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Chapter 1Chapter 1Defining Marketing for theDefining Marketing for the2121stst CenturyCenturybybywww.bookfiesta4u.com1-2PowerPoint byPowerPoint byMilton M. PressleyMilton M. PressleyUniversity of New OrleansUniversity of New Orleans
The future is not aheadThe future is not aheadof us. It has alreadyof us. It has alreadyhappened.happened.Kotler onMarketingwww.bookfiesta4u.com1-3happened.happened.Unfortunately, it isUnfortunately, it isunequally distributedunequally distributedamong companies,among companies,industries and nations.industries and nations.
Chapter ObjectivesIn this chapter we will address the followingIn this chapter we will address the followingquestions:questions:What is the new economy like?What is the new economy like?What are the tasks of marketing?What are the tasks of marketing?www.bookfiesta4u.com1-4What are the tasks of marketing?What are the tasks of marketing?What are the major concepts and tools ofWhat are the major concepts and tools ofmarketing?marketing?What orientations do companies exhibit in theWhat orientations do companies exhibit in themarketplace?marketplace?How are companies and marketers responding toHow are companies and marketers responding tothe new challenges?the new challenges?
The New EconomySubstantial increase in buying powerSubstantial increase in buying powerA greater variety of goods and servicesA greater variety of goods and servicesA greater amount of information aboutA greater amount of information aboutpractically anythingpractically anythingwww.bookfiesta4u.com1-5practically anythingpractically anythingA greater ease in interacting and placingA greater ease in interacting and placingand receiving ordersand receiving ordersAn ability to compare notes on productsAn ability to compare notes on productsand servicesand services
The New EconomyWebsites can provide companies withWebsites can provide companies withpowerful new information and salespowerful new information and saleschannels.channels.Companies can collect fuller and richerCompanies can collect fuller and richerinformation about markets, customers,information about markets, customers,www.bookfiesta4u.com1-6information about markets, customers,information about markets, customers,prospects and competitors.prospects and competitors.Companies can facilitate and speed upCompanies can facilitate and speed upcommunications among employees.communications among employees.Companies can have 2Companies can have 2--waywaycommunication with customers andcommunication with customers andprospectsprospects
The New EconomyCompanies can send ads, coupons,Companies can send ads, coupons,samples, information to targetedsamples, information to targetedcustomers.customers.Companies can customize offerings andCompanies can customize offerings andservices to individual customers.services to individual customers.www.bookfiesta4u.com1-7services to individual customers.services to individual customers.The Internet can be used as aThe Internet can be used as acommunication channel for purchasing,communication channel for purchasing,training, and recruiting.training, and recruiting.Companies can improve logistics andCompanies can improve logistics andoperations for cost savings whileoperations for cost savings whileimproving accuracy and service quality.improving accuracy and service quality.
The three major challenges faced byThe three major challenges faced bybusinesses today are globalization,businesses today are globalization,advances in technology, and deregulation.advances in technology, and deregulation.www.bookfiesta4u.com1-8advances in technology, and deregulation.advances in technology, and deregulation.Which of these affords the greatestWhich of these affords the greatestopportunity foropportunity for establishedestablished businesses?businesses?Which affords the greatestWhich affords the greatestopportunities foropportunities for newnewbusinesses? Why?businesses? Why?
Marketing TaskTen rules of radical marketingTen rules of radical marketingThe CEO must own the marketing function.The CEO must own the marketing function.Make sure the marketing department startsMake sure the marketing department startssmall and flat and stays small and flat.small and flat and stays small and flat.www.bookfiesta4u.com1-9Get face to face with the people who matterGet face to face with the people who mattermostmost –– the customers.the customers.Use market research cautiously.Use market research cautiously.Hire only passionate missionaries.Hire only passionate missionaries.
