This document provides an overview of key concepts in marketing, including: 1. It defines marketing as managing profitable customer relationships by attracting new customers and retaining current customers through delivering satisfaction. 2. It outlines the marketing process and explains the importance of understanding customers and the marketplace using concepts like needs, wants, demands, products, value, satisfaction, exchange and relationships. 3. It discusses marketing management orientations like the production, product, selling, and marketing concepts and identifies the marketing mix of product, place, promotion, and price as elements of a customer-driven marketing strategy. 4. It describes customer relationship management and strategies for building lasting relationships like lifetime customer value and share of customer.

1. An Overview of Marketing: Managing Profitable Customer Relationships Chapter 1

2. Learning Objectives: Define marketing Outline the steps in the marketing process. Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts. Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Discuss customer relationship management and strategies for building lasting customer relationships. Describe the major trends and forces that are changing the marketing landscape in this new age of relationships.

3. What is Marketing? Simple Definition: Marketing is managing profitable customer relationships. Goals: Attract new customers by promising superior value. Keep and grow current customers by delivering satisfaction.

4. Needs, wants, and demands Products and services Value, satisfaction, and quality Exchange, transactions, and relationships Markets Core Marketing Concepts

5. Marketing Defined A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.

6. Marketing Defined Process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. Simply put: Marketing is the delivery of customer satisfaction at a profit.

7. Needs, Wants, & Demands Need: State of felt deprivation including physical, social, and individual needs. Physical need: Food, clothing, shelter, safety Social need: Belonging, affection Individual need: Learning, knowledge, self-expression

8. Wants: Form that a human need takes, as shaped by culture and individual personality. Wants + Buying Power = Demand Needs, Wants, & Demands

9. 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.

10. 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.

11. Products Anything that can be Offered to a Market to Satisfy a Need or Want What Will Satisfy Consumer’s Needs and Wants? Services Activities or Benefits Offered for Sale That Are Essentially Intangible and Don’t Result in the Ownership of Anything Experiences Persons Places Organizations Ideas Information

12. 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”

13. Value & Satisfaction If performance is lower than expectations, satisfaction is low If performance is higher than expectations, satisfaction is high

14. How Do Consumers Choose Among Products and Services? Total Quality Management Involves Improving the Quality of Products, Services, and Marketing Processes Product’s Perceived Performance in Delivering Value Relative to Buyer’s Expectations is Customer Satisfaction Value Gained From Owning a Product and Costs of Obtaining the Product is Customer Value

15. 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.

16. Exchanges Transactions Relationships Building a Marketing Network Consisting of The Company and All Its Supporting Stakeholders How Do Consumers Obtain Products and Services?

17. 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.

18. Who Purchases Products and Services? Unexpected Situational Factors Attitudes of Others Ethical Potential Buyers Market – Buyers who share a particular need or want that can be satisfied through exchange or relationships. Actual Buyers People Who Exhibit Need Resources to Exchange Willingness to Exchange

19. Marketing Management The art and science of choosing target markets and building profitable relationships with them.

20. Marketing Management Implementing programs to create exchanges with target buyers to achieve organizational goals Demand Management Finding and increasing demand, also changing or reducing demand such as in Demarketing Profitable Customer Relationships Attracting new customers and retaining and building relationships with current customers Marketing Management

21. Marketing Management Demand Management Finding and increasing demand, also changing or reducing demand, such as in demarketing. Demarketing Temporarily or permanently reducing the number of customers or shifting their demand

22. Marketing Management Questions to ask: What customers will we serve? What is our target market? How can we best serve these customers? What is our value proposition?

23. Segmentation & Target Marketing Market Segmentation: Divide the market into segments of customers Target Marketing: Select the segment to cultivate

24. Value Proposition The set of benefits or values a company promises to deliver to consumers to satisfy their needs.

25. Marketing Management Philosophies Production Concept Product Concept Selling Concept Marketing Concept Societal Marketing Concept

26. Production Concept Product Concept Selling Concept Marketing Concept Societal Marketing Concept Consumers favor products that are available and highly affordable. Improve production and distribution. Consumers favor products that offer the most quality, performance, and innovative features. Consumers will buy products only if the company promotes/ sells these products. Focuses on needs/ wants of target markets & delivering satisfaction better than competitors. Focuses on needs/ wants of target markets & delivering superior value. Marketing Management Philosophies

27. The Marketing Mix C

28. The Marketing Mix Product Place Promotion Price C

29. Strategic Decision Areas Product Place Promotion Price Objectives Physical Chars. Prod. Class Service Features Benefits Quality Accessories Installation Instructions Warranty Product Line(s) Packaging Branding NPD? &/or Elimination? PLC Implics. Objectives Channel type Market Exposure Kinds of Intermediaries Kinds and locations of Outlets How to handle transporting and storing Service levels Recruiting Intermediaries Managing Channels Channel Co-op (Not Conflict) is Goal – Who Has Power? Objectives Initial Pricing -Penentration -Skimming -Combo P Flexibility P Sensitivity P Level over PLC Geographic terms Discounts Allowances Legal Implics. Factors Infl. Basic P Det. Objectives Promotion Mix Salespeople Kind Number Selection Training Motivation Evaluation Advertising Targets Kinds of ads Media type Copy thrust Prepared by whom Sales promotion PR Publicity

30. Examples of Basic Channels of Distribution for Consumer Products Manufacturer or producer AOL Nissan Del Monte Procter & Gamble Retailer Consumer Wholesaler Retailer Retailer Wholesaler Wholesaler

31. Controllable Promo. Elements of the Marketing Mix Personal Selling Advertising Public Relations Advertising Publicity Personal Selling Promotion Sales Promotion

32. Price Elements of the Marketing Mix Price Flexibility Price Changes Over the Life Cycle Pricing Objectives Price Setting Price of Other Products In the Line Pricing Objectives Discounts and Allowances Geographic Pricing Terms Legal Environment Cost and Demand Competition and Substitutes Price Sensitivity Price Flexibility Price Changes Over the Life Cycle Discounts and Allowances Geog. Pricing Terms Legal Environ’t Cost and Demand Competition and Substitutes Price Sensitivity

33. All Four Ps Contribute to the Whole Selection of Target Market Understanding the Target Market Leads to Good Strategies! Product Place Promo-tion Price

34. Customer Relationship Management The process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

35. Partner Relationship Marketing Partners inside the firm All employees customer focused Teams coordinate efforts toward customers Partners outside the firm Supply chain management Strategic alliances

36. 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.

37. Customer Equity Customer equity is the total combined customer lifetime values of all the company’s customers.

38. Rest Stop: Reviewing 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. Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Discuss customer relationship management and strategies for building lasting customer relationships.

39. TO BE CONTINUE…