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Chapter 1:Customer-Driven Strategic Marketing

Pride/FerrellFoundations of MarketingFourth Edition

Prepared by Milton PressleyUniversity of New Orleans

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Objectives

1. Define marketing

2. Understand several important marketing terms including target market, marketing mix, marketing exchanges, and marketing environment

3. Be aware of the marketing concept and marketing orientation

4. Understand the importance of building customer relationships

5. Explain the major marketing functions that are a part of the marketing management process

6. Understand the role of marketing in our society

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Marketing Defined• Marketing is the process of creating,

distributing, promoting, and pricing goods, services, and ideas, to facilitate satisfying exchange relationships with customers and develop and maintain favorable relationships with stakeholders in a dynamic environment.

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Fig. 1.1 Components of Strategic Marketing

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Who is the Focus of Marketing?

• CustomersThe purchasers of organizations’ products; the focal point of all marketing activities.– The Target Market

• Old Navy focuses on its target market to meet their needs

• Who is their target market?

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Target MarketTarget Market-is a specific

group of customers on whom an organization focuses its marketing efforts.

Appealing to health-conscious customers

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The Marketing Mix Variables

Marketers combine and balance four elements when determining how to satisfy customers’ needs for a product:

• Product• Price• Distribution• Promotion

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Product Variable

A product can be a:

–Good

–Service

–Idea

Product

Petzl’s ad focuses on the quality, comfort, and

reliability of its climbing helmet

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Price Variable• Relates to decisions and actions associated with

establishing pricing objectives and policies• Relates to determining product prices• Determines the value of the exchange

Price

The Mini Cooper is promoted as being both

affordable to buy and economical on fuel

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Distribution Variable• Make products available in quantities desired• Minimize costs:

– Inventory

– Transportation

– Storage

• Select/motivate intermediaries• Establish/maintain inventory control• Develop/manage transportation and

storage systems

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Promotion Variable

• Inform individuals or groups about the organization and its products/services– Advertising– Public relations– Personal selling– Promotions– Street teams– Viral marketing

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Relationships with Customers• Exchange - the provision or transfer of

goods, services, or ideas in return for something of value

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StakeholdersConstituents who have a “stake,” or claim,

in some aspect of a company’s products, operations, markets, industry,

and outcomes.

The Customer asa Stakeholder Yoplait donates to breast cancer research.

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Marketing Environment• The six types of forces that surround the

customer and affect the marketing mix:– Economic forces– Political forces– Legal and regulatory forces– Technological forces– Socio-cultural forces– Competitive forces

• Unlike marketing-mix variables, an organization has no control over these forces

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Discussion QuestionDiscussion Question Pick a product that you want to market.

Discuss how each of the forces in the marketingenvironment willeffect your marketing mix.

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The Marketing Concept

• A managerial philosophy that an organization should try to provide products that satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals.

The Marketing Concept

SSI understands the importance of a customer orientation by listening to customers and providing great service

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The Evolution of the Marketing Concept

The marketing concept has changed over time:

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Marketing Orientation

An organization-wide commitment to researching and responding to

customer needs.

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Implementing the Marketing Concept• First, establish an information system to discover customers’ real needs

• Use the information to create satisfying products

• Coordinate all activities

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Managing Customer Relationships

• Relationship Marketing– Establishing long term mutually

satisfying, buyer/seller

relationships.

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Customer Relationship Marketing (CRM)

• Using information about customers to create marketing strategies that develop and sustain desirable customer relationships.

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Value-Driven Marketing

• Value-a customer’s subjective assessment of benefits relative to costs in determining the worth of a product.

Customer Benefits

Customer Costs

Value = –

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Marketing Management• The process of planning, organizing,

implementing, and controlling marketing activities to facilitate exchanges effectively and efficiently.

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Why Marketing Plays An Important Role in Our Global Economy

CreatesCreatesCareer Career

ProspectsProspects

Promotes WelfarePromotes Welfareof Consumers of Consumers

and Societyand Society

Connects Connects People People through through

TechnologyTechnology EnhancesEnhancesConsumer Consumer AwarenessAwareness

Fuels Fuels the Global the Global EconomyEconomy

Is Important Is Important to Businessto Business

and theand theEconomyEconomy

Is Used by Is Used by Non-ProfitsNon-Profits

Consumes LargeConsumes LargeProportion ofProportion of

Buyers’ DollarsBuyers’ Dollars

MarketingMarketing

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

After Reviewing This Chapter You Should:

1. Be able to define marketing2. Understand several important marketing terms

including target market, marketing mix, marketing exchanges, and marketing environment

3. Be aware of the marketing concept and marketing orientation

4. Understand the importance of building customer relationships

5. Explain the major marketing functions that are a part of the marketing management process

6. Understand the role of marketing in our society

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Key Concepts• Marketing

• Customers

• Target market

• Marketing mix

• Products

• Exchanges

• Stakeholders

• Marketing environment

• Marketing concept

• Marketing orientation

• Relationship marketing

• Customer relationship management (CRM)

• Value

• Marketing management