Transcript The marketing concept

Copyright © 2005 Pearson Education Canada Inc.
Marketing: Managing Profitable Customer
Relationships
•Chapter 1
•Powerpoint slides
•Extendit! version
•Instructor name
•Course name
•School name
•Date
Principles of Marketing: 6th Canadian Edition
Learning Objectives
1.2
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• After studying this chapter, you should be able to:
– Define what marketing is and discuss its core concepts
– Define marketing management and compare the five marketing
management orientations
– Discuss customer relationship management and strategies for
building lasting customer relationships
– Analyze the major
challenges facing
marketers heading into
the new “connected”
millennium
Principles of Marketing: 6th Canadian Edition
Copyright © 2005 Pearson Education Canada Inc.
Opening Vignette: VanCity Credit Union
1.3
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Founded in 1946 in Vancouver, British Columbia
In 2003: 286,000 members in 39 branches
Credit unions are cooperatives, owned by members
Profits returned as dividends or improved
services/prices
• Triple bottom line
• Measures success by:
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Customer satisfaction
Profits
Community impact
Member involvement
Environmental sustainability
Growth in new members
• Uses non-traditional marketing tools
Principles of Marketing: 6th Canadian Edition
1.4
Marketing Defined
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• Marketing:
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Social and managerial process
Individuals and groups obtain what they need
Creating and exchanging
Products and values with others
• Needs:
Figure 1.1
– Felt deprivation
• Wants:
– Form of needs shaped by culture
and personality
• Demands:
– Wants backed by buying power
Principles of Marketing: 6th Canadian Edition
Products, Services, and Experiences
1.5
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• Marketing offer:
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Address needs with a value proposition
Set of benefits promised to customers to satisfy needs
Can include:
Products
Services
Persons
Places
Organizations
Information
Ideas
Figure 1.1
Principles of Marketing: 6th Canadian Edition
1.6
Value and Satisfaction
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• Value:
– Benefits gained versus costs of obtaining product
• Satisfaction:
– Degree of meeting consumer’s expectations
– Expectations formed from:
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Figure 1.1
Previous experience
Opinions of others
Marketing information
Competitive information and
promises
– Satisfied customers buy again and
tell others
– Dissatisfied customers switch and
tell others
Principles of Marketing: 6th Canadian Edition
Exchange, Transactions, and Relationships
1.7
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• Exchange:
– Obtaining a desired object
– By offering something in return
• Transaction:
– Two things of value
Figure 1.1
– Agreed-upon conditions
– Time/place of agreement
• Exchange relationships:
– Want to build strong economic
and social connections
– Consistently delivering superior
value
Principles of Marketing: 6th Canadian Edition
1.8
Marketing Management
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• Market:
– A physical place where buyers and sellers gather
– Set of actual or potential buyers of a product
• Marketing management:
– Choosing target markets
– Building profitable relationships with them
• Demarketing:
Figure 1.2
– Reduce, not destroy
demand
– Temporarily or
permanently
Principles of Marketing: 6th Canadian Edition
1.9
Marketing Management Orientations
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• Production concept:
– Consumers will favour available/affordable products
– Focus on improving production/distribution efficiency
– Still useful when demand exceeds supply
• Product concept:
– Consumers favour products
with the best:
Figure 1.3
• Quality
• Performance
• Features
– Focus on continuous
product improvements
Principles of Marketing: 6th Canadian Edition
Marketing Management Orientations
1.10
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• Selling concept:
– Products need large-scale selling/promotion effort
– Focus on the hard sell
– Unsought goods, or when company has overcapacity
• The marketing concept:
– Achieve organizational
objectives by
– Determining needs and
wants of target consumers
– Delivering satisfaction
– Better than competitors
Figure 1.3
Principles of Marketing: 6th Canadian Edition
Societal Marketing Concept
1.11
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• Societal marketing concept:
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The marketing concept focuses on short-run wants
May be in conflict with consumer long-run welfare
Determine needs/wants of target markets
Deliver desired satisfactions
More efficiently and effectively
than competitors
– In a way that maintains or
improve consumer’s and
society’s well-being
Figure 1.4
Principles of Marketing: 6th Canadian Edition
Customer Relationship Management
1.12
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• Customer relationship management:
– Process of building/maintaining profitable customer relationships
– Delivering superior customer value and satisfaction
• Customer lifetime value:
– Value of the entire purchase stream
– Customer makes over a
lifetime
– Focus on the long-term
– Very few new customers, just
someone else’s
– More efficient to look after
your own customers
– Than to try to find new ones
Figure 1.5
Principles of Marketing: 6th Canadian Edition
Customer Satisfaction and Loyalty
1.13
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• Customer perceived value:
– Difference between total customer value
– And total customer cost
– To the customer, perception is reality
• Customer satisfaction:
– Extent a product’s perceived
performance
– Matches expectations
– Maximizing customer
satisfaction may not be
possible or will be cost
prohibitive
Figure 1.5
Principles of Marketing: 6th Canadian Edition
Customer Satisfaction and Loyalty
1.14
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• Customer loyalty:
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Highly satisfied customers are less price sensitive
Speak favourably about the company and products
Remain loyal for longer period of time
Link between satisfaction and
loyalty is positive, but
Different for some industries
To the customer, slight
changes in satisfaction may
trigger switching
Companies need to aim high
Focus on greater “share of
wallet”
Figure 1.5
Principles of Marketing: 6th Canadian Edition
Building Customer Relationships
1.15
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• Customer equity:
– Total combined customer lifetime values
– Of all of the company’s customers
• Relationship tools:
– Levels from developing basic
relationships to creating full
partnerships
– Financial benefits: frequency
marketing programs
– Social benefits: club marketing
– Adding structural ties
– Focus on profitable customers
Principles of Marketing: 6th Canadian Edition
Copyright © 2005 Pearson Education Canada Inc.
Today’s Marketing Connections
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Single theme: connecting
The Internet
One to one marketing
Selective relationship
management
1.16
Figure 1.6
• Increase share of
customer
• Partner relationship
management
• Supply chain
management
• Strategic alliances
Principles of Marketing: 6th Canadian Edition
Copyright © 2005 Pearson Education Canada Inc.
Marketing Connections in Transition (Table 1.1)
Old marketing thinking:
New marketing thinking:
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Sales/product centered…
Practice mass marketing…
Focus on product/sales…
Make sales to customers…
Get new customers…
Grow share of market…
Serve any customer…
Use mass media…
Standardized products…
Sales/marketing responsible for
customer satisfaction/value…
Go it alone…
Market locally…
Profit responsibility…
Corporations…
Use marketplaces…
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1.17
Market/customer centered
Selected market segments
Focus on customer satisfaction/value
Develop customer relationships
Keep old customers
Grow share of customer
Serve profitable customers
Connect with customers directly
Customized products
Enlist all departments to deliver
customer satisfaction/value
Partner with others
Market locally and globally
Social/environmental responsibility
Non-profits
Use marketspaces
Principles of Marketing: 6th Canadian Edition
In Conclusion…
1.18
Copyright © 2005 Pearson Education Canada Inc.
• The learning objectives for this chapter were:
– Define what marketing is and discuss its core concepts
– Define marketing management and compare the five
marketing management orientations
– Discuss customer relationship
management and strategies for
building lasting customer
relationships
– Analyze the major challenges facing
marketers heading into the new
“connected” millennium
Principles of Marketing: 6th Canadian Edition