Transcript Developing Customer Relationships and Value

MKTG 301
Principles of
Marketing
CHAPTER
DEVELOPING
CUSTOMER
RELATIONSHIPS AND
VALUE THROUGH
MARKETING
AFTER READING THIS CHAPTER
YOU SHOULD BE ABLE TO:
• Define marketing and explain the
importance of (1) discovering and
(2) satisfying consumer needs and
wants.
• Distinguish between marketing mix
elements and environmental factors.
AFTER READING THIS CHAPTER
YOU SHOULD BE ABLE TO:
• Understand how organizations build
strong customer relationships using
current thinking about customer value
and relationship marketing.
• Describe how today’s market orientation
differs from prior eras oriented to
production and selling.
AFTER READING THIS CHAPTER
YOU SHOULD BE ABLE TO:
• Understand the meaning of ethics and
social responsibility and how they relate
to the individual, organizations, and
society.
• Know what is required for marketing to
occur and how it creates customer
value and utilities for customers.
Would you sell more 43-inch
Hitachi Big Screen HDTV
monitors for $ 1799 or $499
each?
WHAT IS MARKETING?
• Being a Marketing Expert:
Good News-Bad News
• The Good News: You Already Have
Marketing Experience
• The Bad News: Surprises About
the Obvious
How would you
define
marketing ?
Marketing
Marketing is the process of planning and
executing the conception, pricing,
promotion, and distribution of ideas,
goods, and services to create exchanges
that satisfy individual and organizational
objectives.
Products
and
Services
Needs, wants,
and demands
Core
Marketing
Concepts
Markets
Value, satisfaction,
and quality
Exchange, transactions,
and relationships
WHAT IS MARKETING?
• Marketing: Using Exchanges to
Satisfy Needs
• The Diverse Factors Influencing
Marketing Activities
EXCHANGE
Exchange
Exchange is the trade of things of value
between buyer and seller so that each is
better off after the trade.
FIGURE 1-3 An organization’s marketing department
relates to many people, groups, and forces
The Organization
Society
Alliances
Other
Organizations
Research
and
Development
Manufacturing
Society
Ownership
Human
Resources
Management
Information
Systems
Partnerships
Relationships
Suppliers
Finance
Environmental
Social
Shareholders
(owners)
Economic
Marketing
Customers
Forces
Technological
Competitive
Regulatory
Requirement for Marketing to
Occur
•
•
•
•
Two or More Parties with Unsatisfied Needs
Desire and Ability to Satisfy These Needs
A Way for the Parties to Communicate
Something to Exchange
HOW MARKETING DISCOVERS AND
SATISFIES CONSUMER NEEDS
• Discovering Consumer Needs
• The Challenge of Launching Winning
New Products
• Consumer Needs and Consumer Wants
• What a Market Is
How many new
products are
launched each year
in US?
What percentage
succeed in the long
run ?
1. Make sure to focus on what the
customer benefit is?
2. Learn key lessons from the past
Marketing’s first task:
discovering consumer needs and wants
Organization’s
marketing department
Discover consumer needs and wants
What Motivates a Consumer
to Take Action?
• Needs - states of felt
deprivation including physical
needs for food, social needs
for belonging and individual
needs for self-expression.
i.e. I am thirsty.
What Motivates a Consumer
to Take Action?
• Wants - form that a human need
takes as shaped by culture and
individual personality. i.e. I want a
Cola.
Wants- Is it enough?
Popularity is NOT the objective
Don’t want virtual consumption- the
phenomenon that occurs when
consumer love your products but
don’t feel a need to buy it…..
What Motivates a Consumer
to Take Action?
• Demands - human wants backed by
buying power. i.e. I have money to
buy a Coca-Cola.
What is
Market ?
What is a Market?
Potential consumers make up a market,
which is:
1.people
2.with the desire and
3.with the ability to buy a specific product.
Target Market
One or more specific groups of potential
customers toward which an organization
directs its marketing program.
Marketing’s first task:
discovering consumer needs and
wants
Organization’s
marketing department
Discover consumer needs and wants
Information about needs and wants
Potential consumers: The market
Do you know too much about
your consumer?
Marketers have always watch consumers
asked questions, but what most marketer
don’t do is watch consumer CLOSELY
enough
If you ignore a single bit of
potentially valuable information
about consumers you are wasting
money.
What should you know about your
customers.
• Who buys our product or service?
• Who initiates and makes the decision to purchase and who
influences the process?
• How is the purchase decision made?
• What attributes or criteria are important to customers?
• What are customers’ perceptions of and attitudes
toward our company, product/service or brands?
• What factors influence the decision making process?
• Contact points where customers can be reached?
Marketing’s second task: Satisfying
consumer needs
Organization’s marketing department
Discover consumer
needs
Satisfy consumer needs
Find the right combination of:
• Product
• Price
• Promotion
• Place
Information about needs
Goods, services, ideas
Potential consumers: The market
Marketing Mix
Product
Place
C
Price
Promotion
Environmental Factors
Marketing
program
Consumer
Technological forces
Concept Check
1. What is marketing?
A: Marketing is the process of planning
and executing the conception, pricing,
promotion, and distribution of ideas,
goods, and services to create
exchanges that satisfy individual and
organizational objectives.
Concept Check
discovering
2. Marketing focuses on __________
satisfying consumer needs
and ___________
Concept Check
3. What four factors are needed for
marketing to occur?
A: (1) Two or more parties with
unsatisfied needs, (2) a desire and
ability on their part be satisfied, (3) a
way for the parties to communicate,
and (4) something to exchange.
Customer Value
Customer value is the unique combination
of benefits received by targeted buyers
that includes quality, price, convenience,
on-timer delivery and both before-sale
and after-sale service.
