chapter-12 building customer relationships through effective marketing
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Chapter-12 Building Customer Relationships Through Effective Marketing. Dr. Gehan Shanmuganathan , (DBA). Apple rings up $ 43 billion in annual revenue, selling 10 million Macintosh computers, 8 million iPods, and 20 million iPhones every year. Learning Objectives. Learning Objectives. - PowerPoint PPT PresentationTRANSCRIPT
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CHAPTER-12
BUILDING CUSTOMER RELATIONSHIPS THROUGH EFFECTIVE MARKETING
Dr. Gehan Shanmuganathan, (DBA)
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APPLE RINGS UP $ 43 BILLION IN ANNUAL REVENUE, SELLING 10 MILLION MACINTOSH COMPUTERS, 8 MILLION IPODS, AND 20 MILLION IPHONES EVERY YEAR
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LEARNING OBJECTIVES
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LEARNING OBJECTIVES1. Understand the meaning of marketing and the
importance of management of customer relationships.
2. Explain how marketing adds value by creating several forms of utility.
3. Trace the development of the marketing concept and understand how it is implemented.
4. Understand what markets are and how they are classified.
5. Identify the four elements of the marketing mix and be aware of their importance in developing a marketing strategy.
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LEARNING OBJECTIVES (CONT’D)6. Explain how the marketing environment affects
strategic market planning.7. Understand the major components of a marketing
plan.8. Describe how market measurement and sales
forecasting are used.9. Distinguish between a marketing information system
and marketing research.10. Identify the major steps in the consumer buying
decision process and the sets of factors that may influence this process.
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WHAT IS MARKETING?
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The activity, set of institutions and processes for
creating, communicating, delivering, and
exchanging offerings that have value for
customers, clients, partners, and society at large
MARKETING
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MANAGING CUSTOMER RELATIONSHIPS
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MANAGING CUSTOMER RELATIONSHIPS Relationship marketing- establishing long-term,
mutually satisfying buyer-seller relationships
Customer relationship management (CRM)- using information about customers to create
marketing strategies that develop and sustain
desirable customer relationship
Customer lifetime value- measure of a
customer’s worth (sales minus costs) to business
over one’s life time
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UTILITY: THE VALUE ADDED BY MARKETING
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Utility- the ability of a good or service to satisfy a
human need
Form utility- utility created by converting production
inputs into finished products
Place utility- utility created by making product available
at a location convenient for customer to purchase
Time utility- utility created by making a product
available when customers wish to purchase it
Possession utility- utility created by transferring title
(ownership) of a product to a buyer
UTILITY: THE VALUE ADDED BY MARKETING
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THE MARKETING CONCEPT
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THE MARKETING CONCEPT A business philosophy that firm should provide goods
and services that satisfy customer’s needs through a coordinated set of activities that allow the firm to achieve its objectives
To achieve success, a business must Talk to its potential customers to assess their
needs Develop a good or service to satisfy those needs Continue to seek ways to provide customer
satisfaction
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EVOLUTION OF MARKETING CONCEPT AFTER INDUSTRIAL REVOLUTION
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PRODUCTION CONCEPT“ The production concept holds that consumers
will favour those products that are widely available and low in cost. Managers of production oriented organisations concentrate on achieving high production efficiency and wide distribution coverage”.
Companies that follow this concept is called production oriented
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PRODUCT CONCEPT
“The product concept contends that consumers will favour those products that offer the most quality, performance or innovative features. Managers in these product oriented organisations focus their energy on making superior products and improving them over time.”
A company following this concept is called “Myopic”
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SELLING CONCEPT “The selling concept holds that consumers, if left
alone, will ordinarily not buy enough of the organisations products. The organisation must therefore undertake an aggressive selling and promotional effort.”
A company following this concept is called sales oriented
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MARKETING CONCEPT
The marketing concept rests on four pillars Target market – This is where the marketing effort is directed
towards a chosen market sector.
Customer needs - The marketing activities start with the customers needs in mind.
Coordinated marketing – This is where a coordinated effort is put in meeting the requirements of the customers across various functions of the organisation.
Profitability – The ultimate outcome would be profits for a business organisation or an excess in terms of effort for non profit
organisations.
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SOCIETAL MARKETING CONCEPT
Societal Marketing is a management process responsible for identifying, anticipating and satisfying customer requirements at a profit in a socially acceptable manner.
