Marketing chapter 1 edition(13)

Getting a Marketing Perspective
Chapter 1- slide 1 Copyright © 2010 Pearson Education, Inc.
Publishing as Prentice Hall

Components of a Business
• Finance- Capital- People
• Management
• Marketing

Why is Marketing Important?
• To let people know you exist
• To let them be inform about your product
or service
• To make goods and services available when
it is needed and where it is need and in the
right quantity
• To satisfy customers by delivering on what
you promised in your marketing messages

Q: What are the factors
impacting marketing decisions
1 - 4
today?

Factors Impacting Marketing Today
• Increased information from a variety of sources
1 - 5
• Knowledgeable Customer
•Increased buying power
•Intense competition
• Greater variety of goods and services
• Enhanced shopping convenience

Factors Impacting Marketing
• New Technologies and platforms- Websites, Internet,
intranet, social media, phones ect. can provide
companies with powerful new information and sales
channel
•Online software can facilitate purchase, training,
recruiting
•Companies can collect scientific information about
markets, customers, prospects and competitors from a
variety of sources and be in a position to make
comparisons and decisions
1 - 6
Today cont’d

• Companies can send value- added and incentives eg.
Coupons, samples, rebates, cash- back and information
to targeted customers
• Companies can customize offerings and services to
individual customers
1 - 7
Today

1 - 8
Today
•Greater distribution channel
•Variety in prices

Myths Impacting Marketing
• The best product or service idea will win and be
successful.
• You should cut back on your marketing and
advertising expenditures in a recession.
1 - 9
• Marketing is selling.
• Marketing is Public relations.
• Anyone can be a successful marketer

Doing any marketing at all, is better than doing
nothing.( shooting in the dark)
Great marketing is dreamed up by highly paid
executives who make ads and brochures and websites
and then let them loose in the marketplace.
Use short copy. People won't read long copy.
(NB.People need information not clutter)
1 - 10
Myths of Marketing

•Word-of-mouth marketing is all that a great
business needs.
Once your business has a solid customer base, it can
cease marketing.
•Repetition of a marketing message is boring.
1 - 11
Myths of Marketing
• Marketing should entertain and amuse

Marketing is part of all of our lives and
touches us in some way every day. To be
successful each company that deals with
customers on a daily basis must not only be
customer-driven, but customer-obsessed.
The best way to achieve this objective is to
develop a sound marketing function within
the organization.
1 - 12
Marketing Overview

Purpose of Marketing
• To build awareness, credibility and trust with your
preferred prospect or customer
• To be ‘out there’, networking, writing articles that
educate your preferred prospects, being active in
social media circles, getting recommendations,
testimonials and referrals, delivering what you
promised, going above and beyond for your
clients.

Purpose of Marketing cont’d
– To facilitate the decision-making process of
your preferred prospect or customer;
• The process is accomplished by providing
valuable educational content so that your
prospects have all the information they
require to make a good decision when
buying the service or product you sell.

Purpose of Marketing cont’d
• Is to lower the risk for your preferred
prospect or customer to purchase from
your competitor
• Is to make the purchasing decision easy
through: availability, trial, specials, brand
identification and quality service

Marketing Overview summary
Aside from the most important decisions of a
company which are: Vision, mission and
objectives , the first marketing strategy question a
company needs to ask is, “What consumers will
we serve?” This is market segmentation and
targeting.
The second marketing strategy question is, “How can
we best serve targeted customers?” This is
differentiation, branding and positioning.
1 - 16

Marketing Overview Summary
With its marketing strategy decided, the company
now constructs a marketing Program-consisting
of the four marketing mix elements, the 4 Ps.
Perhaps the most important step in the marketing
process involves building value-laden,
profitable relationships with target customers.
1 - 17
cont’d

The Holistic Marketing Concept
Marketing Channels
Dept. Senior
Products &
Services
Integrated
Marketing
Relationship
Marketing
Communications
Customers Channels Partners
1 - 19
Holistic Marketing
Mgt.
Internal
Marketing
Other
Dept.
Social
Responsibility
Marketing
Ethics
Legal Community
Environment