Marketing TaskLove and respect your customers.Love and respect your customers.Create a community of consumers.Create a community of consumers.Rethink the marketing mix.Rethink the marketing mix.Celebrate common sense.Celebrate common sense.www.bookfiesta4u.com1-10Be true to the brand.Be true to the brand.Three stages of marketing practiceThree stages of marketing practiceEntrepreneurial MarketingEntrepreneurial MarketingFormulated MarketingFormulated MarketingIntrepreneurial MarketingIntrepreneurial Marketing
The Scope of MarketingMarketing: typically seen as theMarketing: typically seen as thetask of creating, promoting, andtask of creating, promoting, anddelivering goods and services todelivering goods and services toconsumers and businesses.consumers and businesses.www.bookfiesta4u.com1-11consumers and businesses.consumers and businesses.
Table 1.1DemandStates andMarketingTasks1. Negative1. NegativedemanddemandA major part of the market dislikes theA major part of the market dislikes theproduct and may even pay a price toproduct and may even pay a price toavoid itavoid it——vaccinations, dental work,vaccinations, dental work,vasectomies, and gallbladdervasectomies, and gallbladderoperations, for instance. Employers haveoperations, for instance. Employers havea negative demand for exa negative demand for ex--convicts andconvicts andalcoholics as employees. The marketingalcoholics as employees. The marketingtask is to analyze why the markettask is to analyze why the marketdislikes the product and whether adislikes the product and whether amarketing program consisting ofmarketing program consisting ofproduct redesign, lower prices, andproduct redesign, lower prices, andmore positive promotion can changemore positive promotion can changewww.bookfiesta4u.com1-12more positive promotion can changemore positive promotion can changebeliefs and attitudes.beliefs and attitudes.2. No demand2. No demand Target consumers may be unaware of orTarget consumers may be unaware of oruninterested in the product. Farmersuninterested in the product. Farmersmay not be interested in a new farmingmay not be interested in a new farmingmethod, and college students may notmethod, and college students may notbe interested in foreignbe interested in foreign--languagelanguagecourses. The marketing task is to findcourses. The marketing task is to findways to connect the benefits of theways to connect the benefits of theproduct with people’s natural needs andproduct with people’s natural needs andinterests.interests.See text for complete table
Can you name a category ofCan you name a category ofproducts for which your negativeproducts for which your negativefeelings have softened?feelings have softened?www.bookfiesta4u.com1-13feelings have softened?feelings have softened?What precipitatedWhat precipitatedthis change?this change?
The Scope of MarketingPlacesPlacesPropertiesPropertiesOrganizationsOrganizationsGoodsGoodsServicesServicesExperiencesExperienceswww.bookfiesta4u.com1-14OrganizationsOrganizationsInformationInformationIdeasIdeasExperiencesExperiencesEventsEventsPersonsPersons
Marketing Conceptsand ToolsMarketers and ProspectsMarketers and ProspectsNeeds, Wants, and DemandsNeeds, Wants, and DemandsProduct, Offering, and BrandProduct, Offering, and BrandValue and SatisfactionValue and Satisfactionwww.bookfiesta4u.com1-19Value and SatisfactionValue and SatisfactionCustomer value triadCustomer value triadValueValueValue = Benefits / Costs =Value = Benefits / Costs =(Functional benefits + Emotional benefits) /(Functional benefits + Emotional benefits) /(Monetary costs + Time costs + Energy costs +(Monetary costs + Time costs + Energy costs +Psychic costs)Psychic costs)
Marketing Conceptsand ToolsExchange and TransactionsExchange and TransactionsExchangeExchangeTransactionTransactionwww.bookfiesta4u.com1-20TransactionTransactionBarterBarterTransferTransferBehavioral responseBehavioral response
