1. Chapter 1 Marketing: Managing Profitable Customer Relationships

2. ROAD MAP: Previewing the Concepts
Chapter 1
ROAD MAP: Previewing the Concepts
What is marketing?
Key steps in the marketing process.
Consumers’ needs and wants.
Five core marketplace concepts.
Key elements of a customer-driven marketing strategy.
Marketing management orientations that guide marketing strategy.
Customer relationship management and strategies.
Major trends and forces that are changing the marketing landscape in this new age of relationships.
Professor Takada

3. What is Marketing? Marketing is an organizational function
Chapter 1
What is Marketing?
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.
Professor Takada

4. What is Marketing Management?
Chapter 1
What is 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.
Professor Takada

5. Selling is only the tip of the iceberg
Chapter 1
Selling is only the tip of the iceberg
“There will always be need for
some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available.”
Peter Drucker
Professor Takada

6. Designing the “Right” Product
Chapter 1
Designing the “Right” Product
Professor Takada

7. Only the best is good enough for Lexus customers
Chapter 1
Only the best is good enough for Lexus customers
Professor Takada

8. Key Customer Markets Consumer Markets Global Markets Business Markets
Chapter 1
Key Customer Markets
Consumer Markets
Global Markets
Business Markets
Nonprofit/ Government Markets
Professor Takada

9. ROAD MAP: What is marketing? Key steps in the marketing process.
Chapter 1
ROAD MAP:
What is marketing?
Key steps in the marketing process.
Consumers’ needs, wants, and demands.
Five core marketplace concepts.
Key elements of a customer-driven marketing strategy.
Marketing management orientations that guide marketing strategy.
Customer relationship management and strategies.
Major trends and forces that are changing the marketing landscape in this new age of relationships.
Professor Takada

10. A Simple Model of the Marketing Process
Chapter 1
A Simple Model of the Marketing Process
Create value for customers and build customer relationships
Construct a marketing program
that delivers superior value
Understand the marketplace and customer needs and wants
Design a customer-driven marketing
strategy
Capture value from customers in return
Capture value from customers to create profits and customer equity
Build profitable relationships and create
customer delight
Professor Takada

11. ROAD MAP: Previewing the Concepts
Chapter 1
ROAD MAP: Previewing the Concepts
What is marketing?
Key steps in the marketing process.
Consumers’ needs, wants, and demands.
Five core marketplace concepts.
Key elements of a customer-driven marketing strategy.
Marketing management orientations that guide marketing strategy.
Customer relationship management and strategies.
Major trends and forces that are changing the marketing landscape in this new age of relationships.
Professor Takada

12. Chapter 1
Needs - state of felt deprivation including physical, social, and individual needs.
Types of Needs
Physical:
Food, clothing, shelter, safety
Social:
Belonging, affection
Individual:
Learning, knowledge, self-expression
Wants - form that a human need takes, as shaped by culture and individual personality.
Professor Takada

13. I want it, I need it… 5 Types of Needs Stated needs Real needs
Chapter 1
I want it, I need it…
5 Types of Needs
Stated needs
Real needs
Unstated needs
Delight needs
Secret needs
Professor Takada

14. What is Marketed? Goods Services Events & Experiences Persons
Chapter 1
What is Marketed?
Goods
Services
Events & Experiences
Persons
Places & Properties
Organizations
Information
Ideas
Professor Takada

15. Chapter 1
Marketing Goods
Professor Takada

16. Chapter 1
Marketing Ideas: Friends Don’t Let Friends Drive Drunk This is the watch Stephen Hollingshead, Jr. was wearing when he encountered a drunk driver. Time of death 6:55 p.m.
Professor Takada

17. What Satisfies Consumers’ Needs and Wants?
Chapter 1
What Satisfies Consumers’ Needs and Wants?
Products
Anything that can be Offered to a Market to Satisfy a Need or Want
Persons
Places
Organizations
Information
Ideas
The combination of tangible products, particular people, and certain activities in a particular place creates an experience (e.g., Disneyland)
We are moving toward being a less manufacturing-based society and a more service-oriented society.
Services
Activity or Benefit Offered for Sale That is Essentially
Intangible and Does Not Result in the Ownership of Anything
Professor Takada