Chapter One
Marketing: Creating and Capturing
Customer Value

Creating and Capturing Customer
Value
Topic Outline
• What Is Marketing?
• Understand the Marketplace and Customer Needs
• Designing a Customer-Driven Marketing Strategy
• Preparing an Integrated Marketing Plan and Program
• Building Customer Relationships
• Capturing Value from Customers
• The Changing Marketing Landscape

What Is Marketing?
Marketing is a process by which
companies create value for customers and
build strong customer relationships to
capture value
from customers in
return

What Is Marketing?
• Marketing is about managing profitable customer
relationships
– Attracting new customers
– Retaining and growing current customers

What Is Marketing?
The Marketing Process

The ________ is the nation’s twenty-fourth
largest advertiser with an annual budget of
more than $1 billion.
1. Procter & Gamble Company
2. Boeing Company
3. Levi Strauss & Co.
4. U.S. Government

Answer
• 4. U.S. Government

Understanding the Marketplace
and Customer Needs
Core Concepts involved
You must understand:
• Customer needs, wants, and demands
• Market offerings
• Value and satisfaction
• Exchanges and relationships
• Markets

and Customer Needs
Customer Needs, Wants, and Demands
• States of deprivation
• Physical—food, clothing, warmth, safety
• Social—belonging and affection
• Individual—knowledge and self-expression
Needs
Wants and individual personality
• Form that needs take as they are shaped by culture
Demands • Wants backed by buying power

Marketing is ___________.
1. the same as advertising and sales
2. not used by small corporations
3. about satisfying customer needs
4. making a profit

Answer!
• 3. about satisfying customer needs

Marketing is ________.
1. part of manufacturing
2. part of the finance department
3. managing customer relationships
4. sales promotion

Answer!
• 3.managing customer relationships

The most basic concept underlying marketing
is that of satisfying ________.
1. profits
2. products
3.human needs
4. services

3. HUMAN NEEDS

and Customer Needs
• Market offerings are some
combination of products,
services, information, or
experiences offered to a
market to satisfy a need or
want
• Marketing myopia is
focusing only on existing
wants and losing sight of
underlying consumer
needs

and Customer Needs
Customer Value and Satisfaction
Expectations
Customers
• Value and
satisfaction
Marketers
• Set the right level of
expectations
• Not too high or low

Value and Satisfaction
• Perceived Value
– The customers’ evaluation of the difference
between benefits and costs.
– Customers often do not judge values and costs
accurately or objectively.
• Customer Satisfaction
– Product’s perceived performance relative to
customers’ expectations.

and Customer Needs
Exchange is the act of obtaining a desired
object from someone by offering
something in return

and Customer Needs
Markets are the set of actual and
potential buyers of a product

Designing a Customer-Driven
Marketing Strategy
Marketing management is the art and
science of choosing target markets and
building profitable relationships with them
– What customers will we serve?
– How can we best serve these customers?

Selecting Customers and Creating
Copyright © 2010 Pearson Education, Inc.
Chapter 1 1- - slide 41
41 Publishing as Prentice Hall
Value
• What customers will we serve?
– Marketers select customers that can be served
profitably- target market
• How can we serve these customers best?
– By defining a value proposition
– Includes the set of benefits or values a company
promises to deliver to consumers in order to satisfy
their needs

Marketing Strategy
Selecting Customers to Serve
Market segmentation refers to dividing the
markets into segments of customers
Target marketing refers to which segments
to go after

Marketing Strategy
Selecting Customers to Serve
Demarketing :Efforts aimed at discouraging (not
destroying) the demand for a product which (1) a firm
cannot supply in large-enough quantities, or (2) does
not want to supply in a certain region where the high
costs of distribution or promotion allow only little profit
margin.
Common demarketing strategies include higher prices,
scaled-down advertising, and product redesign.

Marketing Strategy
Choosing a Value Proposition
The value proposition is the set of
benefits or values a company promises to
deliver to customers to satisfy their needs
Such value proposition differentiate one
brand from another

Marketing Management orientations
• Marketing Management wants to design
strategies that will build profitable
relationships with target consumers. But
what philosophy should guide these
strategies?

Marketing Strategy
Marketing Management Orientations
Production
concept
Product
concept
Selling
concept
Marketing
concept
Societal
concept

Marketing Strategy
Production concept is the idea that
consumers will favor products that are
available or highly affordable
Management should focus on improving
production and distribution efficiency

Marketing Strategy
Product concept is the idea that consumers
will favor products that offer the most
quality, performance, and features.
Organization should therefore devote its
energy to making continuous product
improvements.