Marketing Conceptsand ToolsRelationships and NetworksRelationships and NetworksRelationship marketingRelationship marketingMarketing networkMarketing networkwww.bookfiesta4u.com1-21Marketing networkMarketing networkMarketing ChannelsMarketing ChannelsSupply ChainSupply ChainCompetitionCompetition
Company OrientationsToward the MarketplaceProduction ConceptProduction ConceptProduct conceptProduct conceptwww.bookfiesta4u.com1-23Selling ConceptSelling ConceptMarketing ConceptMarketing Concept
Company OrientationsToward the MarketplaceTarget MarketTarget MarketCustomer NeedsCustomer Needswww.bookfiesta4u.com1-24Stated needsStated needsReal needsReal needsUnstated needsUnstated needsDelight needsDelight needsSecret needsSecret needs
Company OrientationsToward the MarketplaceIntegrated MarketingIntegrated MarketingExternal marketingExternal marketingwww.bookfiesta4u.com1-25Internal marketingInternal marketing
Company OrientationsToward the MarketplaceProfitabilityProfitabilitySales declineSales declineSlow growthSlow growthwww.bookfiesta4u.com1-26Slow growthSlow growthChanging buying patternsChanging buying patternsIncreasing competitionIncreasing competitionIncreasing marketingIncreasing marketingexpendituresexpenditures
Company OrientationsToward the MarketplaceSocietal Marketing ConceptSocietal Marketing ConceptCauseCause--related marketingrelated marketingwww.bookfiesta4u.com1-27
Can you identify the trends that haveCan you identify the trends that havemade the marketing concept, themade the marketing concept, thecustomer concept, and the societalcustomer concept, and the societalwww.bookfiesta4u.com1-28customer concept, and the societalcustomer concept, and the societalmarketing concept more attractivemarketing concept more attractivemodels for contemporarymodels for contemporarymarketing managers?marketing managers?
How Business andMarketing are ChangingCustomersCustomersBrand manufacturersBrand manufacturerswww.bookfiesta4u.com1-29StoreStore--based retailersbased retailers
How Business andMarketing are ChangingCompany responses and adjustmentsCompany responses and adjustmentsReengineeringReengineeringOutsourcingOutsourcingPartnerPartner--supplierssuppliersMarketMarket--centeredcenteredwww.bookfiesta4u.com1-30OutsourcingOutsourcingEE--commercecommerceBenchmarkingBenchmarkingAlliancesAlliancesMarketMarket--centeredcenteredGlobal and localGlobal and localDecentralizedDecentralized
How Business andMarketing are ChangingMarketer ResponsesMarketer Responsesand Adjustmentsand AdjustmentsCustomer relationshipCustomer relationshipmarketingmarketingIntegrated marketingIntegrated marketingcommunicationscommunicationswww.bookfiesta4u.com1-31marketingmarketingCustomer lifetime valueCustomer lifetime valueCustomer shareCustomer shareTarget marketingTarget marketingCustomizationCustomizationCustomer databaseCustomer databasecommunicationscommunicationsChannels as partnersChannels as partnersEvery employee aEvery employee amarketermarketerModelModel--based decisionbased decisionmakingmaking
Chapter 2Chapter 2Adapting Marketing To TheAdapting Marketing To TheNew EconomyNew Economybybywww.bookfiesta4u.com1-32PowerPoint byPowerPoint byMilton M. PressleyMilton M. PressleyUniversity of New OrleansUniversity of New Orleans
The Internet willThe Internet willcreate new winnerscreate new winnersand bury theand bury theKotler onMarketingwww.bookfiesta4u.com1-33and bury theand bury thelaggards.laggards.
Chapter ObjectivesIn this chapter, we will address theIn this chapter, we will address thefollowing questions:following questions:What are the major forces driving the NewWhat are the major forces driving the NewEconomy?Economy?www.bookfiesta4u.com1-34Economy?Economy?How are business and marketing practicesHow are business and marketing practiceschanging as a result of the New Economy?changing as a result of the New Economy?How are marketers using the Internet,How are marketers using the Internet,customer databases, and customercustomer databases, and customerrelationship management in the Newrelationship management in the NewEconomy?Economy?