18. Chapter 1
Product as an Idea
Products do not have to be physical objects. Here the “product” is an idea—protecting animals.
Professor Takada

19. Chapter 1
Marketing Myopia
Sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products.
They focus on the “wants” and lose sight of the “needs.”
Professor Takada

20. Value and Satisfaction
Chapter 1
Value and Satisfaction
Expectation
Performance 10 8
Expectation
Performance 8 10
If performance is lower than expectations, satisfaction is low.
If performance is higher than expectations, satisfaction is high.
Professor Takada

21. A Simple Marketing System
Chapter 1
A Simple Marketing System
Professor Takada

22. Elements of a Modern Marketing System
Chapter 1
Elements of a Modern Marketing System
Professor Takada

23. Structure of Flows in a Modern Exchange Economy
Chapter 1
Structure of Flows in a Modern Exchange Economy
Professor Takada

24. Chapter 1
Marketing Management
The art and science of choosing target markets and building profitable relationships with them.
Questions to ask:
What customers will we serve?
What is our target market?
How can we best serve these customers?
What is our value proposition?
Professor Takada

25. Segmentation and Target Marketing
Chapter 1
Segmentation and Target Marketing #1 #2
Market Segmentation:
Divide the market into segments of customers
Target Marketing:
Select the segment to cultivate
Professor Takada

26. Marketing Management Demand Management Demarketing
Chapter 1
Marketing Management
Demand
Management
Finding and increasing demand, also changing or reducing demand, such as in demarketing.
Temporarily or permanently reducing the number of customers or shifting their demand.
Demarketing
Professor Takada

27. ROAD MAP: What is marketing? Key steps in the marketing process.
Chapter 1
ROAD MAP:
What is marketing?
Key steps in the marketing process.
Consumers’ needs and wants.
Five core marketplace concepts.
Key elements of a customer-driven marketing strategy.
Marketing management orientations that guide marketing strategy.
Customer relationship management and strategies.
Major trends and forces that are changing the marketing landscape in this new age of relationships.
Professor Takada

28. Marketing Management Philosophies
Chapter 1
Marketing Management Philosophies
Customer-Driven
Societal Marketing Concept
Marketing Concept
Selling Concept
Product Concept
Production Concept
Professor Takada

29. Marketing and Sales Concepts Contrasted
Chapter 1
Marketing and Sales Concepts Contrasted
Professor Takada

30. Societal Marketing Concept
Chapter 1
Societal Marketing Concept
Professor Takada

31. Corporate Social Initiatives
Chapter 1
Corporate Social Initiatives
Professor Takada

32. Corporate Social Initiatives
Chapter 1
Corporate Social Initiatives
Professor Takada

33. Holistic Marketing Dimensions
Chapter 1
Holistic Marketing Dimensions
Professor Takada

34. ROAD MAP: What is marketing? Key steps in the marketing process.
Chapter 1
ROAD MAP:
What is marketing?
Key steps in the marketing process.
Consumers’ needs and wants.
Five core marketplace concepts.
Key elements of a customer-driven marketing strategy.
Marketing management orientations that guide marketing strategy.
Customer relationship management and strategies.
Major trends and forces that are changing the marketing landscape in this new age of relationships.
Professor Takada

35. The Marketing Mix Product Price Customer Needs Promotion Distribution
Chapter 1
The Marketing Mix
Customer
Needs
Product
Price
Promotion
Distribution
Professor Takada
1-9

36. Marketing-Mix Strategy
Chapter 1
Marketing-Mix Strategy
Professor Takada

37. Marketing Mix and the Customer
Chapter 1
Marketing Mix and the Customer
Four P’s
Product
Price
Place
Promotion
Four C’s
Customer solution
Customer cost
Convenience
Communication
Professor Takada

