1. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–1 Part 1: Marketing strategy and management Chapter 1: Creating customer value and building relationships

2. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–2 When we finish this lecture you should Know what the term ‘marketing’ means and understand marketing in today’s business environment Understand the ‘marketing concept’ Recognise that marketing can be applied to services, ideas and ‘causes’ Understand the links between marketing and other functions Understand the place that marketing has in government and non-profit organisations Understand the concept of ethics in marketing Understand the particular needs of marketing in a global context

3. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–3 Things a company should do to produce bicycles Try to carry out the marketing concept – Maintain a customer orientation – All departments guided by customer needs – Focus on profit (or other overall) objective Do NOT just try to ‘unload’ what the company has produced

4. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–4 The importance of marketing Marketing influences many aspects of people’s daily lives – All goods and services they buy – Stores in which they purchase – Radio and TV programs they consume are paid for by advertising – CV they produce to impress potential employers Marketing offers exciting career paths Marketing is important to every organisation

5. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–5 The importance of marketing (continued) Marketing concepts and techniques are also relevant for non-profit companies Marketing plays a major role in economic growth and development by – Stimulating research and new ideas, resulting in new goods and services – Providing choice among products which may satisfy customers, resulting in fuller employment, higher incomes and higher standards of living

6. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–6 Defining marketing ‘The creation and delivery of a standard of living’ (Malcolm P.McNair, 1968; and John W. Barnes, 1996) More than merely ‘advertising and selling’ (Marketing: Creating and Delivering Value, 4/e, Quester et al. p. 7)

7. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–7 What is marketing? Macro-marketing – a process that directs an economy's flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the economic, legal, technological, political, environmental and social objectives of that society Micro-marketing – the performance of activities that collectively seek to accomplish an organisation's objectives by anticipating customer needs and directing a flow of need-satisfying goods and services from the producer to customer or client.

8. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–8 Production orientation Sales-orient ation Marketing department orientation Marketing company orientation Focus: each producer made products for themselves and neighbours Focus: sales turnover in the face of competition Focus: coordinate all customer contacts Focus: long-run customer satisfaction The evolution of marketing Societal marketing orientation Simple trade orientation Focus: ‘the good life’ Focus: if we can make it, it will sell

9. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–9 The marketing concept The idea than an organisation aims all of its efforts, in a coordinated and integrated manner, at simultaneously satisfying its customers and achieving its own corporate goals (Marketing: Creating and Delivering Value, 4/e, Quester et al. p. 10)

10. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–10 Figure 1.1 Organisations with a marketing orientation carry out the marketing concept

11. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–11 Exhibit 1.1a Demonstrating the satisfaction that a customer will derive from using a product or service is useful to attract consumers. COURTESY OF SWISSÔTEL.

12. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–12 Figure 1.2 The typical differences in outlook between marketing- and production-oriented management

13. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–13 The marketing concept and customer value The difference between the benefits a customer sees from a market offering and the costs of those benefits A good or service that does not meet a consumer’s needs results in low customer value, even if the price is very low A higher price may be acceptable if the desired benefits are obtained

14. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–14 The marketing concept and competition Competition cannot be ignored An organisation that offers superior customer value is likely to win and keep customers Often, the best way to improve customer value is to be the first to identify and satisfy a need that others have not even considered

15. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–15 The marketing concept and customer relationships Businesses that embrace the marketing concept seek ways to build a long-term relationship with each customer Even the most innovative company faces competition Luring a customer away from a competitor is more costly than retaining current customers Customer relationship management (CRM) – Information industry term for methodologies, software and Internet capabilities that help a company manage customer relationships in an organised way

16. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–16 Exhibit 1.2 REPRODUCED WITH THE PERMISSION OF HP/COMPAQ. Many businesses are becoming aware that existing customers are important for their survival.

17. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–17 Marketing and production Utility—the power to satisfy human needs Form utility—is provided when something tangible is produced Task utility—is provided when someone performs a task for someone else Time utility—having the product available when the customer wants it Place utility—having the product available where the customer wants it Possession utility—obtaining a good or service and having the right to use or consume it

18. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–18 Figure 1.3 Types of utility and how they are provided

19. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–19 Marketing and finance Even the best ideas about how to satisfy consumers better will not succeed unless there is enough capital to fund the marketing strategy The marketing manager and finance manager must work together to ensure that the company implements its marketing plans with the money that is available The financial wellbeing of the company also depends on the success of the marketing strategy

20. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–20 Marketing and accounting Accounting data helps managers track where costs and profits are coming from Marketing cost analysis usually requires new ways of classifying accounting data by function Functional costs are then redistributed by product or customer Accountants must realise that without sales there will be very little activity!

21. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–21 Marketing and human resources Many organisations that have identified a marketing opportunity will be unable to take advantage of it because they don’t have the right staff In service organisations the wrong person can undermine the best strategy and turn away consumers forever Change can unsettle employees; so, marketers must give full consideration to the impact of a new strategy on the people Communication—internal marketing

22. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–22 Marketing and information systems (MIS) Marketing managers must collect and analyse lots of information in order to make sound strategic decisions Marketers must also remain in touch with environmental changes Marketing managers should contribute to the design of information systems Marketers must be able to articulate clearly the specific benefits they seek from IT

23. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–23 Marketing and government and non- profit organisations The marketing concept is as important for non- profit organisations as it is for businesses Non-profit organisations need resources and support to survive and achieve their objectives Most non-profit organisations face competition Non-profit organisations must raise as much money as they spend Adopting the marketing concept can assist in developing a focus on the objectives that are achievable

24. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–24 Figure 1.4 Examples of the adoption of marketing by non-profit organisations

25. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–25 Social responsibility and ethics Social responsibility concerns an organisation’s obligation to improve its positive effects on society and reduce its negative effects Social responsibility sometimes requires compromise

26. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–26 Marketing ethics Marketing ethics are the moral standards that guide marketing decisions and actions Teleological view—assesses the moral worth of behaviour by its consequences – Egoism—individuals should focus solely on the consequences to themselves when making an ethical evaluation – Utilitarianism—concerned with an evaluation at the level of society

27. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–27 Marketing ethics (continued) Deontology—emphasises the importance of methods and intentions and judges individual acts by the nature of the act itself Relativism—no universal ethical rules exist that apply to everyone because all normative beliefs are a function of a culture or individual

28. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–28 Figure 1.5 Australian Marketing Institute’s Code of Professional Conduct

29. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–29 Global aspects of marketing Many Australian and New Zealand companies are exposed to foreign competitors—at home and overseas Companies have to operate more effectively to obtain new customers or retain existing ones Marketers can benefit by studying the marketing strategies of foreign competitors, for example the Asian and Japanese markets

30. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–30 What we will be doing in the next chapter The next chapter introduces the strategic marketing plan in some detail Marketing planning is the focus of the text

31. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–31 Figure 2.9 Framework and summary outline of the different sections of a marketing plan

32. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–32 Figure 2.9 Framework and summary outline of the different sections of a marketing plan (continued)

33. Copyright  2004 McGraw-Hill Australia Pty Ltd PPTs t/a Marketing 4/e by Quester, McGuiggan, Perreault and McCarthy 1–33 Figure 2.9 Framework and summary outline of the different sections of a marketing plan (continued)