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armstrong01_basic - Marketing: Managing Profitable Customer...

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Unformatted text preview: Marketing: Managing Profitable Customer Relationships Chapter 1 Road Map: Previewing the Concepts • Define marketing and outline the steps in the marketing process. • Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts. 1-2 Road Map: Previewing the Concepts • Identify the key elements of a customer­driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. • Discuss customer relationship management and strategies for building lasting customer relationships. 1-3 Road Map: Previewing the Concepts • Describe the major trends and forces that are changing the marketing landscape in this new age of relationships. 1-4 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. • 1-5 Marketing Defined Definition of marketing (AMA, 2004) 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 Marketing is defined as the process of planning and executing the conception, pricing, promotion, and distribution of goods services, and ideas to create exchanges that satisfy individual and organizational objectives Definition of marketing (AMA, 1984) 1-6 Needs, Wants, & Demands • Need: State of felt deprivation including physical, social, and individual needs. • Physical: • Social: Food, clothing, shelter, safety Belonging, affection Learning, knowledge, self­expression 1-7 • Individual: Needs, Wants, & Demands • Wants: Form that a human need takes, as shaped by culture and individual personality. • “I need food, but I want steak.” • Wants + Buying Power = Demand 1-8 Need / Want Fulfillment • Needs and Wants Fulfilled through a Marketing Offer : Some combination of products, services, information, or experiences offered to a market to satisfy a need or want. 1-9 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 the ownership of anything. 1 - 10 Marketing Myopia • 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” 1 - 11 Value & Satisfaction • If performance is lower than expectations, satisfaction is low • If performance is higher than expectations, satisfaction is high 1 - 12 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. 1 - 13 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. 1 - 14 Marketing Management • The art and science of choosing target markets and building profitable relationships with them. 1 - 15 Marketing Management Questions to ask: 1. What customers will we serve? What is our target market? 1. How can we best serve these customers? What is our value 1 - 16 Segmentation & Target Marketing • Market Segmentation: • Target Marketing: Divide the market into segments of customers Select the segment to cultivate 1 - 17 Marketing Management • Demand Management • Demarketing Finding and increasing demand, also changing or reducing demand, such as in demarketing. Temporarily or permanently reducing the number of customers or shifting their demand 1 - 18 Value Proposition • The set of benefits or values a company promises to deliver to consumers to satisfy their needs. 1 - 19 Marketing Management Philosophies • Production Concept • Product Concept • Selling Concept • Marketing Concept • Societal Marketing Concept 1 - 20 The Marketing Mix • Product • Price • Distribution (Place) • Promotion 1 - 21 Customer Relationship Management • The process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. 1 - 22 Customer Perceived Value • Customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers. 1 - 23 Customer Satisfaction • Dependent on the product’s perceived performance relative to a buyer’s expectations. 1 - 24 Loyalty & Retention • Financial Benefits • Social Benefits • Structural Ties • Focus on profitable customers 1 - 25 • Partners inside the firm Partner Relationship Marketing All employees customer focused Teams coordinate efforts toward customers Supply chain management Strategic alliances 1 - 26 • Partners outside the firm 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. 1 - 27 Customer Equity • Customer equity is the total combined customer lifetime values of all the company’s customers. 1 - 28 The Internet • The technology behind a New Economy • Applications: “Click­and­mortar” companies “Click­only” companies Business­to­business e­commerce 1 - 29 New Marketing Landscape • Rapid Globalization • Ethics & Social Responsibility • Not­for­Profit Marketing • New World of Marketing Relationships 1 - 30 ...
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