38. Factors Influencing Marketing Strategy
Chapter 1
Factors Influencing Marketing Strategy
Professor Takada

39. Marketing Management Tasks
Chapter 1
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
Professor Takada

40. ROAD MAP: What is marketing? Key steps in the marketing process.
Chapter 1
ROAD MAP:
What is marketing?
Key steps in the marketing process.
Consumers’ needs and wants.
Five core marketplace concepts.
Key elements of a customer-driven marketing strategy.
Marketing management orientations that guide marketing strategy.
Customer relationship management and strategies.
Major trends and forces that are changing the marketing landscape in this new age of relationships.
Professor Takada

41. Customer Relationship Management
Chapter 1
Customer Relationship Management
The process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
Customer Perceived Value
Customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.
Professor Takada

42. Customer Relationship Levels
Chapter 1
Customer Relationship Levels
Full Partnership
Basic Relationship
Continuum
Professor Takada

43. Focus on Profitable Customers
Chapter 1
Loyalty and Retention
Social Benefits
Financial Benefits
Structural Ties
Focus on Profitable Customers
Professor Takada

44. Partner Relationship Marketing
Chapter 1
Partner Relationship Marketing
Partners Inside the Firm
All employees customer focused
Teams coordinate efforts toward customers
Partners Outside the Firm
Supply chain management
Strategic alliances
Professor Takada

45. Customer Loyalty & Retention
Chapter 1
Customer Loyalty & Retention
Customer Lifetime Value
The entire stream of purchases that the customer would make over a lifetime of patronage.
Share of Customer
The share a company gets of the customers purchasing in their product categories.
Customer Equity
Customer equity is the total combined customer lifetime values of all the company’s customers.
Professor Takada

46. Customer Relationship Groups
Chapter 1
Customer Relationship Groups
Butterflies
True Friends
Good fit between company’s offerings and customer’s needs; high profit potential
Good fit between company’s offerings and customer’s needs; highest profit potential
High
Profitability
Strangers
Barnacles
Little fit between company’s offerings and customer’s needs; lowest profit potential
Limited fit between company’s offerings and customer’s needs; low profit potential
Low
Short-term customers
Long-term customers
Projected loyalty
Professor Takada

47. ROAD MAP: What is marketing? Key steps in the marketing process.
Chapter 1
ROAD MAP:
What is marketing?
Key steps in the marketing process.
Consumers’ needs and wants.
Five core marketplace concepts.
Key elements of a customer-driven marketing strategy.
Marketing management orientations that guide marketing strategy.
Customer relationship management and strategies.
Major trends and forces that are changing the marketing landscape in this new age of relationships.
Professor Takada

48. Chapter 1
The Internet
The Internet has been hailed as the technology behind a New Economy.
Marketing applications include:
“Click-and-mortar” companies
“Click-only” companies
Business-to-business e-commerce
Business-to-business transactions online are expected to reach $4.3 trillion in 2005.
By 2005, 500,000 companies will use the Internet to do business.
Professor Takada

49. New Marketing Landscape
Chapter 1
New Marketing Landscape
Rapid Globalization
Not-for-Profit
Marketing
Ethics & Social
Responsibility
New World of Marketing
Relationships
Professor Takada

50. Chapter 1
Global Markets
Coke is represented at the first China International Beverage Festival in Beijing in 2003
Professor Takada

51. The marketplace isn’t what it used to be…
Chapter 1
The marketplace isn’t what it used to be…
Changing technology
Globalization
Deregulation
Privatization
Empowerment
Customization
Convergence
Disintermediation
Professor Takada

52. Core Concepts Needs, wants, and demands Marketing channels
Chapter 1
Core Concepts
Needs, wants, and demands
Target markets, positioning, segmentation
Offerings and brands
Value and satisfaction
Marketing channels
Supply chain
Competition
Marketing environment
Marketing planning
Professor Takada

53. Rest Stop: Reviewing the Concepts
Chapter 1
Rest Stop: Reviewing the Concepts
Define marketing and outline the steps in the marketing process.
Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts.
Identify the key elements of a customer-driven marketing strategy and discuss marketing management orientations that guide marketing strategy.
Discuss customer relationship management and strategies for building lasting customer relationships.
Describe the major trends and forces that are changing the marketing landscape in this new age of relationships.
Professor Takada