Chap 1 Principles of Marketing

1-1
Fundamentals of Marketing
MRK 320
Mohamed Ben Nouri

TBS 2016
Chapter 1
 Marketing: Managing Profitable Customer
Relationships
Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Learning Goals
1-2
1. Define marketing and outline the marketing process.

2. Explain the importance of understanding customers and the
marketplace, and identify the five core marketplace
concepts
3. Identify the key elements of a customer-driven marketing
strategy and discuss the marketing management
orientations.
4. Discuss customer relationship management and identify
strategies for creating and capturing value from customers.
5. Describe the major trends and forces changing the
marketing landscape.
What Is Marketing?
1-3
 Marketing is about managing profitable customer

relationships
 Attracting new customers
 Retaining and growing current customers
 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”
The Marketing Process
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Core Marketing Concepts
1-5
Products
Needs, wants, and
and demands Services
Core
Marketing
Concepts
Markets
Value, satisfaction,
and quality
Exchange, transactions,
and relationships
Understanding the Marketplace
1-6
 Core Concepts  Need

 Understand the marketplace  State of felt deprivation
and customer wants and needs
 Wants
 Design a customer-driven
marketing strategy  The form of needs as shaped by
culture and the individual
 Construct a marketing
program that delivers superior  Demands
value  Wants which are backed by
 Build profitable relationships buying power
and create customer delight
 Capture value from customers
to create profits and customer
quality
1-7
 Core Concepts  Marketing offer

 Understand the marketplace
 Combination of
and customer wants and needs
(cont.) products, services,
 Design a customer-driven information or
marketing strategy experiences that
 Construct a marketing satisfy a need or
program that delivers superior want
value
 Build profitable relationships  Offer may include
and create customer delight services, activities,
 Capture value from customers people, places,
to create profits and customer information or ideas
quality
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 Core Concepts  Value

 Understand the marketplace and
customer wants and needs Customers form
(cont.) expectations regarding
 Design a customer-driven value
marketing strategy
 Construct a marketing program Marketers must deliver
that delivers superior value value to consumers
 Build profitable relationships
and create customer delight  Satisfaction
 Capture value from customers to A satisfied customer will buy
create profits and customer
quality again and tell others about
their good experience
1-9
 Core Concepts  Exchange

 Understand the marketplace  The act of obtaining a
and customer wants and needs desired object from someone
(cont.) by offering something in
 Design a customer-driven return
marketing strategy  One exchange is not the goal,
 Construct a marketing relationships with several
program that delivers superior exchanges are the goal
value  Relationships are built through
 Build profitable relationships delivering value and
and create customer delight satisfaction
quality
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 Core Concepts  Market

 Understand the marketplace
and customer wants and needs  Set of actual and
(cont.) potential buyers of a
 Design a customer-driven product
marketing strategy
 Construct a marketing  Marketers seek buyers
program that delivers superior that are profitable
value
 Build profitable relationships
and create customer delight
quality
1-11
Designing a Customer-Driven Marketing
Strategy
1-12
 Marketing management is “the art and science of

choosing target markets and building profitable
relationships with them.”
 A winning marketing strategy
 What customers will we serve?
 How can we serve these customers best?
Designing a Customer-Driven
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Marketing Strategy
 What customers will we serve?
 Market segmentation and target marketing
 Marketers select customers that can be served profitably
 Known as customer management and demand management
 How can we serve these customers best?

 By defining a value proposition that will differentiate and
position the brand in the marketplace
 Is set of benefits or values a company promises to deliver to
consumers in order to satisfy their needs
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Netflix – DVDs by mail
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 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
Marketing Management
Orientations
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Consumers favor products that are •
Production Concept available and highly affordable
Improve production and distribution•
Consumers favor products that offer •

Product Concept the most quality, performance, and
innovative features
Consumers will buy products only if •

Selling Concept the company promotes/ sells these
product
Focuses on needs/ wants of target •

Marketing Concept markets & delivering satisfaction
better than competitors
Focuses on needs/ wants of target •

Societal Marketing Concept markets & delivering superior value
Society’s well-being•
Marketing Management Orientations
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 Figure 1.3: The selling and marketing concepts

contrasted
Marketing Management Orientations
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 Figure 1.4: The Societal

Marketing Concept
 The marketing strategy should
deliver value to customers and
other stakeholders affected by
marketing decisions in a way
that maintains or improves the
consumer’s and the society’s
well-being.
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Preparing a Marketing Plan
and Program
1-20
 Build customer relationships by transforming the

marketing strategy into action
 Includes the marketing mix and the 4Ps of
marketing
 Product
 Price
 Place
 Promotion
Building Customer Relationships
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 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.”
1-22
Relationship Building Blocks:
Value and Satisfaction
1-23
 Customer 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.
This ad attempts
to change the
perceived value
of Cheerios
Cereal Bar by
helping
consumers
evaluate its
nutritional value
1-24
Customer Relationship
Levels and Tools
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 Basic relationships
 low margin customers
 Full partnerships
 key customers
 Frequency marketing programs
 Reward customers who buy frequently or in large amounts
 Club marketing programs
 Offer members special discounts and create member
communities
The Changing Nature of Customer
Relationships
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 Relating with more Carefully Selected Customers

 Relating for the Long-Term
 Relating Directly
Partnership Relationship Management
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 Working closely with partners in other company

departments and outside the company to jointly
bring greater value to customers
 Partners Inside the Company
 Partners Outside the Firm
 Strategicpartners
 Supply chain management
Capturing Value from Customers
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 Creating Customer Loyalty and Retention

 Customer delight leads to emotional relationships and
loyalty
 Customer lifetime value shows true worth of a customer
 Growing Share of Customer

 Share of customer’s purchase in a product category
 Achieved through offering greater variety, cross-sell
and up-sell strategies
Capturing Value from Customers
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 Building Customer Equity

 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
New Marketing Challenges
1-30
New
Marketing
Landscape &
Information Nonprofit
Technology Marketing
Emerging
Ethical
Concerns
Challenges Globalization
Changing
World
Economy
What Is Marketing?
1-31
 The process of building profitable customer

relationships by creating value for customers and
capturing value in return

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1-1

Mohamed Ben Nouri

1. Define marketing and outline the marketing process.

 Marketing is about managing profitable customer

 Core Concepts  Need

 Core Concepts  Marketing offer

 Core Concepts  Value

 Core Concepts  Exchange

 Core Concepts  Market

 Marketing management is “the art and science of

 Known as customer management and demand management

 How can we serve these customers best?

 Netflix began in early 2000

Consumers favor products that offer •

Consumers will buy products only if •

Focuses on needs/ wants of target •

Focuses on needs/ wants of target •

 Figure 1.3: The selling and marketing concepts

 Figure 1.4: The Societal

 Build customer relationships by transforming the

 CRM – Customer relationship management . . .

 Customer Perceived Value

 Relating with more Carefully Selected Customers

 Working closely with partners in other company

 Creating Customer Loyalty and Retention

 Growing Share of Customer

 Building Customer Equity

 The process of building profitable customer

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