1. Chapter 1 Marketing: Managing Profitable Customer Relationships

2. Learning Goals Define marketing and the marketing process.
Identify the five core marketplace concepts.
Identify the elements of a customer-driven marketing strategy.
Discuss customer relationship management and capturing value from customers.
Describe the major trends and forces changing the marketing landscape.

3. NASCAR –What is their secret?
Creating Value
Compelling blend of live racing events, media coverage and Web sites
Show the customer a good time
Create wholesome family-oriented environment
Capturing Value
Fans spend nearly $700 a year on NASCAR merchandise
Second highest regular season sport on TV
NASCAR attracts over 250 big-name sponsors
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4. Learning Goals Define marketing and the marketing process.
Identify the five core marketplace concepts.
Identify the elements of a customer-driven marketing strategy.
Discuss customer relationship management and capturing value from customers.
Describe the major trends and forces changing the marketing landscape.

5. What is Marketing? Marketing Defined:
“Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others”
Marketing is about managing profitable customer relationships
Attracting new customers
Retaining and growing current customers

6. The Marketing Process Figure 1-1
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7. Learning Goals Define marketing and the marketing process.
Identify the five core marketplace concepts
Identify the elements of a customer-driven marketing strategy
Discuss customer relationship management and capturing value from customers
Describe the major trends and forces changing the marketing landscape.

8. Understanding the Marketplace
Core Concepts
Need
State of felt deprivation
Wants
The form of needs as shaped by culture and the individual
Demands
Wants which are backed by buying power
Needs, wants, and demands
Marketing offers: including products, services and experiences
Value and satisfaction
Exchange, transactions and relationships
Markets

9. This very successful campaign reminds the consumer of a need
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Marketing in Action

10. Understanding the Marketplace
Core Concepts
Marketing offer
Combination of products, services, information or experiences that satisfy a need or want
Offer may include services, activities, people, places, information or ideas
Needs, wants, and demands
Marketing offers: including products, services and experiences
Value and satisfaction
Exchange, transactions and relationships
Markets

11. This ad offers a product to meet “sensitive” needs of the older child
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Marketing in Action

12. Understanding the Marketplace
Core Concepts
Value
Customers form expectations regarding value
Marketers must deliver value to consumers
Satisfaction
A satisfied customer will buy again and tell others about their good experience
Needs, wants, and demands
Marketing offers: including products, services and experiences
Value and satisfaction
Exchange, transactions and relationships
Markets

13. Discussion Questions Customer Satisfaction
When have you, personally, been extremely satisfied or dissatisfied with a product? Why?
Why is it so difficult for companies to deliver value to consumers?
Having students discuss their experience brings out product, pricing, promotion and distribution issues. It also highlights the importance of service and how every company is a service company. Ask them how many people they informed when dissatisfied vs. the number they informed when satisfied (dissatisfied is usually higher). You can also introduce perceived value here. It is also useful on the third question to talk about research and understanding needs, the difficulty in managing costs while delivering quality.
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Marketing in Action

14. Understanding the Marketplace
Core Concepts
Exchange
The act of obtaining a desired object from someone by offering something in return
One exchange is not the goal, relationships with several exchanges are the goal
Relationships are built through delivering value and satisfaction
Needs, wants, and demands
Marketing offers: including products, services and experiences
Value and satisfaction
Exchange, transactions and relationships
Markets

15. Understanding the Marketplace
Core Concepts
Market
Set of actual and potential buyers of a product
Marketers seek buyers that are profitable
Needs, wants, and demands
Marketing offers: including products, services and experiences
Value and satisfaction
Exchange, transactions and relationships
Markets

16. Learning Goals Define marketing and the marketing process.
Identify the five core marketplace concepts.
Identify the elements of a customer-driven marketing strategy.
Discuss customer relationship management and capturing value from customers.
Describe the major trends and forces changing the marketing landscape.

17. Marketing Management
Marketing management is “the art and science of choosing target markets and building profitable relationships with them.”
This definition must include answers to two questions:
What customers will we serve?
How can we serve these customers best?

18. Selecting Customers and Creating Value
What customers will we serve?
Known as customer management
Marketers select customers that can be served profitably
How can we serve these customers best?
By defining a value proposition
Includes the set of benefits or values a company promises to deliver to consumers in order to satisfy their needs

19. Click on pop up ad for website
Netflix – DVDs by Mail
Netflix began in early 2000
DVDs are delivered to your home with return mail envelope
Monthly charge with unlimited rentals – limited amount out at one time
Netflix is an Internet company which send you DVD’s through the mail. A monthly subscription brings you unlimited DVD’s per month at a specific amount out per time.
Click on pop up ad for website
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Marketing in Action