THE MARKETING PROGRAM: HOW
CUSTOMER RELATIONSHIPS ARE BUILT
• Global Competition, Customer Value,
and Customer Relationships
• Relationship Marketing and the
Marketing Program
• Relationship Marketing: Easy to
Understand
• Relationship Marketing: Difficult to
Implement
• The Marketing Program
Relationship Marketing
The hallmark of developing and
maintaining effective customer
relationships is today called relationship
marketing, linking the organization to its
individual customers, employees,
suppliers, and other partners for their
long term benefit.
Marketing Program
The marketing program is a plan that
integrates the marketing mix to provide a
good, service, or idea to prospective
buyers.
THE MARKETING PROGRAM: HOW
CUSTOMER RELATIONSHIPS ARE BUILT
• A Marketing Program for Rollerblade
• Expanding the Market for Rollerblade
Skates
• Exploiting Strengths in Technology
Concept Check
1. An organization can’t satisfy the
needs of all consumers, so it must
focus on one or more subgroups,
target markets
which are its ____________.
Concept Check
2. What are the four marketing mix
elements that make up the
organization’s marketing program?
A: product, price, promotion, place
Concept Check
3. What are uncontrollable variables?
A: Environmental factors the
organization’s marketing department
can’t control. These include social,
economic, technological, competitive,
and regulatory forces.
FIGURE 1-7 Four different orientations in
the history of American business
Company Orientations Towards
the Marketplace
Production Era
Get out production,
cut the price.
If we can built a better
product , the world will
beat a path to our
door.
Marketing Myopia
The Marketing Myopia
Marketers should NEVER sell
products to consumers!
• People buy holes, not
drills!
• Fashion, status,
reference groups
approval, and warmth,
but not coats!
Company Orientations
Towards the Marketplace
Selling Concept Era
Get the customers to
the fit the company’s
offering.
Marketing Concept
The marketing concept is the idea that an
organization should strive to satisfy the
needs of consumers, while also trying to
achieve the organization’s goals.
Company Orientations
Towards the Marketplace
Marketing Concept Era
Find wants and feel
them
Marketing Concept
WE MAKE IT HAPPEN
FOR YOU
HAVE IT YOUR WAY
TO FLY, TO SERVE
WE ARE NOT
SATISFIED UNTIL YOU
ARE
Starting
point
Focus
Means
Ends
Factory
Existing
products
Selling and
promotion
Profits through
sales volume
(a) The selling concept
Market
Customer
needs
Integrated
marketing
Profits through
customer
satisfaction
(b) The marketing concept
Market Orientation
An organization that has a market
orientation focuses its efforts on
continuously collecting information about
customers’ needs and competitors
capabilities, sharing this information
across departments, and using the
information to create customer value.
Company Orientations
Towards the Marketplace
Market Orientation
Customer
Competition
Balancing Customer and Competitor
Orientation
Competitor Driven
Moves mainly based on competitors’
actions and reactions
Customer Driven
Market Orientation
Pays balanced attention both
customers and competitors in
designing its marketing strategies
Focuses on customer
developments in designing its
marketing strategy and on
delivering superior value to its
target customers.
Customer Relationship
Management (CRM)
Customer relationship management is
the process of identifying prospective
buyers, understanding them intimately,
and developing long-term perceptions of
the organization and its offering so that
buyers will choose them in the
marketplace.
HOW MARKETING
BECAME SO IMPORTANT
• Ethics and Social Responsibility:
Balancing the Interests of Different
Groups
• Ethics
• Social Responsibility
 Societal marketing concept
 Macromarketing
 Micromarketing
Societal Marketing Concept
The societal marketing concept is the
view that an organization should discover
and satisfy the needs of its consumer in a
way that also provides for society’s wellbeing.
Macromarketing
Macromarketing looks at how the
aggregate flow of a nation’s goods and
services benefits society.
Micromarketing
Micromarketing is how an individual
organization directs its marketing
activities and allocates its resources to
benefit its customers.
HOW MARKETING
BECAME SO IMPORTANT
• The Breadth and Depth of Marketing
• Who Markets?
• What is Marketed?
Let’s watch some commercials
(Almost) Anything Can be
Marketed
Consumer
Goods
and
Services
BusinesstoBusiness
Marketing
Not-ForProfit
Marketing
Idea,
Place,
People
Marketing
HOW MARKETING
BECAME SO IMPORTANT
• The Breadth and Depth of Marketing
(cont)
• Who Buys and Uses What is Marketed?
 Ultimate consumers
 Organizational buyers
• Who Benefits?
• How Do Consumers Benefit?
 Utility
Ultimate Consumer
Ultimate consumers are the people who
use the goods and services purchased for
a household.
Organizational Buyers
Organizational buyers are units such as
manufacturers, retailers, or government
agencies that buy goods and services for
their own use of for resale.
Who Benefits?
Consumers
Company
Society
Utility
Utility is the benefit or customer value
received by uses of a product.
UTILITIES PROVIDING by
MARKETING
Utility
Examples of Marketing Actions
that Create Utility
Form
benefit provided by transforming raw materials
into the finished (PRODUCTION)
Place
benefit provided by making the products
available where consumers want them
Time
benefit provided by storing products until they
need
Possession
benefit provided by allowing the consumer to
own, use and enjoy the product
Concept Check
1. Like Pillsbury and General Electric,
many firms have gone through four distinct
orientations for their businesses: starting
production era and ending with
with the __________
today’s ________________
market orientation era.
Concept Check
2. What are the two key characteristics of
the marketing concept?
A: An organization should (1) strive to
satisfy the needs of consumers (2)
while also trying to achieve the
organization’s goals.
Concept Check
3. In this book the term product refers to
what three things?
A: Goods (physical products), services,
and ideas