1 Principles of Marketing Marketing: Managing Profitable

1 Principles of Marketing Marketing: Managing Profitable Customer Relationships

What Is Marketing? Marketing Defined Marketing is the process by which companies create value for customers and build strong customer relationships to capture value from customers in return 1-4

The Marketing Process Create Value Company Capture Value Build Strong relations

What Is Marketing? The Marketing Process 1. 2. 3. 4. 5. Understand the marketplace and customer wants and needs Design a customer-driven marketing strategy Construct a marketing plan that delivers superior value Build profitable relationships and create customer satisfaction Capture value from customers to create profit and customer equity 1-5

Understanding the Marketplace and Customer Needs Customer Needs, Wants, and Demands Needs are states of deprivation Physical—food, clothing, warmth, safety Social—belonging and affection Individual—knowledge and selfexpression 1-6

Understanding the Marketplace and Customer Needs Customer Needs, Wants, and Demands Wants are the form that needs take as they are shaped by culture and individual personality Demands are wants with by buying power 1-7

Understanding the Marketplace and Customer Needs Market Offerings—Products, Services, and Experiences Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want 1-8

Understanding the Marketplace and Customer Needs Market Offerings—Products, Services, and Experiences Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs Exchange is the act of obtaining a desired object from someone by offering something in return 1-9

Understanding the Marketplace and Customer Needs Customer Value and Satisfaction How do customers choose which product to buy? They form expectations about value and satisfaction Satisfied customers tell others Dissatisfied switch to competitors and discourage others from buying it 1-10

Understanding the Marketplace and Customer Needs Exchanges and Relationships Markets are the set of actual and potential buyers of a product who have a particular need or want Relationships consist of actions to build and maintain desirable relationships 1-11

Designing a Customer-Driven Marketing Strategy Marketing Management Marketing management is the art and science of choosing target markets and building profitable relationships with them What customers will we serve? How can we best serve these customers? 1-13

Designing a Customer-Driven Marketing Strategy Selecting Customers to Serve Market segmentation: Dividing the markets into segments of customers Target marketing: Which segments to go after 1-14

Designing a Customer-Driven Marketing Strategy Choosing a Value Proposition Why should I buy your brand rather than your competitors? How it will differentiate and position itself? The value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needs (‘Redbull gives winds’, ‘BMW The ultimate driving machine’) 1-17

Designing a Customer-Driven Marketing Strategy Marketing Management Orientations There are five alternative concepts under which org. design and carry out their marketing strategies Production concept Product concept Selling concept Marketing concept Societal concept 1-18

Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Production concept is the idea that consumers will favor products that are available or highly affordable 1-19

Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Product concept is the idea that consumers will favor products that offer the most quality, performance, and features for which the organization should therefore devote its energy to making continuous improvements 1-20

Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Selling concept is the idea that consumers will not buy enough of the firm’s products unless it undertakes a large scale selling and promotion effort 1-21

Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Marketing concept is the idea that achieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do 1-22

Designing a Customer-Driven Marketing Strategy Marketing Management Orientations Societal marketing concept is the idea that a company should make good marketing decisions by considering consumers’ wants, the company’s requirements, consumers’ long-term interests, and society’s long-run interests (e.g. Re-cycling, smoking packs with labels, unleaded petrol). 1-23

Preparing an Integrated Marketing Plan and Program Marketing Mix The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing strategy Product Price Promotion Place 1-24

Building Customer Relationships Customer Relationship Management (CRM) Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior value and satisfaction 1-26

Building Customer Relationships Customer Perceived value is the difference between total customer value and total customer cost. Customer Satisfaction is the extent to which a product’s perceived performance matches a buyer's expectations.

Building Customer Relationships Partner Relationship Management Partner Relationship Management: refers to working closely with partners in other company departments and outside the company to jointly bring greater value to customers 1-36

The New Marketing Landscape Major Developments Digital age Globalization Ethics and social responsibility Not-for-profit marketing 1-37

The New Marketing Landscape The New Digital Age Recent technology has had a major impact on the ways marketers connect with and bring value to their customers Market research Learning about and tracking customers Production Distribution Communication Video conferencing Online data services 1-38

The New Marketing Landscape The New Digital Age Internet—creates marketplaces Information Entertainment Communication 1-39

The New Marketing Landscape Rapid Globalization The world is smaller – unified market Think globally, act locally Standardization of products, services, communications in the global markets 1-40

The New Marketing Landscape The Call for More Ethics and Social Responsibility Social marketing campaigns encourage energy conservation and concern for the environment or discourage smoking, excessive drinking, and drug use 1-42

The New Marketing Landscape The Growth for Not-for-Profit Marketing Colleges Hospitals Museums Zoos Orchestras 1-43