3. ©2000 Prentice Hall Objectives ä Course Organization ä Tasks of Marketing ä Major Concepts & Tools of Marketing ä Marketplace Orientations ä Marketing’s Responses to New Challenges

4. ©2000 Prentice Hall Course/Text Organization ä Part I - Understanding Marketing Management ä Part II - Analyzing Marketing Opportunities ä Part III - Developing Marketing Strategies ä Part IV - Shaping the Market Offering ä Part V - Managing & Delivering Marketing Programs

5. ©2000 Prentice Hall Defining Marketing Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others. - Philip Kotler (p. 7)

6. ©2000 Prentice Hall Core Concepts of Marketing Product or Offering Value and Satisfaction Needs, Wants, and Demands Exchange and Transactions Relationships and Networks Target Markets & Segmentation Marketing Channels Supply Chain Competition Marketing Environment

7. ©2000 Prentice Hall Simple Marketing System Industry (a collection of sellers) Market (a collection of Buyers) Goods/services Money Communication Information

8. ©2000 Prentice Hall Manufacturer markets Services,money Government markets Services,money Services Services,money Taxes Taxes,goods Taxes,goods Taxes,goods MoneyMoney Consumer markets Intermediary markets Goods, services ResourcesResources Resource markets MoneyMoney Structure of Flows

9. ©2000 Prentice Hall The Four Ps Marketing Mix Product Price Promotion Place The Four Cs Customer Solution Customer Cost Communication Conven- ience

10. ©2000 Prentice Hall Production Concept Product Concept Selling Concept Marketing Concept Consumers prefer products that are widely available and inexpensive Consumers favor products that offer the most quality, performance, or innovative features Consumers will buy products only if the company aggressively promotes/sells these products Focuses on needs/ wants of target markets & delivering value better than competitors Company Orientations Towards the Marketplace

11. ©2000 Prentice Hall Market Integrated marketing Profits through customer satisfaction Customer needs (b) The marketing concept Factory Existing products Selling and promotion Profits through sales volume Starting point FocusMeansEnds (a) The selling concept Customer Delivered Value

12. ©2000 Prentice Hall Customers Front-line people Middle Management Top Management Traditional Organization Chart

13. ©2000 Prentice Hall Customer-Oriented Organization Chart Customers Front-line people Middle management Top manage- ment Customers

14. ©2000 Prentice Hall Evolving Views of Marketing’s Role a. Marketing as an equal function Finance Production Marketing Human resources b. Marketing as a more important function Finance Human resources Marketing Production

15. ©2000 Prentice Hall Evolving Views of Marketing’s Role c. Marketing as the major function Marketing Finance Human resources Production d. The customer as the controlling factor Customer Human resources Finance Production Marketing

16. ©2000 Prentice Hall Evolving Views of Marketing’s Role e. The customer as the controlling function and marketing as the integrative function Customer Marketing Production Human resources Finance

17. ©2000 Prentice Hall Review ä Course Organization ä Tasks of Marketing ä Major Concepts & Tools of Marketing ä Marketplace Orientations ä Marketing’s Responses to New Challenges

19. ©2000 Prentice Hall Objectives ä Define value & satisfaction - understand how to deliver them ä The nature of high-performance businesses ä How to attract & retain customers ä Improving customer profitability ä Total quality management

20. ©2000 Prentice Hall Determinants of Customer Delivered Value Image value Personnel value Services value Product value Total customer value Total customer value Monetary cost Time cost Energy cost Psychic cost Total customer cost Total customer cost Customer delivered value Customer delivered value

21. ©2000 Prentice Hall Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.

22. Resources Organization and aligning... High Performance Business Processes By improving critical business... Stake- holders Set strategies to satisfy key...

23. ©2000 Prentice Hall Margin The Generic Value Chain Primary Activities Support Activities Procurement Serv- ice Technology Development Human resource management Firm infrastructure Inbound Logistics Opera- tions Out- bound Logistics Market- ing and sales

24. ©2000 Prentice Hall Levi Strauss’ Value-Delivery Network Competition is between networks, not companies. The winner is the company with the better network. Delivery Sears (Retail) Sears (Retail) Levi’s (Apparel) Levi’s (Apparel) Order Delivery Order Customer Delivery Du Pont (Fibers) Du Pont (Fibers) Order Delivery Order Milliken (Fabric) Milliken (Fabric)

25. ©2000 Prentice Hall Satisfied Customers: ä Are loyal longer ä Buy more (new products & upgrades) ä Spread favorable word-of-mouth ä Are more brand loyal (less price sensitive) ä Offer feedback ä Reduce transaction costs

26. ©2000 Prentice Hall Levels of Relationship Marketing Many customers/ distributors Medium number of customers/ distributors Few customers/ distributors AccountableProactivePartnershipProactiveAccountableReactiveAccountableReactive Basic or reactive High margin Medium margin Low margin

27. ©2000 Prentice Hall Inactive or ex-customers Customer Development PartnersAdvocatesClients Repeat customers First-time customers Suspects Prospects Disqualified prospects

28. ©2000 Prentice Hall Customer/Product Profitability Analysis P1P1 Highly profitable product P2P2 Profitable product P3P3 Losing product P4P4 Mixed-bag product ProductsProducts + + + High profit customer + - Mixed-bagcustomer + - - Losing customer C1C1 C2C2 C3C3 Customers

29. ©2000 Prentice Hall The Profit Triangle Value creation Competitive advantage Internal operations ProfitProfit

30. ©2000 Prentice Hall Quality äQäQuality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs. #1

31. ©2000 Prentice Hall Review ä Define value & satisfaction - understand how to deliver them ä The nature of high-performance businesses ä How to attract & retain customers ä Improving customer profitability ä Total quality management