Transcript Chapter 1 - Marketing: Managing Profitable Customer

Chapter1
Marketing:
Managing Profitable
Customer
Relationships
Copyright © 2008 Pearson Education Canada
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Define marketing and outline 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.
Discuss customer relationship management and
identify strategies for creating and capturing value
from customers.
Describe the major trends and forces changing the
marketing landscape.
Copyright © 2008 Pearson Education Canada
1-2
Principles of Marketing, Seventh Canadian Edition
NASCAR –What is their secret?
• NASCAR is the #1
televised motorsport in
Canada
• Compelling blend of live
racing events, media
coverage and Web sites
• Show the customer a
good time
• To develop customer
relationship NASCAR
creates a wholesome
family-oriented
environment.
Copyright © 2008 Pearson Education Canada
• Fans are passionate about
NASCAR
• Fans spend nearly $700 a
year on NASCAR
merchandise
• Second highest regular
season sport on TV
• NASCAR attracts over
250 big-name sponsors
• Big part of the NASCA
experience is the feeling
of accessibility
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Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Define marketing and outline 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.
Discuss customer relationship management and
identify strategies for creating and capturing value
from customers.
Describe the major trends and forces changing the
marketing landscape.
Copyright © 2008 Pearson Education Canada
1-4
Principles of Marketing, Seventh Canadian Edition
What is Marketing?
• Marketing is about managing profitable
customer relationships
– Attracting new customers
– Retaining and growing current customers
• Marketing Defined:
– “Marketing is a social and managerial process by
which individuals and groups obtain what they need
and want through creating and exchanging value
with others”
Copyright © 2008 Pearson Education Canada
1-5
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Define marketing and outline 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.
Discuss customer relationship management and
identify strategies for creating and capturing value
from customers.
Describe the major trends and forces changing the
marketing landscape.
Copyright © 2008 Pearson Education Canada
1-6
Principles of Marketing, Seventh Canadian Edition
Understanding the
Marketplace
• Core Concepts
• Need
– Understand the marketplace
and customer wants and
needs
– 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
Copyright © 2008 Pearson Education Canada
– State of felt deprivation
• Wants
– The form of needs as shaped
by culture and the
individual
• Demands
– Wants which are backed by
buying power
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Principles of Marketing, Seventh Canadian Edition
Understanding the
Marketplace
• Core Concepts
• Marketing offer
– Understand the marketplace
and customer wants and
needs (cont.)
– 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
Copyright © 2008 Pearson Education Canada
– Combination of
products, services,
information or
experiences that
satisfy a need or
want
– Offer may include
services, activities,
people, places,
information or
ideas
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Principles of Marketing, Seventh Canadian Edition
Understanding the
Marketplace
• Core Concepts
• Value
– Understand the marketplace
and customer wants and
needs (cont.)
– 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
Copyright © 2008 Pearson Education Canada
–Customers form
expectations regarding
value
–Marketers must deliver
value to consumers
• Satisfaction
–A satisfied customer will
buy again and tell others
about their good
experience
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Principles of Marketing, Seventh Canadian Edition
Discussion Questions Customer
Satisfaction
• When have you,
personally, been
extremely satisfied or
dissatisfied with a
product? Why?
• Why is it so difficult
for companies to
deliver value to
consumers?
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Understanding the
Marketplace
• Core Concepts
• Exchange
– Understand the marketplace
and customer wants and
needs (cont.)
– 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
Copyright © 2008 Pearson Education Canada
– The act of obtaining a
desired object from
someone by offering
something in return
– One exchange is not the
goal, relationships with
several exchanges are the
goal
– Relationships are built
through delivering value
and satisfaction
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Principles of Marketing, Seventh Canadian Edition
Understanding the
Marketplace
• Core Concepts
• Market
– Understand the marketplace
and customer wants and
needs (cont.)
– 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
Copyright © 2008 Pearson Education Canada
– Set of actual and
potential buyers of a
product
– Marketers seek buyers
that are profitable
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Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Define marketing and outline 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.
Discuss customer relationship management and
identify strategies for creating and capturing value
from customers.
Describe the major trends and forces changing the
marketing landscape.
Copyright © 2008 Pearson Education Canada
1-13
Principles of Marketing, Seventh Canadian Edition
Designing a Customer-Driven
Marketing Strategy
• Marketing management is “the art and
science of choosing target markets and
building profitable relationships with
them.”
• A winning marketing strategy
– What customers will we serve?
– How can we serve these customers best?
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Designing a Customer-Driven
Marketing Strategy
• What customers will we serve?
– Market segmentation and target marketing
– Marketers select customers that can be served
profitably
– Known as customer management and demand
management
• How can we serve these customers best?
– By defining a value proposition that will differentiate
and position the brand in the marketplace
– Is set of benefits or values a company promises to
deliver to consumers in order to satisfy their needs
Copyright © 2008 Pearson Education Canada
1-15
Principles of Marketing, Seventh Canadian Edition
Netflix – DVDs by mail
• Netflix began in early 2000
• DVDs are delivered to your home with return
mail envelope
• Monthly charge with unlimited rentals – limited
amount out at one time
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Discussion Questions
Netflix
1.
2.
3.
4.
How might Netflix
define its target market?
What need or want does
it fulfill?
What is its marketing
offer?
What is its value
proposition? Is it a
strong value
proposition for its target
market?
Copyright © 2008 Pearson Education Canada
1-17
Principles of Marketing, Seventh Canadian Edition
Marketing Management
Orientations
• The Production Concept
– Consumers will favour products that are
available and highly affordable
• The Product Concept
– Consumers will favour products that offer the
most in quality, performance, and innovative
features
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Marketing Management
Orientations
• The Selling Concept
– Consumers will not buy enough of the firm’s
products unless it undertakes a large-scale
selling effort.
