1. Marketing: Managing
Profitable Customer
Relationships
C h ap te r 1

2. Objectives
• Be ab le to d e fine m arke ting
and d is cu s s its core conce p ts .
• Be ab le to d e fine m arke ting
m anage m e nt and com p are th e
five m arke ting m anage m e nt
orie ntations .
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3. Objectives
• U nd e rs tand cu s tom e r
re lations h ip m anage m e nt
and s trate gie s .
• R e alize th e m aj ch alle nge s
or
facing m arke te rs in th e ne w
“conne cte d ” m ille nniu m .
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4. Case Study
A mazon.com
• S trong s ales , no • Provides great
profits s election, good
• C us tomer-driven value,
to its core dis covery and
• E ach cus tomer’s convenience
experience is • A true online
unique Will Amazon.com S urvive?
Dis cus s ion: community
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5. What is Marketing?
• M arke ting is m anaging p rofitab le
cu s tom e r re lations h ip s
 A ttracting new cus tomers
 Retaining and growing current
cus tomers
• “M arke ting” is N O T s ynonym ou s
with “s ale s ” or “ad ve rtis ing”
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6. What is Marketing?
• Kotle r’s s ocial d e finition:
“ Marketing is a s oc ial and
managerial proces s by whic h
individuals and groups obtain
what they need and want
through creating and
exchanging produc ts and
value with others .”
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7. What is Marketing?
Many Things C an B e Marketed!
• G ood s • P lace s
• S e rvice s • P rop e rtie s
• E xp e rie nce s • O rganizations
• E ve nts • Inform ation
• P e rs ons • Id e as
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8. What is Marketing?
C ore Marketing C oncepts
• Needs , wants , • Value and
and demands s atis faction
• Marketing • E xchange,
offers : trans actions
including
and
products ,
s ervices and relations hips
experiences • Markets 1-8

9. Marketing Management
• Marketing manag ement is “th e
art and s cie nce of ch oos ing targe t
m arke ts and b u ild ing p rofitab le
re lations h ip s with th e m .”
 C reating, delivering and
communicating s uperior cus tomer
value is key.
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10. Marketing Management
• C u s tom e r M anage m e nt:
 Marketers s elect cus tomers that
can be s erved well and
profitably.
• D e m and M anage m e nt:
 Marketers mus t deal with
different demand s tates ranging
from no demand to too much
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11. Marketing Management
Marketing Management
Management Orientations
• Production • S elling
concept conc ept
• Product • Marketing
concept conc ept
• S ocietal marketing conc ept
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12. CRM
• CRM – Cus tomer
relations hip
manag ement . . .
“is th e ove rall p roce s s of b u ild ing
and m aintaining p rofitab le
cu s tom e r re lations h ip s b y
d e live ring s u p e rior cu s tom e r
valu e and s atis faction.” 1 - 12

13. CRM
• It cos ts 5 to 1 0 tim e s M O R E
to attract a ne w cu s tom e r th an
it d oe s to ke e p a cu rre nt
cu s tom e r s atis fie d .
• M arke te rs m u s t b e conce rne d
with th e life tim e valu e of th e
cu s tom e r.
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14. CRM
• C u s tom e r valu e / atis faction
s
Key C oncepts  P e rce p tions are ke y
 M e e ting/ xce e d ing
e
e xp e ctations cre ate s
• Attracting, s atis faction
• Loyalty and re te ntion
re taining and  Be ne fits of loyalty
growing  Loyalty incre as e s as
custom e rs s atis faction le ve ls incre as e
 D e ligh ting cons u m e rs
• B uil ing custom e r
d s h ou ld b e th e goal
• G rowing s h are of cu s tom e r
re lationship s and  C ros s -s e lling
custom e r e quity
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15. CRM
• C u s tom e r e qu ity
Key C oncepts  Th e total com b ine d
cu s tom e r life tim e
• Attracting, valu e s of all
re taining and cu s tom e rs .
growing  M e as u re s a firm ’s
custom e rs p e rform ance , b u t in
a m anne r th at looks
• B uil ing custom e r
d to th e fu tu re .
re lationship s and
custom e r e quity
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16. CRM
• C u s tom e r re lations h ip
Key C oncepts le ve ls and tools
 Targe t m arke t typ ically
• Attracting, d ictate s typ e of
re lations h ip
re taining and  B asic re l
ationship s
growing  F ul re l
l ationship s
 C u s tom e r loyalty and
custom e rs re te ntion p rogram s
• B uil ing custom e r
d  Ad d ing financial b e ne fits
 Ad d ing social b e ne fits
re lationship s and  Ad d ing structural tie s
custom e r e quity
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17. Marketing Challenges
• Te ch nological ad vance s , rap id
glob alization, and continu ing s ocial
and e conom ic s h ifts are cau s ing
m arke tp lace ch ange s .
• M aj m arke ting d e ve lop m e nts
or
can b e grou p e d u nd e r th e th e m e
of Connecting .
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18. Marketing Challenges
C onnecting • Ad vance s in com p u te rs ,
te le com m u nications ,
vid e o-confe re ncing, e tc.
• V ia te chnology are m aj force s .
or
 D atab as e s allow for
• With custom e rs cu s tom ization of
p rod u cts , m e s s age s
• With m arke ting
and analys is of ne e d s .
• Th e Inte rne t
p artne rs  F acilitate s anytim e ,
anywh e re conne ctions
• With the world  F acilitate s C R M
 C re ate s m arke ts p ace s
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19. Marketing Challenges
C onnecting • S e le ctive re lations h ip
m anage m e nt is ke y.
 C u s tom e r p rofitab ility
• V ia te chnology analys is s e p arate s
winne rs from los e rs .
• With custom e rs • G rowing “s h are of
• With m arke ting cu s tom e r”
 C ros s -s e lling and u p -
p artne rs s e lling are h e lp fu l.
• With the world • D ire ct s ale s to
b u ye rs are growing.
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20. Marketing Challenges
C onnecting • P artne r re lations h ip
m anage m e nt
• V ia te chnology involve s :
 C onne cting ins id e
• With custom e rs th e com p any
 C onne cting with
• With m arke ting ou ts id e p artne rs
p artne rs  S up p l
y chain
m anage m e nt
• With the world  S trate gic aliance s
l
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21. Marketing Challenges
• G lob alization
C onnecting  C om p e tition
 N e w op p ortu nitie s
• V ia te chnology • G re ate r conce rn for
• With custom e rs
e nvironm e ntal and
s ocial re s p ons ib ility
• With m arke ting • Incre as e d m arke ting
p artne rs b y nonp rofit and
p u b lic-s e ctor e ntitie s
• With the world  S ocial m arke ting
cam p aigns
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