1. BA 631 Marketing Management
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Marketing Management
Session I : Introduction and Overview
Customer Value, Satisfaction and Retention
MM 601, IBMP, Thammasat University, Semester 2/2552

2. BA 631 Marketing Management
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Agenda
Course Organization
Course Materials
Tasks of Marketing
Major Concepts & Tools of Marketing
How has marketing management changed?
What are customer value, satisfaction, and loyalty, and how can company delivers them?

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Course Organization
Part I - Understanding Marketing Management
Part II - Analyzing Marketing Opportunities
Part III - Developing Marketing Strategies
Part IV – Developing Marketing Offerings

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Course Materials
Text Reading – Marketing Management, Kotler & Keller, 13th Edition
Mini Cases
Marketing Plan

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What is Marketing? (Social Definition)
Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.

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What is Marketing? (Managerial Definition)
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.

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Marketing Management
Marketing management is the art and science
of choosing target markets and getting, keeping, and growing customers through
creating, delivering, and communicating
superior customer value.

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What is marketed?
Goods
Services
Events & Experiences
Persons
Places & Properties
Organizations
Information
Ideas

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Simple Marketing System
Communication
Industry
(a collection
of sellers)
Market
of Buyers)
Goods/services
Money
Information

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Structure of Flows
Resources
Resource
markets
Money
Taxes
Taxes,
goods
Services,
money
Government
markets
Services
Manufacturer
markets
Consumer
markets
Intermediary
Goods, services
Money

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Company Orientations toward the Marketplace
Production Concept
Consumers prefer products that are
widely available and inexpensive
Mass Production, Cost Leadership, Wide Coverage
Product Concept
Consumers favor products that offer the most quality, performance, or innovative features
Best Quality, Performance, Innovative Product

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Company Orientations toward the Marketplace
Selling Concept
Consumers will buy products only if
the company aggressively
promotes/sells these products
High Sales Volume, Short Term Oriented
Marketing Concept
Focuses on needs/wants of target
markets & delivering value
better than competitors
Target Market, Customer’s need, Coordinated Marketing, Profitability

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Selling & Marketing Concepts
Factory
Existing
products
Selling and
promotion
Profits through
sales volume
Starting
point
Focus
Means
Ends
(a) The selling concept
Market
Integrated
marketing
Profits through
customer
satisfaction
Customer
needs
(b) The marketing concept

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Company Orientations toward the Marketplace
Develop, design, implement marketing
programs, processes and activities
that recognizes their breadth,
and interdependencies.
Holistic Marketing
Concept
Relationship Marketing, Internal Marketing, Integrated Marketing, Socially responsible marketing

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Company Orientations toward the Marketplace

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Marketing Management Tasks
Developing marketing strategies
Capturing marketing insights
Connecting with customers
Building strong brands
Shaping market offerings
Delivering value
Communicating value
Creating long-term growth

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Customer Value
The customers will buy from the firm that they perceive offers the highest customer delivered value.

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Determinants of Customer Delivered Value
Image value
Personnel value
Services value
Product value
Total
customer
value
Customer
delivered
value
Monetary cost
Time cost
Energy cost
Psychic cost
Total
customer
cost

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Customer Satisfaction
Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations
Satisfaction is a function of perceived performance and expectations

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Customer Expectation
Is based upon the customer’s past buying experiences, the opinions of friends and associates, and marketer and competitor information and promises.

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Satisfied Customer
Are loyal longer
Buy more (new products & upgrades)
Spread favorable word-of-mouth
Are more brand loyal (less price sensitive)
Offer feedback
Reduce transaction costs

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Customer Loyalty
A deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior.

23. BA 631 Marketing Management
Tracking and Measuring Customer Satisfaction
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Complaints and Suggestion Systems
Periodic Survey
Ghost Shopping (Mystery shoppers)
Lost Customer Analysis
Monitor competitive performance

24. BA 631 Marketing Management
Retaining Customers
BA 631 Marketing Management
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Intense competition and maturity of market increase the costs of attracting new customers.
It costs much less to service an existing customer than to create a new one.
Acquisition of customers can cost 5 times more than retaining current customers.
Repeat purchases and loyal customers are the main driver of profitability for most businesses.

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Forming strong customer bonds
Adding Financial Benefits
- Frequency Marketing Programs
Adding Social Benefits
- Brand Communities
Adding Structural Ties
- Special equipment or computer software, EDI

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Customer Profitability
The 80/20/30 rule of customer profitability
The top 20% of clients generate 80% of total profit
The bottom 30% of clients consume half of all profits generated by other customers

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The Profit Triangle
Profit
Value creation
Internal operations
Competitive advantage

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Marketing Overview
3 C’s
Customer
Competitor
Company
Market Research S
(Segment) T
(Target) P
(Position)
4 P’s
Product
Price
Place
Promotion

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The Four Ps

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The Four Ps & The Four Cs
Marketing
Mix
Product
Place
Promotion
Price
Conven-
ience
Customer
Solution
Customer
Cost
Communication