.

2.2. Explain the importance of understanding customers Explain the importance of understanding customers and the marketplace, and identify the five core and the marketplace, and identify the five core marketplace concepts.marketplace concepts.

3.3. Identify the key elements of a customer-driven Identify the key elements of a customer-driven marketing strategy and discuss marketing marketing strategy and discuss marketing management orientations that guide marketing management orientations that guide marketing strategy.strategy.

4.4. Discuss customer relationship management and Discuss customer relationship management and strategies for building lasting customer strategies for building lasting customer relationships.relationships.

5.5. Describe the major trends and forces that are Describe the major trends and forces that are changing the marketing landscape in this new age changing the marketing landscape in this new age of relationships.of relationships.

120intro

Business

marketing process

marketing landscape

aim of marketing

customer needs

professor takada

superior customer value

key elements

key steps