20. Discussion Questions Netflix
How might Netflix define its target market?
What need or want does it fulfill?
What is its marketing offer?
What is its value proposition? Is it a strong value proposition for its target market?
Its target market would be medium to heavy viewers of DVD. They consider a trip to the video store to be inconvenient. They probably include busy families of moderate income.
They fulfill the need for relaxation/entertainment/leisure and the want for DVD’s.
Their offer includes their selection of DVD’s, their shipping policies and procedures, and their customer service.
Their value proposition is very strong and includes the benefit of convenience, selection, and ample supply of DVDs on hand for viewing since you can have several in your house at once. Another benefit is the absence of late fees for the consumer.
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Marketing in Action

21. a strong competitor, entered this market a few years later
Netflix was first to the market but a good value proposition invites competition.
Walmart,
a strong competitor, entered this market a few years later
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Marketing in Action

22. Marketing Orientations
Selling concept
Marketing concept
Societal marketing concept
Production concept
Product concept

23. The Marketing Plan Transforms the marketing strategy into action
Includes the marketing mix and the 4P’s of marketing
Product
Price
Place
Promotion

24. Building Customer Relationships
CRM – Customer relationship management “is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, keeping and growing customers.”

25. Learning Goals Define marketing and the marketing process.
Identify the five core marketplace concepts.
Identify the elements of a customer-driven marketing strategy.
Discuss customer relationship management and capturing value from customers.
Describe the major trends and forces changing the marketing landscape.

26. Value and Satisfaction
Perceived Value
The customers’ evaluation of the difference between benefits and costs.
Customers often do not judge values and costs accurately or objectively.
Customer Satisfaction
Product’s perceived performance relative to customers’ expectations.

27. This ad attempts to change the perceived value of Cheerios Cereal Bar by helping consumers evaluate its nutritional value
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Marketing in Action

28. Not All Customers are Equal
Basic relationships
low margin customers
Full partnerships
key customers
Selective relationship management
weeding out unprofitable customers

29. Capturing Value from Customers
Key Concepts
Customer delight leads to emotional relationships and loyalty
Customer lifetime value shows true worth of a customer
Customer Loyalty and Retention
Share of Customer
Customer Equity

30. Capturing Value from Customers
Key Concepts
Share of customer’s purchase in a product category
Achieved through offering greater variety, cross-sell and up-sell strategies
Customer Loyalty and Retention
Share of Customer
Customer Equity

31. Capturing Value from Customers
Key Concepts
The combined customer lifetime values of all current and potential customers
Measures a firm’s performance, but in a manner that looks to the future
Choosing the “best” customers is key
Customer Loyalty and Retention
Share of Customer
Customer Equity

32. Learning Goals Define marketing and the marketing process.
Identify the five core marketplace concepts.
Identify the elements of a customer-driven marketing strategy.
Discuss customer relationship management and capturing value from customers.
Describe the major trends and forces changing the marketing landscape.

33. Marketing Landscape Challenges
Advances in computers, telecommunications information, transportation
Customer research and tracking
Product development
Distribution
New advertising tools
24/7 marketing through the Internet
Digital age
Globalization
Ethics and social responsibility
Not-for-profit marketing
Marketing relationships

34. Marketing Landscape Challenges
Geographical and cultural distances have shrunk
Greater market coverage
More options for purchasing and manufacturing
Increased competition from foreign competitors
Digital age
Globalization
Ethics and social responsibility
Not-for-profit marketing
Marketing relationships

35. Marketing Landscape Challenges
Marketers need to take great responsibility for the impact of their actions
Caring capitalism is a way to differentiate your company
Digital age
Globalization
Ethics and social responsibility
Not-for-profit marketing
Marketing relationships

36. This ad shows a company communicating its “Caring Capitalism”
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Marketing in Action

37. Marketing Landscape Challenges
Many organizations are realizing the importance of strategic marketing
Performing arts
Government agencies
Colleges
Hospitals
Churches
Digital age
Globalization
Ethics and social responsibility
Not-for-profit marketing
Marketing relationships

38. Click on screenshot for website
The Internet is increasing as a channel for not-for-profit marketers to raise funds
The United way uses print, direct marketing (mail and Internet) and employers for their drives. You can talk to students about whether it is ethical for companies to canvas employees. Also, the United Way has had problems in the past with high level executives overspending, and overhead charges that were excessive. You may ask students what responsibilities a not-for-profit has in addition to traditional corporate responsibility.
Click on screenshot for website
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Marketing in Action

39. Marketing Landscape Challenges
Profits through managing long-term customer equity
Improve customer knowledge
Target profitable customers
Keep profitable customers
Digital age
Globalization
Ethics and social responsibility
Not-for-profit marketing
Marketing relationships

40. What is Marketing?
The process of building profitable customer relationships by creating value for customers and capturing value in return

41. Expanded model of the marketing process Figure 1.6
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42. Learning Goals Define marketing and the marketing process.
Identify the five core marketplace concepts.
Identify the elements of a customer-driven marketing strategy.
Discuss customer relationship management and capturing value from customers.
Describe the major trends and forces changing the marketing landscape.