What is Marketing?Marketing Defined: “Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others”Marketing is about managing profitablecustomer relationships Attracting new customers Retaining and growing current customers 1-1 Goal 1: Define marketing and the marketing process.
The Marketing Process A Five-Step Process1. Understand the marketplace and customer needs and wants2. Design a customer-driven marketing strategy3. Construct a marketing program that delivers superior value4. Build profitable relationships and create customer delight5. Capture value from customers to create profits and customer quality 1-2 Goal 1: Define marketing and the marketing process.
Understanding the Marketplace Core Concepts Need State of felt deprivationNeeds, wants, and Example: Need food demands WantsMarketing offers: The form of needs as including products, shaped by culture and services and the individual experiences Example: Want a BigValue and satisfaction MacExchange, transactions Demands and relationships Wants which are backedMarkets by buying power 1-4 Goal 2: Identify the five core marketplace concepts.
Understanding the Marketplace Core Concepts Marketing offer Combination ofNeeds, wants, and products, services, info demands rmation or experiencesMarketing offers: that satisfy a need or including products, want services and Offer may include experiences services, activities, peoValue and satisfaction ple, places, informatio n or ideasExchange, transactions and relationshipsMarkets 1-5 Goal 2: Identify the five core marketplace concepts.
Understanding the Marketplace Core Concepts Value Customers formNeeds, wants, and expectations demands regarding valueMarketing offers: Marketers must including products, deliver value to services and consumers experiences SatisfactionValue and satisfaction A satisfied customerExchange, transactions will buy again and tell and relationships others about their good experienceMarkets 1-6 Goal 2: Identify the five core marketplace concepts.
Understanding the Marketplace Core Concepts Exchange The act of obtaining aNeeds, wants, and desired object from demands someone by offeringMarketing offers: something in return including products, One exchange is not the services and goal, relationships with experiences several exchanges areValue and satisfaction the goal Relationships are builtExchange, transactions through delivering value and relationships and satisfactionMarkets 1-7 Goal 2: Identify the five core marketplace concepts.
Understanding the Marketplace Core Concepts Market Set of actual andNeeds, wants, and potential buyers of a demands productMarketing offers: Marketers seek buyers including products, that are profitable services and experiencesValue and satisfactionExchange, transactions and relationshipsMarkets 1-8 Goal 2: Identify the five core marketplace concepts.
Marketing ManagementMarketing management is the art andscience of choosing target markets andbuilding profitable relationships withthem. This definition must include answers to two questions: • What customers will we serve? • How can we serve these customers best? 1 - 10Goal 3: Identify elements of a customer-driven strategy.
Selecting Customers and Creating ValueCustomer Management What customers will we serve? Marketers select customers that can be served profitablyValue Proposition How can we serve these customers best? Includes the set of benefits or values a company promises to deliver to consumers to satisfy their needs 1 - 11 Goal 3: Identify elements of a customer-driven strategy.
Marketing Management Philosophies • Consumers favor products that are available and highly affordable. Production Concept • Improve production and distribution. • Consumers favor products that offer the most quality, performance, and Product Concept innovative features. • Consumers will buy products only if Selling Concept the company promotes/ sells these products. Practice at overcapacity. • Focuses on needs/ wants of target Marketing Concept markets & delivering satisfaction better than competitors. • Focuses on needs/ wants of targetSocietal Marketing Concept markets & delivering superior value. - 13 1 Improve society’s well-being.
The Selling and Marketing Concepts Contrasted 1 - 14
The Marketing PlanTransforms the marketing strategyinto action.Includes the marketing mix and the4P’s of marketing Product Price Place Promotion 1 - 15 Goal 3: Identify elements of a customer-driven strategy.
Building Customer RelationshipsCRM – Customer relationshipmanagementThe overall process of building andmaintaining profitable customerrelationships by delivering superiorcustomer value and satisfaction. Itdeals with all aspects of acquiring,keeping and growing customers. 1 - 16 Goal 4: Discuss CRM and capturing value.
