1. Chapter One Marketing: Managing Profitable Customer Relationships

2. 1-2 Lecture Plan 1.What is Marketing? 2.The Marketing Process 3.Needs, Wants, and Demands 4.Marketing Myopia 5.Value and Satisfaction 6.Exchange vs Transaction 7.What is a Market? 8.Modern Marketing Systems 9.Marketing Management 10.Value Proposition 11.Marketing Management Philosophies

3. 1-3 What Is Marketing? Simple Definition: Marketing is managing profitable customer relationships. Goals: 1.Attract new customers by promising superior value. 2.Keep and grow current customers by delivering satisfaction.

4. 1-4 Marketing Defined  A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. OLD View of Marketing: Making a Sale – “Telling & Selling” New View of Marketing: Satisfying customer needs NEW View of Marketing: Satisfying Customer Needs

5. 1-5 Lecture Plan 1.What is Marketing? 2.The Marketing Process 3.Needs, Wants, and Demands 4.Marketing Myopia 5.Value and Satisfaction 6.Exchange vs Transaction 7.What is a Market? 8.Modern Marketing Systems 9.Marketing Management 10.Value Proposition 11.Marketing Management Philosophies

6. 1-6 The Marketing Process  A simple model of the marketing process: –Understand the marketplace and customer needs and wants. –Design a customer-driven marketing strategy (4 Ps – Marketing Mix). –Construct a marketing program that delivers superior value. –Build profitable relationships and create customer delight. –Capture value from customers to create profits and customer quality.

7. 1-7 Lecture Plan 1.What is Marketing? 2.The Marketing Process 3.Needs, Wants, and Demands 4.Marketing Myopia 5.Value and Satisfaction 6.Exchange vs Transaction 7.What is a Market? 8.Modern Marketing Systems 9.Marketing Management 10.Value Proposition 11.Marketing Management Philosophies

8. 1-8 Needs, Wants, & Demands  Need: State of felt deprivation including physical, social, and individual needs. –Physical needs: Food, clothing, shelter, safety –Social needs: Belonging, affection –Individual needs: Learning, knowledge, self-expression

9. 1-9 Needs, Wants, & Demands  Wants: Form that a human need takes, as shaped by culture and individual personality.  Wants + Buying Power = Demand

10. 1-10 Need / Want Fulfillment  Needs and wants are fulfilled through a Marketing Offer: Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

11. 1-11 Need / Want Satisfiers  Products: –Persons –Places –Organizations –Information –Ideas  Services –Activity or benefit offered for sale that is essentially intangible and does not result in ownership.

12. 1-12 Lecture Plan 1.What is Marketing? 2.The Marketing Process 3.Needs, Wants, and Demands 4.Marketing Myopia 5.Value and Satisfaction 6.Exchange vs Transaction 7.What is a Market? 8.Modern Marketing Systems 9.Marketing Management 10.Value Proposition 11.Marketing Management Philosophies

13. 1-13 Marketing Myopia  Marketing myopia occurs when 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.”

14. 1-14 Lecture Plan 1.What is Marketing? 2.The Marketing Process 3.Needs, Wants, and Demands 4.Marketing Myopia 5.Value and Satisfaction 6.Exchange vs Transaction 7.What is a Market? 8.Modern Marketing Systems 9.Marketing Management 10.Value Proposition 11.Marketing Management Philosophies

15. 1-15 Value & Satisfaction  Care must be taken when setting expectations: –If performance is lower than expectations, satisfaction is low. –If performance is higher than expectations, satisfaction is high.

16. 1-16 Lecture Plan 1.What is Marketing? 2.The Marketing Process 3.Needs, Wants, and Demands 4.Marketing Myopia 5.Value and Satisfaction 6.Exchange vs Transaction 7.What is a Market? 8.Modern Marketing Systems 9.Marketing Management 10.Value Proposition 11.Marketing Management Philosophies

17. 1-17 Exchange vs. Transaction  Exchange: –Act of obtaining a desired object from someone by offering something in return.  Transaction: –A trade of values between two parties. –One party gives X to another party and gets Y in return. Can include cash, credit, or check.

18. 1-18 Lecture Plan 1.What is Marketing? 2.The Marketing Process 3.Needs, Wants, and Demands 4.Marketing Myopia 5.Value and Satisfaction 6.Exchange vs Transaction 7.What is a Market? 8.Modern Marketing Systems 9.Marketing Management 10.Value Proposition 11.Marketing Management Philosophies

19. 1-19 What Is a Market?  The set of actual and potential buyers of a product.  These people share a need or want that can be satisfied through exchange relationships.

20. 1-20 Lecture Plan 1.What is Marketing? 2.The Marketing Process 3.Needs, Wants, and Demands 4.Marketing Myopia 5.Value and Satisfaction 6.Exchange vs Transaction 7.What is a Market? 8.Modern Marketing Systems 9.Marketing Management 10.Value Proposition 11.Marketing Management Philosophies

21. 1-21 Modern Marketing Systems  Main elements in a modern marketing system include: –Suppliers –Company (marketer) –Competitors –Marketing intermediaries –Final users

22. 1-22 Lecture Plan 1.What is Marketing? 2.The Marketing Process 3.Needs, Wants, and Demands 4.Marketing Myopia 5.Value and Satisfaction 6.Exchange vs Transaction 7.What is a Market? 8.Modern Marketing Systems 9.Marketing Management 10.Value Proposition 11.Marketing Management Philosophies

23. 1-23 Marketing Management  The art and science of choosing target markets and building profitable relationships with them. –Requires that consumers and the marketplace be fully understood

24. 1-24 Marketing Management  Designing a winning marketing strategy requires answers to the following questions: 1. What customers will we serve? What is our target market? 2. How can we best serve these customers? What is our value proposition?

25. 1-25 Marketing Management  Demand Management –Finding and increasing demand, also changing or reducing demand, as in demarketing.  Demarketing –Temporarily or permanently reducing the number of customers or shifting their demand.

26. 1-26 Lecture Plan 1.What is Marketing? 2.The Marketing Process 3.Needs, Wants, and Demands 4.Marketing Myopia 5.Value and Satisfaction 6.Exchange vs Transaction 7.What is a Market? 8.Modern Marketing Systems 9.Marketing Management 10.Value Proposition 11.Marketing Management Philosophies

27. 1-27 Value Proposition  The set of benefits or values a company promises to deliver to consumers to satisfy their needs. –Value propositions dictate how firms will differentiate and position their brands in the marketplace.

28. 1-28 Lecture Plan 1.What is Marketing? 2.The Marketing Process 3.Needs, Wants, and Demands 4.Marketing Myopia 5.Value and Satisfaction 6.Exchange vs Transaction 7.What is a Market? 8.Modern Marketing Systems 9.Marketing Management 10.Value Proposition 11.Marketing Management Philosophies

29. 1-29 Marketing Management Philosophies  Production Concept  Product Concept  Selling Concept  Marketing Concept  Societal Marketing Concept

30. 1-30 The Marketing Plan  Transforms the marketing strategy into action  Includes the marketing mix and 4 P’s of marketing: –Product –Price –Place (Distribution) –Promotion