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 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 Prentice Hall, Inc Copyright 2007 1-2 Case Study NASCAR – What is its secret? Creating Value  NASCAR sells the experience – in-car cameras, wholesome family orientation  NASCAR.com engages fans via content  Success has been achieved by creating lasting customer relationships Capturing Value  NASCAR is the 2nd highest rated sport on TV  Fans are young, affluent, and family oriented, spending nearly $700 annually on NASCAR merchandise  Fans are loyal to sport and NASCAR fans are times as likely to seek out sponsors’ products than are nonfans 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 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 OLD View of Marketing: Making a Sale – “Telling & Selling” NEW New View View of ofMarketing: Marketing: Satisfying Satisfying Customer customerNeeds needs 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 – Physical needs: • Food, clothing, shelter, safety – Social needs: • Belonging, affection – Individual needs: • Learning, knowledge, self-expression 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  Products: – Persons – Places – Organizations – Information – Ideas  Services – Activity or benefit offered for sale that is essentially intangible and does not result in ownership  Brand Experiences: “ dazzle their senses, touch their hearts, stimulate their minds.” Segmentation & Target Marketing  Market Segmentation: – Divide the market into segments of customers  Target Marketing: – Select the segment to cultivate Marketing Management  Demand Management – Finding and increasing demand, also changing or reducing demand, as in demarketing  Demarketing – Temporarily or permanently reducing the number of customers or shifting their demand 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      Production Concept Product Concept Selling Concept Marketing Concept Societal Marketing Concept The Marketing Plan  Transforms the marketing strategy into action  Includes the marketing mix and 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 Customer Satisfaction  Dependent on the product’s perceived performance relative to a buyer’s expectations – Customer satisfaction often leads to consumer loyalty – Some firms seek to DELIGHT customers by exceeding expectations Customer Relationships  Loyalty and retention programs build relationships and may feature: – Financial Benefits • EX: Frequency marketing programs – Social Benefits • EX: Club marketing programs – Structural Ties  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 – Strategic alliances 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 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     Rapid Globalization Ethics and Social Responsibility Not-for-Profit Marketing New World of Marketing Relationships Rest Stop: Reviewing the Concepts 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 Prentice Hall, Inc Copyright 2007 1-32 ... View View of ofMarketing: Marketing: Satisfying Satisfying Customer customerNeeds needs The Marketing Process  A simple model of the marketing process: – Understand the marketplace and customer. .. nonfans 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... 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