Relationship Building Blocks: Value and SatisfactionPerceived Value The customer’s 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 customer’s expectations. 1 - 17 Goal 4: Discuss CRM and capturing value.
Customer Relationship Levels & Tools: Not All Customers are EqualBasic Relationships Low-margin customersFull Partnerships High-margin & key customersTools: Frequency MarketingPrograms, Frequent Flier Programs, VeryImportant Customers, Club Marketing Programs 1 - 18 Goal 4: Discuss CRM and capturing value.
The Changing Nature of Customer RelationshipsRelating with Selected Customers: Selective relationship management • Using customer profitability analysis for weeding out unprofitable customersRelating for the Long-Term Retaining & building long-term relationships with customersRelating Directly Direct marketing using online platforms 1 - 19
Partner Relationship Management Working with others inside & outside the company to jointly bring more value to customers.Partners Inside the Company Forming cross-functional customers teams for creating customer valuePartners Outside the Company Connecting with suppliers, channel partners & competitors Forming strategic alliances 1 - 20
Capturing Value from Customers Key Concepts • Customer delight leads toCustomer Loyalty emotionaland Retention relationships andShare of loyaltyCustomer • CustomerCustomer Equity Lifetime Value shows true worth of a customer 1 - 21 Goal 4: Discuss CRM and capturing value.
Capturing Value from Customers Key Concepts • Share of customer’sCustomer Loyalty purchase in aand Retention product category.Share of • Achieved throughCustomer offering greaterCustomer Equity variety, cross-sell and up-sell strategies. 1 - 22 Goal 4: Discuss CRM and capturing value.
Capturing Value from Customers Key Concepts • The combined customer lifetime values of all currentCustomer Loyalty and potentialand Retention customers. • Measures a firm’sShare of performance, but in aCustomer manner that looks toCustomer Equity the future. • Choosing the “best” customers is key 1 - 23 Goal 4: Discuss CRM and capturing value.
Customer Relationship Groups Butterflies: True Friends: Good fit between Good fit between High company’s offering & company’s offering & Profitability customers needs; high customers needs; highest profit potential profit potential Potential Strangers: Barnacles:Profitability Good fit between Good fit between Low company’s offering & company’s offering & Profitability customers needs; high customers needs; high profit potential profit potential Short-term Customers Long-term Customers 1 - 24
Marketing Landscape Challenges Growth of the InternetDigital age Advances inGlobalization telecommunications, i nformation, transportEthics and social ationresponsibility Customer research and trackingNot-for-profit Product developmentmarketing Distribution New advertising toolsMarketing 24/7 marketing through the Internetrelationships 1 - 25 Goal 5: Discuss trends and forces.
Marketing Landscape Challenges Geographical and cultural distancesDigital age have shrunkGlobalization Greater marketEthics and social coverageresponsibility More options for purchasing andNot-for-profit manufacturingmarketing Increased competition from foreignMarketing competitorsrelationships 1 - 26 Goal 5: Discuss trends and forces.
Marketing Landscape Challenges Marketers need to take greatDigital age responsibility for theGlobalization impact of theirEthics and social actionsresponsibility Caring capitalism is aNot-for-profit way to differentiate your companymarketingMarketingrelationships 1 - 27 Goal 5: Discuss trends and forces.
Marketing Landscape Challenges Many organizations are realizing theDigital age importance ofGlobalization strategic marketingEthics and social Performing artsresponsibility Government agencies CollegesNot-for-profit Hospitalsmarketing ChurchesMarketingrelationships 1 - 28 Goal 5: Discuss trends and forces.
Marketing Landscape Challenges Profits through managing long-termDigital age customer equityGlobalization Improve customerEthics and social knowledgeresponsibility Target profitable customersNot-for-profit Keep profitablemarketing customersMarketingrelationships 1 - 29 Goal 5: Discuss trends and forces.
What is MarketingThe process of building profitablecustomer relationships by creating valuefor customers and capturing value inreturn 1 - 30