• The Marketing Concept
– Achieving organizational goals depends on
knowing the needs and wants of target
markets and delivering the desired
satisfactions better than competitors do.
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Marketing Management
Orientations
• The Societal Marketing Concept
– The marketing strategy should deliver value
to customers and other stakeholders affected
by marketing decisions in a way that
maintains or improves the consumer’s and
the society’s well-being.
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Preparing a Marketing Plan
and Program
• Build customer relationships by
transforming the marketing strategy into
action
• Includes the marketing mix and the 4P’s of
marketing
–
–
–
–
Product
Price
Place
Promotion
Copyright © 2008 Pearson Education Canada
1-21
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Define marketing and outline 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.
Discuss customer relationship management and
identify strategies for creating and capturing value
from customers.
Describe the major trends and forces changing the
marketing landscape.
Copyright © 2008 Pearson Education Canada
1-22
Principles of Marketing, Seventh Canadian Edition
Building Customer
Relationships
• CRM – Customer relationship
management . . .
“is the overall process of building and
maintaining profitable customer
relationships by delivering superior
customer value and satisfaction. It deals
with all aspects of acquiring, keeping and
growing customers.”
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Relationship Building Blocks:
Value and Satisfaction
• Customer Perceived Value
– The customers’ evaluation of the difference
between benefits and costs.
– Customers often do not judge values and
costs accurately or objectively.
• Customer Satisfaction
– Product’s perceived performance relative to
customers’ expectations.
Copyright © 2008 Pearson Education Canada
1-24
Principles of Marketing, Seventh Canadian Edition
Customer Relationship
Levels and Tools
• Basic relationships
– low margin customers
• Full partnerships
– key customers
• Frequency marketing programs
– Reward customers who buy frequently or in large
amounts
• Club marketing programs
– Offer members special discounts and create member
communities
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
The Changing Nature of Customer
Relationships
• Relating with more Carefully Selected
Customers
• Relating for the Long-Term
• Relating Directly
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Partnership Relationship
Management
• Working closely with partners in other
company departments and outside the
company to jointly bring greater value to
customers
• Partners Inside the Company
• Partners Outside the Firm
– Strategic partners
– Supply chain management
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Capturing Value from Customers
• Creating Customer Loyalty and Retention
– Customer delight leads to emotional
relationships and loyalty
– Customer lifetime value shows true worth of
a customer
• Growing Share of Customer
– Share of customer’s purchase in a product
category
– Achieved through offering greater variety,
cross-sell and up-sell strategies
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Capturing Value from Customers
• Building Customer Equity
– The combined customer lifetime values of all
current and potential customers
– Measures a firm’s performance, but in a
manner that looks to the future
– Choosing the “best” customers is key
Copyright © 2008 Pearson Education Canada
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Principles of Marketing, Seventh Canadian Edition
Capturing Value from Customers
• The company can classify customers
according to their potential profitability
and manage its relationships accordingly.
Copyright © 2008 Pearson Education Canada
1-30
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Define marketing and outline 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.
Discuss customer relationship management and
identify strategies for creating and capturing value
from customers.
Describe the major trends and forces changing the
marketing landscape.
Copyright © 2008 Pearson Education Canada
1-31
Principles of Marketing, Seventh Canadian Edition
The New Marketing Landscape
• Challenges
• Advances in
computers,
telecommunications
information,
transportation
– The Digital Age
– Rapid Globalization
– Ethics and Social
responsibility
– Not-for-profit Marketing
Copyright © 2008 Pearson Education Canada
– Customer research and
tracking
– Product development
– Distribution
– New advertising tools
– 24/7 marketing through the
Internet
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Principles of Marketing, Seventh Canadian Edition
The New Marketing Landscape
• Challenges
• Geographical and
cultural distances
have shrunk
– The Digital Age
– Rapid Globalization
– Ethics and Social
responsibility
– Not-for-profit Marketing
Copyright © 2008 Pearson Education Canada
– Greater market
coverage
– More options for
purchasing and
manufacturing
– Increased competition
from foreign
competitors
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Principles of Marketing, Seventh Canadian Edition
The New Marketing Landscape
• Challenges
• Marketers need to
take great
responsibility for the
impact of their actions
– The Digital Age
– Rapid Globalization
– Ethics and Social
responsibility
– Not-for-profit Marketing
Copyright © 2008 Pearson Education Canada
– Caring capitalism is a way
to differentiate your
company
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Principles of Marketing, Seventh Canadian Edition
The New Marketing Landscape
• Challenges
• Many non-profit
organizations are
realizing the
importance of
strategic marketing
– The Digital Age
– Rapid Globalization
– Ethics and Social
responsibility
– Not-for-profit Marketing
Copyright © 2008 Pearson Education Canada
–
–
–
–
–
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Performing arts
Government agencies
Colleges
Hospitals
Churches
Principles of Marketing, Seventh Canadian Edition
What is Marketing?
• The process of building profitable
customer relationships by creating value
for customers and capturing value in
return
Copyright © 2008 Pearson Education Canada
1-36
Principles of Marketing, Seventh Canadian Edition
Learning Goals
1.
2.
3.
4.
5.
Define marketing and outline 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.
Discuss customer relationship management and
identify strategies for creating and capturing value
from customers.
Describe the major trends and forces changing the
marketing landscape.
Copyright © 2008 Pearson Education Canada
1-37
Principles of Marketing, Seventh Canadian Edition