CREATING CUSTOMER RELATIONSHIPS AND VALUE THROUGH MARKETING CHAPTER CREATING CUSTOMER RELATIONSHIPS AND VALUE THROUGH MARKETING http://highered.mcgraw-hill.com/sites/0070043450/student_view0/index.html

plus WHAT IS MARKETING? A Philosophy An Attitude A Perspective A Management Orientation A Set of Activities, including: Products Pricing Promotion Distribution plus

American Marketing Association Definition WHAT IS MARKETING? American Marketing Association Definition 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 goals. Marketing = Using Exchanges to Satisfy Needs

The Concept of Exchange The idea that people give up something to receive something they would rather have. Both buyer and seller are better off after the trade.

to buy a specific product WHO DO I AIM AT? Market – All people with both the desire and ability to buy a specific product Target Market – One or more subgroups I can satisfy

THE CONTROLLABLE MARKETING FORCES The Four P’s -the “arrow” Price Promotion Place Product

THE UNCONTROLLABLE MARKETING FORCES Social Natural Economic Technologic Political and Legal Competitive External Environmental Factors Helps identify market opportunities

FIGURE 1-A Summary of factors that affect an organization’s marketing program An alternative look at the internal and external marketing factors that affect an organization’s marketing program. Information flows from consumers to the marketing department,n which develops a cohesive marketing program to integrate the four marketing mix elements and adapt to the five environmental forces.

FIGURE 1-4 Marketing’s task: satisfying consumer needs

HOW MARKETING BECAME SO IMPORTANT Evolution of the Market Orientation Production Era Sales Era Marketing Concept Era Societal Era

MARKETING MANAGEMENT PHILISOPHIES Orientation Key Ideas Production Focus on efficiency of internal operations – if we make it, they will buy it Sales Focus on aggressive sales techniques and believe that high sales result in high profits Market Focus on satisfying customer needs and wants while meeting objectives - if they will buy it, we will make it Societal Focus on satisfying customer needs and wants while enhancing individual and societal well-being. I.e.-mfg using recyclables

FIGURE 1-B Four different orientations in the history of American business Societal

THE BREADTH & DEPTH OF MARKETING What Is Marketed? Goods Services Ideas Who Buys and Uses What Is Marketed? Ultimate Consumers Organizational Buyers

HOW DO CONSUMERS BENEFIT Utility – the benefits or customer value received by users of the product

HOW TO DELIVER VALUE Customer value-benefits received by targeted buyers that include quality, price, convenience, on-time delivery, and both before-sale and after-sale service. Offer products that perform Give consumers more than they expect Avoid unrealistic pricing Give the buyer facts Offer organization-wide commitment in service and after-sales support

KEEPING THE CUSTOMER SATISFIED Meet or exceed customer’s expectations Provide solutions to customer’s problems Cultivate relationships, NOT one-time transactions

Concept Check 1. What is marketing? A: Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

Concept Check 1. An organization can’t satisfy the needs of all consumers, so it must focus on one or more subgroups, which are its ____________. target markets

A: product, price, promotion, place Concept Check 2. What are the four marketing mix elements that make up the organization’s marketing program? A: product, price, promotion, place

3. What are environmental forces? Concept Check 3. What are environmental forces? A: Environmental forces are those that the organization’s marketing department can’t control. These include social, economic, technological, competitive, and regulatory forces.

1. What are the two key characteristics of the marketing concept? Concept Check 1. What are the two key characteristics of the marketing concept? A: (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization’s goals.

2. What is the difference between goods and services? Concept Check 2. What is the difference between goods and services? A: Goods are physical objects whereas services are complex intangible items, such as legal advice, a college education, or airline travel.

Exchange Exchange is the trade of things of value between buyer and seller so that each is better off after the trade.

Market A market consists of people with both the desire and ability to buy a specific product.

Customer Value Customer value is the unique combination of benefits received by targeted buyers that includes quality, price, convenience, on-time delivery, and both before-sale and after-sale service.

Marketing Concept The marketing concept is the idea that an organization should (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization’s goals.

Market Orientation An organization that has a market orientation focuses its efforts on (1) continuously collecting information about customers’ needs, (2) sharing this information across departments, and (3) using it to create customer value.

Societal Marketing Concept The societal marketing concept is the view that an organization should satisfy the needs of consumers in a way that provides for society’s well-being.

Organizational Buyers Organizational buyers are those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale.

Utility Utility is the benefits or customer value received by users of the product.