Adapting Marketing to theNew EconomyMajor Drivers of the New EconomyMajor Drivers of the New EconomyDigitization and ConnectivityDigitization and ConnectivityDisintermediation andDisintermediation andwww.bookfiesta4u.com1-35Disintermediation andDisintermediation andReintermediationReintermediationCustomization andCustomization andCustomerizationCustomerization
Procter & Gamble’s Reflect.com site allows customersProcter & Gamble’s Reflect.com site allows customersto design their own beauty productsto design their own beauty productswww.bookfiesta4u.com1-36
Adapting Marketing to theNew EconomyIndustry ConvergenceIndustry ConvergenceHow Business Practices are ChangingHow Business Practices are ChangingOrganize by product units to organize byOrganize by product units to organize bycustomer segmentscustomer segmentswww.bookfiesta4u.com1-37customer segmentscustomer segmentsShift focus from profitable transactions toShift focus from profitable transactions tocustomer lifetime valuecustomer lifetime valueShift focus from financial scorecard to alsoShift focus from financial scorecard to alsofocusing on the marketing scorecardfocusing on the marketing scorecardShift focus from shareholders to stakeholdersShift focus from shareholders to stakeholders
Table 2-1: Old Economy vs. New EconomyOld EconomyOld Economy New EconomyNew EconomyOrganize by product unitsOrganize by product unitsFocus on profitable transactionsFocus on profitable transactionsLook primarily at financialLook primarily at financialscorecardscorecardFocus on shareholdersFocus on shareholdersOrganize by customer segmentsOrganize by customer segmentsFocus on customer lifetime valueFocus on customer lifetime valueLook also at marketing scorecardLook also at marketing scorecardFocus on stakeholdersFocus on stakeholdersEveryone does the marketingEveryone does the marketingwww.bookfiesta4u.com1-38Marketing does the marketingMarketing does the marketingBuild brands through advertisingBuild brands through advertisingFocus on customer acquisitionFocus on customer acquisitionNo customer satisfactionNo customer satisfactionmeasurementmeasurementOverpromise, underdeliverOverpromise, underdeliverEveryone does the marketingEveryone does the marketingBuild brands through behaviorBuild brands through behaviorFocus on customer retention andFocus on customer retention andgrowthgrowthMeasure customer satisfaction andMeasure customer satisfaction andretention rateretention rateUnderpromise, overdeliverUnderpromise, overdeliver
Adapting Marketing to theNew EconomyEveryone does the marketingEveryone does the marketingBuild brands through performance,Build brands through performance,not just advertisingnot just advertisingCustomer retention ratherCustomer retention ratherwww.bookfiesta4u.com1-39Customer retention ratherCustomer retention ratherthan customer acquisitionthan customer acquisitionFrom none to inFrom none to in--depth customerdepth customersatisfaction measurementsatisfaction measurementFrom overFrom over--promise, underpromise, under--deliver todeliver tounderunder--promise, overpromise, over--deliverdeliverThe New HybridThe New Hybrid
How Marketing PracticesHow Marketing Practicesare Changing: Eare Changing: E--BusinessBusinessEE--businessbusinessAdapting Marketing to theNew Economywww.bookfiesta4u.com1-40EE--businessbusinessEE--commercecommerceEE--purchasingpurchasingEE--marketingmarketingInternet Domains: B2CInternet Domains: B2C(Business to Customer)(Business to Customer)
Customers can shop online at Calyx and Corolla orCustomers can shop online at Calyx and Corolla orask for a catalog and shop by phoneask for a catalog and shop by phonewww.bookfiesta4u.com1-41
Adapting Marketing to theNew EconomyInternet Domains: B2BInternet Domains: B2B(Business to Business)(Business to Business)www.bookfiesta4u.com1-42
www.transora.com: global online marketplace forwww.transora.com: global online marketplace forthe consumer packaged goods industrythe consumer packaged goods industrywww.bookfiesta4u.com1-44
Adapting Marketing to theNew EconomyInternet Domains: C2CInternet Domains: C2C(Consumer to Consumer)(Consumer to Consumer)Internet Domains: C2BInternet Domains: C2Bwww.bookfiesta4u.com1-45Internet Domains: C2BInternet Domains: C2B(Customer to Business)(Customer to Business)Pure Click vs. Brick andPure Click vs. Brick andClick CompaniesClick CompaniesPurePure--click companiesclick companies
CarPoint, leading metamediary for car buying, is a pureCarPoint, leading metamediary for car buying, is a pureclick company: It exists only on the Web.click company: It exists only on the Web.www.bookfiesta4u.com1-46
Adapting Marketing to theNew EconomyBrick and Click companiesBrick and Click companieswww.bookfiesta4u.com1-47
Which is more important forWhich is more important fordeveloping an edeveloping an e--presence: the agilitypresence: the agilityof a pure click company, or the wellof a pure click company, or the wellwww.bookfiesta4u.com1-48of a pure click company, or the wellof a pure click company, or the welldefined and readily identifiabledefined and readily identifiableresources of a traditionalresources of a traditionalbrick and mortarbrick and mortarcompany?company?
