1. Building Customer Relationships Through Effective Marketing

2. What is Marketing? According to the American Marketing Association…
Marketing is the activity, set of institutions, and processes for…
Creating
Communicating
Delivering
Exchanging
…offerings that have value for customers, clients, partners, and society at large

3. Marketing: A Better Definition Process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to facilitate exchanges that satisfy customer needs and organization objectives
Product
Pricing
Promotion
Place
Ideas
Services
Goods
2 Important Functions
Facilitate Exchanges
(Encourage Purchase)
Satisfy Customer
Needs

4. Eight Major Marketing Functions

5. Managing Customer Relationships
Relationship marketing
Establishing long-term, mutually satisfying buyer-seller relationships
Customer relationship management (CRM)
Using information about customers to create marketing strategies that develop and sustain desirable customer relationships
Customer lifetime value
Measure of a customer’s worth (sales minus costs) to a business over one’s lifetime

6. Customer Loyalty What do customers want?
Sometimes it’s more profitable to retain customers by offering them big rewards than attracting new customers who may never develop the same loyalty.

7. Understanding Today’s Customers
Today’s Customers are:
Sophisticated
Demanding
Price Sensitive
Why is Customer Satisfaction Important?
Getting new customers costs more than
keeping them.
Long-term customers boost profits.
Satisfied customers tell their friends.
Customers pay more for good service.
Unhappy customers spread the word.

8. The Marketing Concept
The Marketing Concept is a business philosophy that a firm should continually try to offer products that satisfy customers needs while also making a business profit
The Marketing Concept includes three parts:
Customer Orientation -- Finding out what customers want and then providing it.
Service Orientation -- Making sure everyone in an organization is committed to customer satisfaction.
Profit Orientation -- Focusing on the goods and services that will earn the most profit.

9. Utility: The Value Added by Marketing
The ability of a good or service to satisfy a human need
Kinds of utility:
Form utility: Created by converting production inputs into finished products
Place utility: Created by making a product available at a location where customers wish to purchase it
Time utility: Created by making a product available when customers wish to purchase it
Possession utility: Created by transferring title (ownership) of a product to a buyer

10. Types of Utility

11. Markets and Their Classification
Market: A group of individuals or organizations, or both, that need products in a given category and that have the ability, willingness, and authority to purchase such products
Consumer markets:
Purchasers and/or households members who intend to consume or benefit from the purchased products and who do not buy products to make a profit
Business-to-business (industrial) markets:
Producer, reseller, governmental, and institutional customers that purchase specific kinds of products for use in making other products for resale or for day-to-day operations

12. Developing Marketing Strategies
Marketing strategy: A plan that will enable an organization to make the best use of its resources and advantages to meet its objectives.
Consists of:
The selection and analysis of a target market
The creation and maintenance of an appropriate marketing mix (a combination of product, price, distribution, and promotion developed to satisfy a particular target market)

13. Target Market Selection and Evaluation
A group of individuals, organizations, or both, for which a firm develops and maintains a marketing mix suitable for the specific needs and preferences of that group
Market segment
A group of individuals or organizations within a market that share one or more common characteristics
Market segmentation
The process of dividing a market into segments and directing a marketing mix at a particular segment or segments rather than at the total market

14. A Well-Chosen Market
Size: There must be enough people in your target group to support a business
Profitability: The people must be willing and able spend more than the cost of producing and marketing the product
Accessibility: Your target must be reachable through channels that your business can afford
Limited Competition: Look for markets with limited competition; a crowded market is tough to crack

15. Undifferentiated Approach
Directing a single marketing mix at the entire market for a particular product
Useful in only a limited number of situations

16. Market Segmentation Approach
Group of individuals or organizations within a market that share one or more common characteristics

17. Differentiated Market Segmentation

18. Common Bases of Market Segmentation

19. Segmenting the Market

20. Marketing Mix

21. The Marketing Mix: The 4 P’s
Product
Product differentiation
Brand
Product
Decisions about product’s design, purpose, brand name, packaging, and warranties
Price
Cover costs
Competitively priced
Price
Decisions based on price setting (what to charge for product) including rebates, and discounts
Promotion
Inform and persuade customers to buy
Build positive customer relationships
Promotion
Decisions that sellers use to persuade and communicate to people to buy their products / services
Place
Distribution channel
Distributors and wholesalers
Place (Distribution)
Decisions based on moving products from producers to consumers (marketing channels)

22. Marketing Strategy and the Marketing Environment
The Marketing Mix (4 P’s): The marketing mix consists of elements that a firm controls and uses to reach its target market
The Marketing Environment: Forces that make up the external and outside the firm’s control include:
Economic forces
Sociocultural forces
Political forces
Competitive forces
Legal and regulatory forces
Technological forces

23. Marketing Information Systems
A system for managing marketing information that is gathered continually from internal and external sources
Internal data sources
Sales figures, product and marketing costs, inventory, sales force activities
External data sources
Suppliers, intermediaries, customers, competitors, economic conditions
Outputs
Sales reports, sales forecasts, buying trends, market share

24. Marketing Research
Process of systematically gathering, recording, and analyzing data concerning a particular marketing problem
Six steps of marketing research
Define the problem
Make a preliminary investigation
Plan the research
Gather factual information
Interpret the information
Reach a conclusion

25. Using Technology to Gather and Analyze Marketing information
Database: Collection of information arranged for easy access and retrieval, such as:
LEXIS-NEXIS
Reader’s Digest
Single-source data: Information provided by a single firm
Online information services: Offer subscribers access to , websites, mailing lists
Internet: Useful in accessing Web pages such as Nielsen and Advertising Age

26. Consumer Buying Behavior
Consumers’ buying behaviors differ for different types of products

27. Consumer Buying Power
Personal income: The income an individual receives from all sources less the Social Security taxes the individual must pay
Disposable income: Personal income less all additional personal taxes
Discretionary income
Disposable income less savings and expenditures on food, clothing, and housing
Of particular interest to marketers due to choice of how to spend it