kotler 01

Marketing: Managing Marketing: Managing Profitable Customer Profitable Customer

RelationshipsRelationships

Chapter 1Chapter 1

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Objectives

Be able to define marketing and Be able to define marketing and discuss its core concepts.discuss its core concepts.

Be able to define marketing Be able to define marketing management and compare the management and compare the five marketing management five marketing management orientations.orientations.

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Objectives

Understand customer Understand customer relationship management relationship management and strategies.and strategies.

Realize the major challenges Realize the major challenges facing marketers in the new facing marketers in the new “connected” millennium.“connected” millennium.

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What is Marketing?

Marketing is managing profitable Marketing is managing profitable customer relationshipscustomer relationships Attracting new customersAttracting new customers Retaining and growing current Retaining and growing current

customerscustomers

““Marketing” is NOT synonymous with Marketing” is NOT synonymous with “sales” or “advertising”“sales” or “advertising”

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What is Marketing?

Kotler’s social definition:Kotler’s social definition: ““Marketing is a social and managerial Marketing is a social and managerial

process by which individuals and process by which individuals and groups obtain what they need and groups obtain what they need and want through creating and want through creating and exchanging products and value with exchanging products and value with others.”others.”

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What Can Be

Marketed?

GoodsGoodsServicesServicesPlacesPlacesIdeasIdeasEventsEventsPersonsPersonsPropertiesPropertiesOrganizationsOrganizationsInformationInformationExperiencesExperiencesWhat is being

marketed in this ad?

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Figure 1-1:

Core Marketing Concepts

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Figure 1-2:

Elements of a Modern Marketing System

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Marketing Management

Marketing managementMarketing management is “the art is “the art and science of choosing target and science of choosing target markets and building profitable markets and building profitable relationships with them.”relationships with them.” Creating, delivering and Creating, delivering and

communicating superior communicating superior customcustomeer value is key.r value is key.

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Marketing Management

Customer Management:Customer Management: Marketers select customers that Marketers select customers that

can be served well and profitably.can be served well and profitably.

Demand Management:Demand Management: Marketers must deal with different Marketers must deal with different

demand states, ranging from no demand states, ranging from no demand to too much demand.demand to too much demand.

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Marketing Management

Demarketing: Commuter Connections promotes the use of mass transit and carpooling as an alternative to driving alone.

CommuterConnections

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Marketing Management

Production Concept

Product Concept

Selling Concept

Marketing Concept

Societal Marketing Concept

Management Orientations

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Figure 1-3: The Selling and Marketing

Concepts Contrasted

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Figure 1-4: Considerations Underlying the

Societal Marketing Concept

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Figure 1-5: Relationship Between

Customer Satisfaction and Loyalty

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CRM

Customer relationship Customer relationship management (also called CRM) management (also called CRM) is defined as:is defined as:

““the overall process of building the overall process of building and maintaining profitable and maintaining profitable customer relationships by customer relationships by delivering superior customer delivering superior customer value and satisfaction.”value and satisfaction.”

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CRM

It costs 5 to 10 times MORE to It costs 5 to 10 times MORE to attract a new customer than it does attract a new customer than it does to keep a current customer satisfied.to keep a current customer satisfied.Marketers must be Marketers must be concerned with the concerned with the lifetime value of the lifetime value of the customercustomer..

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SatMetrix Video Clip

View what the experts have to say about customer loyalty and the bottom line.

BusinessNow

Click the picture above to play video

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CRM

Attracting, Attracting, retaining and retaining and growing growing customerscustomers

Building Building relationships and relationships and customer equitycustomer equity

Customer value and satisfactionCustomer value and satisfaction Perceptions are keyPerceptions are key Created by meeting/ exceeding Created by meeting/ exceeding

expectationsexpectations

Loyalty and retentionLoyalty and retention Many benefits of loyalty Many benefits of loyalty Increases as satisfaction levels Increases as satisfaction levels

increaseincrease Delighting consumers should be Delighting consumers should be

the goalthe goal

Growing customer shareGrowing customer share Cross-sellingCross-selling

Key ConceptsKey Concepts

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CRM

Customer equityCustomer equity Total combined Total combined

customer lifetime customer lifetime values of all customersvalues of all customers

Measures firm’s Measures firm’s performance, but in a performance, but in a manner that looks to manner that looks to the futurethe future

Attracting, Attracting, retaining and retaining and growing growing customerscustomers

Building Building relationships and relationships and customer equitycustomer equity

Key ConceptsKey Concepts

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CRM

Customer relationship Customer relationship levels and toolslevels and tools Target market typically Target market typically

dictates type of relationshipdictates type of relationship Basic relationshipsBasic relationships Full relationshipsFull relationships

Customer loyalty and Customer loyalty and retention programsretention programs

Adding financial benefitsAdding financial benefits Adding social benefitsAdding social benefits Adding structural tiesAdding structural ties

Attracting, Attracting, retaining and retaining and growing growing customerscustomers

Building Building relationships and relationships and customer equitycustomer equity

Key ConceptsKey Concepts

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Marketing Challenges

Technological advances, rapid Technological advances, rapid globalization, and continuing globalization, and continuing social and economic shifts are social and economic shifts are causing marketplace changes.causing marketplace changes.

Major marketing developments Major marketing developments can be grouped under the theme can be grouped under the theme of of ConnectingConnecting..

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Figure 1-6: Today’s Marketing

Connections

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Marketing Challenges

Via technologyVia technology

With customersWith customers

With marketing With marketing partnerspartners

With the worldWith the world

Advances in computers, Advances in computers, telecommunications, video-telecommunications, video-conferencing, etc. are major conferencing, etc. are major forcesforces Databases allow for Databases allow for

customization of products, customization of products, messages and analysis of messages and analysis of needsneeds

The InternetThe Internet Facilitates anytime, anywhere Facilitates anytime, anywhere

connectionsconnections Facilitates CRMFacilitates CRM Creates marketspacesCreates marketspaces

ConnectingConnecting

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Marketing Challenges

Selective relationship Selective relationship management is keymanagement is key Customer profitability Customer profitability

analysis separates analysis separates winners from loserswinners from losers

Growing “share of Growing “share of customer” customer” Cross-selling and up-Cross-selling and up-

selling are helpfulselling are helpful

Direct sales to buyers Direct sales to buyers are growingare growing

Via technologyVia technology

With customersWith customers

With marketing With marketing partnerspartners

With the worldWith the world

ConnectingConnecting

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Marketing Challenges

Partner relationship Partner relationship management involves:management involves: Connecting inside the Connecting inside the

companycompany Connecting with Connecting with

outside partnersoutside partnersSupply chain Supply chain

managementmanagementStrategic alliancesStrategic alliances

Via technologyVia technology

With customersWith customers

With marketing With marketing partnerspartners

With the worldWith the world

ConnectingConnecting

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Marketing Challenges

GlobalizationGlobalization CompetitionCompetition New opportunitiesNew opportunities

Greater concern for Greater concern for environmental and social environmental and social responsibilityresponsibilityIncreased marketing by Increased marketing by nonprofit and public-nonprofit and public-sector entitiessector entities Social marketing campaignsSocial marketing campaigns

Via technologyVia technology

With customersWith customers

With marketing With marketing partnerspartners

With the worldWith the world

ConnectingConnecting