Adapting Marketing to theNew EconomyHow Marketing Practices are Changing:How Marketing Practices are Changing:Setting Up Web SitesSetting Up Web SitesDesigning an Attractive WebsiteDesigning an Attractive WebsiteSeven elements of effective sitesSeven elements of effective siteswww.bookfiesta4u.com1-49Seven elements of effective sitesSeven elements of effective sitesContextContextContentContentCommunityCommunityCustomizationCustomizationCommunicationCommunicationConnectionConnectionCommerceCommerce
Would you be willing to give up one orWould you be willing to give up one ormore of the seven elements of an effectivemore of the seven elements of an effectiveweb site in order to speed the deploymentweb site in order to speed the deploymentwww.bookfiesta4u.com1-50of a new company eof a new company e--commerce site?commerce site?What would the expected tradeWhat would the expected trade--offs beoffs bebetween an effective sitebetween an effective siteand an early weband an early webpresence?presence?
Attracting and Keeping VisitorsAttracting and Keeping VisitorsHow can we get more prospects to know and visit our site?How can we get more prospects to know and visit our site?How can we use marketing to spread wordHow can we use marketing to spread word--ofof--mouth?mouth?How can we convert visitors into repeaters?How can we convert visitors into repeaters?How do we make our site more experiential and real?How do we make our site more experiential and real?How can we build a strong relationship with our customers?How can we build a strong relationship with our customers?How can we build a customer community?How can we build a customer community?How can we capture and exploit customer data for upHow can we capture and exploit customer data for up--sellingsellingTable 2Table 2--2:2:SettingSettingUp aUp aDotDot--comcomPresencePresencewww.bookfiesta4u.com1-51How can we capture and exploit customer data for upHow can we capture and exploit customer data for up--sellingsellingand crossand cross--selling?selling?How much should we spend on building and marketing ourHow much should we spend on building and marketing oursite?site?Advertising on the InternetAdvertising on the InternetWhat are the various ways that we can advertise on theWhat are the various ways that we can advertise on theInternet?Internet?How do we choose the right sites for placing our ads orHow do we choose the right sites for placing our ads orsponsorship?sponsorship?See text for complete table
Adapting Marketing to theNew EconomyPlacing Ads and Promotions OnlinePlacing Ads and Promotions OnlineBanner adsBanner adsSponsorshipsSponsorshipsMicrositeMicrositewww.bookfiesta4u.com1-53MicrositeMicrositeInterstitialsInterstitialsBrowser adsBrowser adsAlliances and affiliateAlliances and affiliateprogramsprogramsPushPush
Infogate.com “pushes” targeted content and ads to thoseInfogate.com “pushes” targeted content and ads to thosewho are interested in a product or product categorywho are interested in a product or product categorywww.bookfiesta4u.com1-54
Adapting Marketing to theNew EconomyBuilding a Revenue and Profit ModelBuilding a Revenue and Profit ModelAdvertising incomeAdvertising incomeSponsorship incomeSponsorship incomeMembership andMembership andsubscriptionssubscriptionswww.bookfiesta4u.com1-55Membership andMembership andsubscriptionssubscriptionsProfile incomeProfile incomeProduct and serviceProduct and servicesalessalesTransaction commissionTransaction commissionand feesand feesMarket research/informationMarket research/informationReferral incomeReferral income
Adapting Marketing to theNew EconomyHow Marketing Practices are Changing:How Marketing Practices are Changing:Customer Relationship MarketingCustomer Relationship MarketingReduce rate of customer defectionReduce rate of customer defectionIncrease longevity ofIncrease longevity ofwww.bookfiesta4u.com1-56Increase longevity ofIncrease longevity ofcustomer relationshipcustomer relationshipEnhance growth potentialEnhance growth potentialthrough crossthrough cross--selling and upselling and up--sellingsellingMake low profit customers more profitableMake low profit customers more profitableor terminate themor terminate them