Marketing Strategy
Selling concept is the idea that consumers
will not buy enough of the firm’s products
unless it undertakes a large scale selling
and promotion effort
This concept is typically practiced with
unsought goods-those that buyers do not
normally think of buying, such as insurance.

Marketing Strategy
Marketing concept is the
idea that achieving
organizational goals
depends on knowing the
needs and wants of the
target markets and
delivering the desired
satisfactions better than
competitors do

Marketing Strategy
Societal marketing concept
is the idea that a company
should make good marketing
decisions by considering
consumers’ wants, the
company’s requirements,
consumers’ long-term
interests, and society’s long-run
interests

Marketing Strategy

Preparing an Integrated Marketing
Plan and Program
The marketing mix is the set of tools (four Ps)
the firm uses to implement its marketing
strategy. It includes product, price,
promotion, and place.
Integrated marketing program is a
comprehensive plan that communicates
and delivers the intended value to chosen
customers.

Building Customer Relationships
Customer Relationship Management (CRM)
• The overall process of building
and maintaining profitable
customer relationships by
delivering superior customer
value and satisfaction
• It the most important concept
of modern marketing
• It deals with acquiring, growing
and keeping customers.

Relationship Building Blocks: Customer Value
and Satisfaction
Customer-perceived
value
• The difference
between total
customer value
and total
customer cost
Customer
satisfaction
• The extent to
which a product’s
perceived
performance
matches a
buyer’s
expectations

Customer Relationship Levels and Tools
Basic
Relationships
Full
Partnerships

The Changing Nature of Customer
Relationships
• Relating with more carefully selected
customers uses selective relationship
management to target fewer, more profitable
customers
• Relating more deeply and interactively by
incorporating more interactive two way
relationships through blogs, Websites, online
communities and social networks

Partner relationship management involves
working closely with partners in other
company departments and outside the
company to jointly bring greater value to
customers

Partner Relationship Management
• Partners inside the company is every
function area interacting with customers
– Electronically
– Cross-functional teams
• Partners outside the company is how
marketers connect with their suppliers,
channel partners, and competitors by
developing partnerships

Partner Relationship Management
• Supply chain is a channel that stretches
from raw materials to components to final
products to final buyers
• Supply management
• Strategic partners
• Strategic alliances

Capturing Value from Customers
Creating Customer Loyalty and Retention
• Customer lifetime value is the value of the
entire stream of purchases that the
customer would
make over a
lifetime of
patronage

Growing Share of Customer
Share of customer is the portion of the
customer’s purchasing that a company gets
in its product categories

Capturing Value from
Customers
Customer equity is
the total combined
customer lifetime
values of all of the
company’s
customers

Building Customer Equity
• Building the right relationships with the
right customers involves treating
customers as assets that need to be
managed and maximized
• Different types of customers require
different relationship management
strategies
– Build the right relationship with the right
customers

The Changing Marketing
Landscape
Major Developments
Digital age
Rapid
globalization
Ethics and
social
responsibility
Not-for-profit
marketing

So, What Is Marketing?
Pulling It All Together

REVISION

Which of the following reflects the
marketing concept?
• A) "The supplier is king."
• B) "Marketing should be viewed as hunting and not
gardening."
• C) "This is what I make; won't you please buy it?"
• D) "This is what I want; won't you please make it?"
• E) "Customers need to be told where they want to go."
• Answer: D
• Reflective Thinking
• Skill: Application

Some fast-food restaurants offer tasty and convenient food at
affordable prices, but in doing so they contribute to a national
obesity epidemic and environmental problems. These fast-food
restaurants overlook the ________ philosophy.
• A) marketing concept
• B) product concept
• C) production concept
• D) societal marketing concept
• E) selling concept

Answer: D
Skill: Application

Members of the sales team at Dekko International visit only
prospective customers who purchase a minimum of $50,000 of
insulated wire per year. Dekko is using ________.
• A) selective relationship management
• B) a frequency marketing program
• C) a club marketing program
• D) demarketing
• E) a value proposition

Answer: A
• Application

Marketing chapter 1 edition(13)

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