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IMPLEMENTING THE MARKETING CONCEPT
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IMPLEMENTING THE MARKETING CONCEPT
Obtain information about present and potential customers Their needs; how well those needs are being satisfied;
how products might be improved; customer opinions about the firm
Pinpoint specific needs and potential customers toward which to direct marketing activities and resources
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IMPLEMENTING THE MARKETING CONCEPT (CONT’D)
Mobilize marketing resources to Provide a product that will satisfy customers Price the product at an acceptable and profitable
level Promote the product to potential customers Ensure distribution for product availability when
and where wanted Obtain information on the effectiveness of the
marketing effort and modify efforts as necessary
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MARKETS AND THEIR CLASSIFICATION
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MARKETS AND THEIR CLASSIFICATION
Market- group of individuals or organizations,
or both, that need products in a given
category and that have the ability,
willingness, and authority to purchase such
products
Consumer markets (B to C) Business-to-business (industrial- B to B)
markets
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DEVELOPING MARKETING STRATEGIES
Marketing strategyConsists of
The selection and analysis of a target marketThe creation and maintenance of an appropriate marketing mix (a combination of product, price, distribution, and promotion developed to satisfy a particular target market)
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DEVELOPING MARKETING STRATEGIES (CONT’D)
Target market selection and evaluationTarget market- a group of individuals or
organizations for which the firm develops and maintains a marketing mix suitable for the specific needs and preferences of that group
Market segment- a group of individuals or organizations within a market that share one more common characteristics
Market segmentation- the process of dividing a market into segments
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One Marketing Mix Seg 1Seg 2Seg 3
Marketing Mix 1 Seg 1Seg 2Seg 3 Marketing Mix 2
Marketing Mix 3
One Marketing Mix Seg 1
Undifferentiating
Differentiating
Concentrated
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MARKETING ENVIRONMENT
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DEFINITION OF MARKETING ENVIRONMENT
A company’s marketing environment consists of the actors and forces external to the marketing management function of the firm that impinge on the marketing
management’s ability to develop and maintain successful transaction with its target customers.
- Kotler : 2001:42 -
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Marketing Environment
Internal Environment
External Environment
Micro Environment
Macro Environment
Customers, Distributors, Suppliers & Competitors
PESTEEL Factors
5 M’s 7 S’s
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DEVELOPING A MARKETING PLAN
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DEVELOPING A MARKETING PLAN A written document that specifies an organization’s resources,
objectives, strategy, and implementation and control efforts to be used in marketing a specific product or product group
Elements of a marketing plan Executive summary Environmental analysis Strengths and weaknesses Opportunities and threats Marketing objectives Marketing strategies Marketing implementation Evaluation and control
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MARKET MEASUREMENT AND SALES FORECASTING
Sales forecast- an estimate of the amount of
a product that an organization expects to sell
during a certain period of time based on a
specific level of marketing effort
Importance of measuring sales potential
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MARKETING INFORMATION Marketing information system- a system for
managing marketing information that is gathered
continually from internal and external sources
Internal data sources
External data sources
Outputs
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MARKETING INFORMATION (CONT’D)
The six steps of marketing research1. Define the problem2. Make a preliminary investigation3. Plan the research4. Gather factual information5. Interpret the information6. Reach a conclusion
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BUYING BEHAVIOR
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TYPES OF BUYING BEHAVIOR Buying behavior- the decisions and actions of
people involved in buying and using products
Consumer buying behavior- the purchasing of
products for personal or household use, not
for business purposes
Business buying behavior- the purchasing of
products by producers, resellers,
governmental units, and institutions
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BUYING PROCESS Need Recognition
Identification of Alternatives
Evaluation of Alternatives
Purchase Decision
Post Purchase Evaluation
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WRITE FIVE KEY THINGS (AREAS) THAT YOU CAN CRITICALLY REMEMBER IN TODAY’S DISCUSSION
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WHAT WE DISCUSSED TODAY..
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WHAT WE DISCUSSED TODAY..1. Understand the meaning of marketing and the
importance of management of customer relationships.
2. Explain how marketing adds value by creating several forms of utility.
3. Trace the development of the marketing concept and understand how it is implemented.
4. Understand what markets are and how they are classified.
5. Identify the four elements of the marketing mix and be aware of their importance in developing a marketing strategy.
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WHAT WE DISCUSSED TODAY.. (CONT’D)6. Explain how the marketing environment affects
strategic market planning.7. Understand the major components of a marketing
plan.8. Describe how market measurement and sales
forecasting are used.9. Distinguish between a marketing information system
and marketing research.10. Identify the major steps in the consumer buying
decision process and the sets of factors that may influence this process.