Lecture Principles of Marketing - Chapter 1: Marketing - Managing profitable customer relationships

This chapter define marketing and the marketing process, explain the importance of understanding customers and identify the five core marketplace concepts, identify the elements of a customer-driven marketing strategy and discuss the marketing management orientations, discuss customer relationship management and creating value for and capturing value from customers, describe the major trends and forces changing the marketing landscape.

Chapter One

Marketing: Managing Profitable

Customer Relationships

Roadmap: Previewing the Concepts

1 Define marketing and the marketing

process.

2 Explain the importance of understanding

customers and identify the five core

marketplace concepts

3 Identify the elements of a customer-driven

marketing strategy and discuss the

marketing management orientations.

4 Discuss customer relationship management

and creating value for and capturing value from customers.

5 Describe the major trends and forces

changing the marketing landscape.

fans via content.

 Success has been

 Fans are young, affluent, and family oriented,

spending nearly $700 annually on NASCAR merchandise.

 Fans are loyal to sport

and NASCAR fans are 3

times as likely to seek out sponsors’ products than

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.

The Marketing Process

 A simple model of the marketing process:

– Understand the marketplace and customer needs

and wants.

– Design a customer-driven marketing strategy.

– Construct a marketing program that delivers

superior value.

– Build profitable relationships and create customer

delight.

– Capture value from customers to create profits

and customer quality.

Needs, Wants, & Demands

 Need:

State of felt deprivation including

physical, social, and individual needs.

Needs, Wants, & Demands

 Wants:

Form that a human need takes, as

shaped by culture and individual

personality.

 Wants + Buying Power = Demand

Need / Want Fulfillment

 Needs and wants are fulfilled through a

Marketing Offer:

– Some combination of products, services,

information, or experiences offered to a

market to satisfy a need

or want.

Need / Want Satisfiers

does not result in ownership.

 Brand Experiences:

“ dazzle their senses, touch their hearts, stimulate their minds.”

Marketing Myopia

 Marketing myopia occurs when 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.”

Value & Satisfaction

 Care must be taken when setting

– One party gives

X to another party and gets Y

in return Can include cash,

Modern Marketing Systems

 Main elements in a modern marketing system include:

Marketing Management

 The art and science of choosing target markets and building profitable

relationships with them.

– Requires that consumers and the

marketplace be fully understood

Marketing Management

 Designing a winning marketing

strategy requires answers to the

following questions:

1 What customers will we serve?

What is our target market?

2. How can we best serve these

customers?

What is our value proposition?

Segmentation & Target Marketing

Value Proposition

 The set of benefits or values a

company promises to deliver to

consumers to satisfy their needs.

– Value propositions dictate how firms will

differentiate and position their brands in the marketplace.

Marketing Management Philosophies

The Marketing Plan

 Transforms the marketing strategy into action

 Includes the marketing mix and 4 P’s of marketing:

– Product

– Price

– Place (Distribution)

– Promotion

Customer Relationship Management

 The overall process of building and

maintaining profitable customer

relationships by delivering superior

customer value and satisfaction.

– Acquiring customers

– Keeping customers

– Growing customers

Customer Perceived Value

 Customer’s evaluation of the difference between all of the benefits and all of

the costs of a marketing offer relative

to those of competing offers.

 Focus is on relating directly to

profitable customers, for the longterm.

Partner Relationship Marketing

 Marketing partners help create customer

value and assist in building customer

relationships.

 Partners inside the firm:

– All employees customer focused

– Teams coordinate efforts toward customers

 Partners outside the firm:

– Supply chain management

Customer Loyalty & Retention

– The share a

company gets

of the customers purchasing in

their product categories.

Customer Equity

 The combined discounted customer lifetime values of all the company’s current and potential customers.

– Classify customers by loyalty and

potential profitability

– Manage accordingly

The New Digital Age

 Technology impacts the ways firms bring

value to their customers.

 Greater connectivity means greater access to information, faster travel and communication.

 The Internet allows anytime, anywhere

connections between firms and customers.

– “Click-and-mortar” companies

– “Click-only” companies

– Business-to-business e-commerce

New Marketing Landscape

Rest Stop: Reviewing the Concepts

1 Define marketing and the marketing

process.

2 Explain the importance of understanding

customers and identify the five core

marketplace concepts

3 Identify the elements of a customer-driven

marketing strategy and discuss the

marketing management orientations.

4 Discuss customer relationship

management and creating value for and

capturing value from customers.

5 Describe the major trends and forces

changing the marketing landscape.