Adapting Marketing to theNew EconomyFocus disproportionate effortFocus disproportionate efforton high value customerson high value customerswww.bookfiesta4u.com1-57
Table 2-3: Mass Marketing vs.One-to-One MarketingMass MarketingMass Marketing OneOne--toto--One MarketingOne MarketingAverage customerAverage customerCustomer anonymityCustomer anonymityStandard productStandard productMass productionMass productionMass distributionMass distributionIndividual customerIndividual customerCustomer profileCustomer profileCustomized marketCustomized marketofferingofferingCustomized productionCustomized productionwww.bookfiesta4u.com1-58Mass distributionMass distributionMass advertisingMass advertisingMass promotionMass promotionOneOne--way messageway messageEconomies of scaleEconomies of scaleShare of marketShare of marketAll customersAll customersCustomer attractionCustomer attractionIndividualized distributionIndividualized distributionIndividualized messageIndividualized messageIndividualized incentivesIndividualized incentivesTwoTwo--way messagesway messagesEconomies of scopeEconomies of scopeShare of customerShare of customerProfitable customersProfitable customersCustomer retentionCustomer retention
Adapting Marketing to theNew EconomyFour steps for OneFour steps for One--toto--One MarketingOne MarketingDon’t go after everyone,Don’t go after everyone,identify prospects.identify prospects.Define customers by their needsDefine customers by their needswww.bookfiesta4u.com1-59Define customers by their needsDefine customers by their needsand their value to the company.and their value to the company.Individual interaction with customersIndividual interaction with customersbuilds stronger relationships.builds stronger relationships.Customize messages, services, andCustomize messages, services, andproducts for each customer.products for each customer.
Data Warehouses and Data MiningData Warehouses and Data MiningUsing the databaseUsing the databaseTo identify prospectsTo identify prospectsTo determine target marketTo determine target marketAdapting Marketing to theNew Economywww.bookfiesta4u.com1-61To determine target marketTo determine target marketTo deepen customer loyaltyTo deepen customer loyaltyTo reactivate customerTo reactivate customerpurchasespurchasesTo avoid serious customerTo avoid serious customermistakesmistakesThe Downside of DatabaseThe Downside of DatabaseMarketingMarketing
Chapter 3Chapter 3Building CustomerBuilding CustomerSatisfaction, Value, andSatisfaction, Value, andRetentionRetentionbybywww.bookfiesta4u.com1-62bybyPowerPoint byPowerPoint byMilton M. PressleyMilton M. PressleyUniversity of New OrleansUniversity of New Orleans
It is no longerIt is no longerenough to satisfyenough to satisfycustomers. You mustcustomers. You mustKotler onMarketingwww.bookfiesta4u.com1-63customers. You mustcustomers. You mustdelight them.delight them.
Chapter ObjectivesIn this chapter, we will address theIn this chapter, we will address thefollowing questions:following questions:What are customer value and satisfaction,What are customer value and satisfaction,and how can companies deliver them?and how can companies deliver them?What makes a highWhat makes a high--performance business?performance business?www.bookfiesta4u.com1-64What makes a highWhat makes a high--performance business?performance business?How can companies both attractHow can companies both attractand retain customers?and retain customers?How can companies improve both customerHow can companies improve both customerand company profitability?and company profitability?How can companies deliver total quality?How can companies deliver total quality?
Defining Customer Valueand SatisfactionCustomer Perceived Value (CPV)Customer Perceived Value (CPV)Total custo