Transcript Chapter 1

Part 1: Marketing strategy and
management
Chapter 1: Creating customer value and
building relationships
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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When we finish this lecture you should
• Know what the term ‘marketing’ means and understand
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marketing in today’s business environment
Understand the ‘marketing concept’
Recognise that marketing can be applied to services,
ideas and ‘causes’
Understand the links between marketing and other
functions
Understand the place that marketing has in government
and non-profit organisations
Understand the concept of ethics in marketing
Understand the particular needs of marketing in a
global context
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Things a company should do to
produce bicycles
• Try to carry out the marketing concept
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Maintain a customer orientation
All departments guided by customer needs
Focus on profit (or other overall) objective
• Do NOT just try to ‘unload’ what the company has
produced
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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The importance of marketing
• Marketing influences many aspects of people’s
daily lives
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All goods and services they buy
Stores in which they purchase
Radio and TV programs they consume are paid for by
advertising
CV they produce to impress potential employers
• Marketing offers exciting career paths
• Marketing is important to every organisation
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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The importance of marketing
(continued)
• Marketing concepts and techniques are also
relevant for non-profit companies
• Marketing plays a major role in economic growth
and development by
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Stimulating research and new ideas, resulting in new
goods and services
Providing choice among products which may satisfy
customers, resulting in fuller employment, higher incomes
and higher standards of living
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Defining marketing
• ‘The creation and delivery of a standard of living’
(Malcolm P.McNair, 1968; and John W. Barnes, 1996)
• More than merely ‘advertising and selling’
(Marketing: Creating and Delivering Value, 4/e, Quester et al. p. 7)
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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What is marketing?
• Macro-marketing
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a process that directs an economy's flow of goods and
services from producers to consumers in a way that
effectively matches supply and demand and accomplishes
the economic, legal, technological, political,
environmental and social objectives of that society
• Micro-marketing
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the performance of activities that collectively seek to
accomplish an organisation's objectives by anticipating
customer needs and directing a flow of need-satisfying
goods and services from the producer to customer or
client.
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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The evolution of marketing
Simple trade orientation
Focus: each producer
made products for
themselves and neighbours
Production orientation
Focus: if we can make it,
it will sell
Sales-orientation
Focus: sales turnover in
the face of competition
Marketing department
orientation
Marketing company
orientation
Societal marketing
orientation
Focus: coordinate all
customer contacts
Focus: long-run
customer satisfaction
Focus: ‘the good life’
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The marketing concept
• The idea than an organisation aims all of its
efforts, in a coordinated and integrated manner, at
simultaneously satisfying its customers and
achieving its own corporate goals
(Marketing: Creating and Delivering Value, 4/e, Quester et al. p. 10)
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Figure 1.1 Organisations with a marketing
orientation carry out the marketing concept
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Exhibit 1.1a
COURTESY OF SWISSÔTEL.
Demonstrating the
satisfaction that a customer
will derive from using a
product or service is useful
to attract consumers.
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Figure 1.2 The typical differences in outlook
between marketing- and production-oriented
management
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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The marketing concept and customer
value
• The difference between the benefits a customer
sees from a market offering and the costs of those
benefits
• A good or service that does not meet a consumer’s
needs results in low customer value, even if the
price is very low
• A higher price may be acceptable if the desired
benefits are obtained
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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The marketing concept and
competition
• Competition cannot be ignored
• An organisation that offers superior customer value
is likely to win and keep customers
• Often, the best way to improve customer value is
to be the first to identify and satisfy a need that
others have not even considered
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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The marketing concept and customer
relationships
• Businesses that embrace the marketing concept
seek ways to build a long-term relationship with
each customer
• Even the most innovative company faces
competition
• Luring a customer away from a competitor is more
costly than retaining current customers
• Customer relationship management (CRM)
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Information industry term for methodologies, software
and Internet capabilities that help a company manage
customer relationships in an organised way
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REPRODUCED WITH THE PERMISSION OF HP/COMPAQ.
Exhibit 1.2
Many businesses are becoming aware that existing customers are
important for their survival.
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Marketing and production
• Utility—the power to satisfy human needs
• Form utility—is provided when something tangible is
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produced
Task utility—is provided when someone performs a
task for someone else
Time utility—having the product available when the
customer wants it
Place utility—having the product available where the
customer wants it
Possession utility—obtaining a good or service and
having the right to use or consume it
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Figure 1.3 Types of utility and how they are
provided
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Marketing and finance
• Even the best ideas about how to satisfy
consumers better will not succeed unless there is
enough capital to fund the marketing strategy
• The marketing manager and finance manager must
work together to ensure that the company
implements its marketing plans with the money
that is available
• The financial wellbeing of the company also
depends on the success of the marketing strategy
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Marketing and accounting
• Accounting data helps managers track where costs
and profits are coming from
• Marketing cost analysis usually requires new ways
of classifying accounting data by function
• Functional costs are then redistributed by product
or customer
• Accountants must realise that without sales there
will be very little activity!
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Marketing and human resources
• Many organisations that have identified a
marketing opportunity will be unable to take
advantage of it because they don’t have the right
staff
• In service organisations the wrong person can
undermine the best strategy and turn away
consumers forever
• Change can unsettle employees; so, marketers
must give full consideration to the impact of a new
strategy on the people
• Communication—internal marketing
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Marketing and information systems
(MIS)
• Marketing managers must collect and analyse lots
of information in order to make sound strategic
decisions
• Marketers must also remain in touch with
environmental changes
• Marketing managers should contribute to the
design of information systems
• Marketers must be able to articulate clearly the
specific benefits they seek from IT
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Marketing and government and nonprofit organisations
• The marketing concept is as important for non•
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profit organisations as it is for businesses
Non-profit organisations need resources and
support to survive and achieve their objectives
Most non-profit organisations face competition
Non-profit organisations must raise as much
money as they spend
Adopting the marketing concept can assist in
developing a focus on the objectives that are
achievable
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Figure 1.4 Examples of the adoption of marketing
by non-profit organisations
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Social responsibility and ethics
• Social responsibility concerns an organisation’s
obligation to improve its positive effects on society
and reduce its negative effects
• Social responsibility sometimes requires
compromise
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Marketing ethics
• Marketing ethics are the moral standards that
guide marketing decisions and actions
• Teleological view—assesses the moral worth of
behaviour by its consequences
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Egoism—individuals should focus solely on the
consequences to themselves when making an ethical
evaluation
Utilitarianism—concerned with an evaluation at the level
of society
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PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Marketing ethics (continued)
• Deontology—emphasises the importance of
methods and intentions and judges individual acts
by the nature of the act itself
• Relativism—no universal ethical rules exist that
apply to everyone because all normative beliefs are
a function of a culture or individual
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Figure 1.5 Australian Marketing Institute’s Code
of Professional Conduct
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Global aspects of marketing
• Many Australian and New Zealand companies are
exposed to foreign competitors—at home and
overseas
• Companies have to operate more effectively to
obtain new customers or retain existing ones
• Marketers can benefit by studying the marketing
strategies of foreign competitors, for example the
Asian and Japanese markets
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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What we will be doing in the next
chapter
The next chapter introduces the strategic marketing plan in
some detail
• Marketing planning is the focus of the text
•
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Figure 2.9 Framework and summary outline of the
different sections of a marketing plan
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Figure 2.9 Framework and summary outline of the
different sections of a marketing plan (continued)
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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Figure 2.9 Framework and summary outline of the
different sections of a marketing plan (continued)
Copyright  2004 McGraw-Hill Australia Pty Ltd
PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy
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