Kotl Pom 7ce PPT Bas 01

Chapter1
Marketing:
Managing Profitable
Customer
Relationships
Copyright © 2008 Pearson Education Canada Principles of Marketing, Seventh Canadian Edition
Learning Goals
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.
Copyright © 2008 Pearson Education Canada 1-2 Principles of Marketing, Seventh Canadian Edition
NASCAR –What is their secret?
• NASCAR is the #1 • Fans are passionate about

televised motorsport in NASCAR
Canada • Fans spend nearly $700 a
• Compelling blend of live year on NASCAR
racing events, media merchandise
coverage and Web sites • Second highest regular
• Show the customer a season sport on TV
good time • NASCAR attracts over
• To develop customer 250 big-name sponsors
relationship NASCAR • Big part of the NASCA
creates a wholesome experience is the feeling
family-oriented of accessibility
environment.
Learning Goals
from customers.
What is Marketing?
• 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”
Learning Goals
from customers.
Understanding the
Marketplace
• Core Concepts • Need
– Understand the marketplace – State of felt deprivation
and customer wants and • Wants
needs
– The form of needs as shaped
– Design a customer-driven
by culture and the
marketing strategy
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
Understanding the
Marketplace
• 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 – Offer may include
– Build profitable relationships services, activities,
people, places,
to create profits and customer information or
quality ideas
Understanding the
Marketplace
• Core Concepts • Value
– Understand the marketplace
and customer wants and –Customers form
needs (cont.) expectations regarding
– Design a customer-driven value
marketing strategy
–Marketers must deliver
program that delivers superior value to consumers
value
– Build profitable relationships
• Satisfaction
and create customer delight –A satisfied customer will
– Capture value from customers buy again and tell others
quality
about their good
experience
Discussion Questions Customer
Satisfaction
• When have you,
personally, been
extremely satisfied or
dissatisfied with a
product? Why?
• Why is it so difficult
for companies to
deliver value to
consumers?
Understanding the
Marketplace
• Core Concepts • Exchange
– Understand the marketplace – The act of obtaining a
and customer wants and desired object from
needs (cont.) someone by offering
– Design a customer-driven something in return
marketing strategy – One exchange is not the
– Construct a marketing goal, relationships with
program that delivers superior several exchanges are the
value goal
– Build profitable relationships – Relationships are built
and create customer delight through delivering value
– Capture value from customers and satisfaction
quality
Understanding the
Marketplace
• Core Concepts • Market
– Understand the marketplace
and customer wants and – Set of actual and
needs (cont.) potential buyers of a
– Design a customer-driven product
marketing strategy
– Marketers seek buyers
program that delivers superior that are profitable
value
– Build profitable relationships
quality
Learning Goals
from customers.
Designing a Customer-Driven
Marketing Strategy
• 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
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
Netflix – DVDs by mail
• 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
Discussion Questions
Netflix
1. How might Netflix
define its target market?
2. What need or want does
it fulfill?
3. What is its marketing
offer?
4. What is its value
proposition? Is it a
strong value
proposition for its target
market?
Marketing Management
Orientations
• The Production Concept
– Consumers will favour products that are
available and highly affordable
• The Product Concept
– Consumers will favour products that offer the
most in quality, performance, and innovative
features
Orientations
• The Selling Concept
– Consumers will not buy enough of the firm’s
products unless it undertakes a large-scale
selling effort.
• The Marketing Concept
– Achieving organizational goals depends on
knowing the needs and wants of target
markets and delivering the desired
satisfactions better than competitors do.
Orientations
• 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.
Preparing a Marketing Plan
and Program
• Build customer relationships by
transforming the marketing strategy into
action
• Includes the marketing mix and the 4P’s of
marketing
– Product
– Price
– Place
– Promotion
Learning Goals
from customers.
Building Customer
Relationships
• 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.”
Relationship Building Blocks:
Value and Satisfaction
• 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.
Customer Relationship
Levels and Tools
• 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
• Relating with more Carefully Selected
Customers
• Relating for the Long-Term
• Relating Directly
Partnership Relationship
Management
• 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
– Strategic partners
– Supply chain management
Capturing Value from Customers
• 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
• 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
• The company can classify customers
according to their potential profitability
and manage its relationships accordingly.
Learning Goals
from customers.
The New Marketing Landscape
• Challenges • Advances in
– The Digital Age computers,
– Rapid Globalization telecommunications
– Ethics and Social information,
responsibility transportation
– Not-for-profit Marketing – Customer research and
tracking
– Product development
– Distribution
– New advertising tools
– 24/7 marketing through the
Internet
• Challenges • Geographical and
– The Digital Age cultural distances
– Rapid Globalization have shrunk
– Ethics and Social – Greater market
responsibility coverage
– Not-for-profit Marketing – More options for
purchasing and
manufacturing
– Increased competition
from foreign
competitors
• Challenges • Marketers need to
– The Digital Age take great
– Rapid Globalization responsibility for the
– Ethics and Social impact of their actions
responsibility – Caring capitalism is a way
to differentiate your
– Not-for-profit Marketing company
• Challenges • Many non-profit
– The Digital Age organizations are
– Rapid Globalization realizing the
– Ethics and Social importance of
responsibility strategic marketing
– Not-for-profit Marketing – Performing arts
– Government agencies
– Colleges
– Hospitals
– Churches
What is Marketing?
• The process of building profitable
customer relationships by creating value
for customers and capturing value in
return
Learning Goals
from customers.

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Chapter1

• NASCAR is the #1 • Fans are passionate about

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