1. 1-1 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100Version: 11-10-04 PRINCIPLES OF MARKETING University of Management and Technology 1901 N. Fort Myer Drive Arlington, VA 22209 USA Phone: (703) 516-0035 Fax: (703) 516-0985 Website: www.umtweb.edu

2. 1-2 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100Version: 11-10-04 CHAPTER 1: Marketing in a Changing World: Creating Customer Value and Satisfaction Armstrong, G. & Kotler, P. Marketing: An Introduction (6th ed.) Prentice Hall © 2003.

3. 1-3 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Road Map: Previewing the Concepts Define what marketing is and discuss its core concepts. Explain the relationships between customer value, satisfaction, and quality. Define marketing management and understand how marketers manage demand and build profitable customer relationships. Compare the five marketing management philosophies. Analyze the major challenges facing marketers heading into the new “connected” millennium.

4. 1-4 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu What is Marketing? What is Marketing? Simply put: Marketing is the delivery of customer satisfaction at a profit. Goals: Attract new customers by promising superior value and keep and grow current customers by delivering satisfaction.

5. 1-5 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Core Marketing Concepts (Fig. 1-1)

6. 1-6 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Marketing Defined Process by which individuals and groups obtain what they need need and want through creating and exchanging products value with others.

7. 1-7 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu What are Consumers’ Needs, Wants, and Demands? Needs Needs - state of felt deprivation including physical, social, and individual needs i.e hunger Wants Wants - form that a human need takes as shaped by culture and individual personality i.e. bread Demands Demands - human wants backed by buying power i.e. money

8. 1-8 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Experiences Persons Products Anything that can be Offered to a Market to Satisfy a Need or Want Products Anything that can be Offered to a Market to Satisfy a Need or Want Places Organizations Ideas Activities What Will Satisfy Consumers’ Needs and Wants? Services Activity or Benefit Offered for Sale That is Essentially Intangible and Doesn’t Result in the Ownership of Anything Services Activity or Benefit Offered for Sale That is Essentially Intangible and Doesn’t Result in the Ownership of Anything

9. 1-9 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu How Do Consumers Choose Among Products and Services? Total Quality Management Involves Improving the Quality of Products, Services, and Business Processes Product’s Perceived Performance in Delivering Value Relative to Buyer’s Expectations is Customer Satisfaction Value Gained From Owning a Product and Costs of Obtaining the Product is Customer Value

10. 1-10 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.eduExchanges Transactions Relationships Building a Marketing Network by Adding: Financial Benefits Social Benefits Structural Ties Profitable Customers How Do Consumers Obtain Products and Services?

11. 1-11 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Modern Marketing System (Fig. 1-2)

12. 1-12 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Marketing Management Attracting new customers and retaining and building relationships with current customers Profitable Customer Relationships Finding and increasing demand, also changing or reducing demand such as in Demarketing Demand Management Involves managing demand, which involves managing customer relationships Marketing Management

13. 1-13 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Stage 1. Entrepreneurial Marketing Stage 2. Formulated Marketing Stage 3. Intrepreneurial Marketing Marketing Management Practice

14. 1-14 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Production Concept Product Concept Selling Concept Marketing Concept Societal Marketing Concept Marketing Management Philosophies

15. 1-15 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Marketing and Sales Concepts Contrasted (Fig. 1-3)

16. 1-16 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Societal Marketing Concept (Fig. 1-4) http://www.johnsonandjohnson.com/

17. 1-17 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Marketing Challenges in the New “Connected” Millennium (Fig. 1-5)

18. 1-18 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Learn About & Track Customers With Databases Communicate With Customers in Groups Or One-on-One Create Products & Services Tailored to Meet Customer Needs Distribute Products More Efficiently & Effectively Connecting Technologies in Computers, Telecommunications, Information, & Transportation Help To: Technologies for Connecting

19. 1-19 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu The Internet The Internet has been hailed as the technology behind a New Economy. New applications include: “click-and-mortar” companies “click-only” companies Business-to-business e-commerce Business-to-business transactions online are expected to reach $3.6 trillion in 2003. By 2005, 500,000 companies will use the Internet to do business.

20. 1-20 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Connections With Customers Most marketers are targeting fewer, potentially more profitable customers. Asking: What value does the customer bring to the organization? Are they worth pursuing? Connecting for a customer’s lifetime.

21. 1-21 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu BankOne (Marketing at Work 1-3) BankOne focuses on connecting with customers they can serve profitably. Premier One customers know that they are “special, exclusive, privileged, valued.” http://www.bankone.com/

22. 1-22 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Direct Connections With Customers Many companies use technologies to let them connect more directly with their customers. Products available via telephone, mail-order catalogs, kiosks and e-commerce. Some firms sell only via direct channels (i.e. Dell Computer, http://www.amazon.com/), others use a combination. http://www.amazon.com/ Direct marketing is redefining the buyer’s role in connecting with sellers. Buyers are active participants in shaping the marketing offer and process; some buyers design their own products online such as at http://www.landsend.com/.http://www.landsend.com/

23. 1-23 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Connections With Marketing’s Partners Connecting Inside the Company Every employee must be customer-focused Teams coordinate efforts toward customers Connecting With Outside Partners Supply Chain Management Strategic Alliances

24. 1-24 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Connections With the World Around Us Global Connections Value Connections Social Responsibility Connections Broadening Connections

25. 1-25 Visit UMT online at www.umtweb.edu © UMT 2004 MKT100 Visit UMT online at www.umtweb.edu Version: 11-10-04 Visit UMT online at www.umtweb.edu Rest Stop: Reviewing the Concepts Define what marketing is and discuss its core concepts. Explain the relationships between customer value, satisfaction, and quality. Define marketing management and examine how marketers manage demand and build profitable customer relationships. Compare the five marketing management philosophies. Analyze the major challenges facing marketers heading into the next millennium.