lecture 1 - managing profitable customer relationships and marketing environment
TRANSCRIPT
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7/27/2019 Lecture 1 - Managing Profitable Customer Relationships and Marketing Environment
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Introduction to Marketing andMarketing Environment
Lecture 1
Learning Goals
1. Define marketing and the marketingprocess.
2. Explain the importance of understandingcustomers and identify the five coremarketplace concepts
3. Identify the elements of a customer-drivenmarketing strategy and discuss themarketing management orientations.
4. Discuss customer relationship managementand creating value for and capturing valuefrom customers
5. Describe the major trends and forceschanging the marketing landscape
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What is Marketing?
Marketing Defined:
Marketing is a social and managerialprocess by which individuals and groupsobtain what they need and want throughcreating and exchanging value with others
Marketing is about managing profitablecustomer relationships
Attracting new customers
Retaining and growing current customers
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Understanding the Marketplace
Needs, wants, and demands
Marketing offers: includingproducts, services andexperiences
Value and satisfaction
Exchange, transactions andrelationships
Markets
Value
Customers form expectationsregarding value
Marketers must deliver value to
consumers
Satisfaction
A satisfied customer will buy
again and tell others about their
good experience
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Core Concepts
Understanding the Marketplace
Needs, wants, and demands
Marketing offers: includingproducts, services andexperiences
Value and satisfaction
Exchange, transactions andrelationships
Markets
Exchange
The act of obtaining a desired
object from someone by
offering something in return
One exchange is not the goal,
relationships with several
exchanges are the goal
Relationships are built through
delivering value and satisfaction
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Core Concepts
Understanding the Marketplace
Needs, wants, and demands
Marketing offers: includingproducts, services andexperiences
Value and satisfaction
Exchange, transactions andrelationships
Markets
Market
Set of actual and potential
buyers of a product
Marketers seek buyers that are
profitable
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Core Concepts
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Marketing Management
Marketing management is the art andscience of choosing target markets and
building profitable relationships withthem.
This definition must include answers to twoquestions:
What customers will we serve?
How can we serve these customers best?
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Selecting Customers and Creating
Value Customer Management
What customers will we serve?
Marketers select customers that can be served
profitably
Value Proposition
How can we serve these customers best?
Includes the set of benefits or values a company
promises to deliver to consumers to satisfy their
needs
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Marketing Management
Production concept
Product concept
Selling concept
Marketing concept
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Societal marketing concept
Marketing Orientations
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The Marketing Plan
Transforms the marketing strategy into
action
Includes the marketing mix and the 4Psof marketing
Product
Price
Place
Promotion
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Building Customer Relationships
CRMCustomer relationshipmanagement
The overall process of building andmaintaining profitable customerrelationships by delivering superiorcustomer value and satisfaction. It dealswith all aspects of acquiring, keeping andgrowing customers.
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Value and Satisfaction
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
Products perceived performance relative to
customers expectations.
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Not All Customers
are Equal
Basic Relationships
Low-margin customers
Full Partnerships
Key customers
Selective relationship management
Weeding out unprofitable customers
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Capturing Value from Customers
Customer Loyalty
and Retention
Share of Customer
Customer Equity
Customer delight
leads to emotional
relationships and
loyalty
Customer Lifetime
Value shows true
worth of a customer
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Key Concepts
Capturing Value from Customers
Customer Loyalty
and Retention
Share of Customer
Customer Equity
Share of customerspurchase in a product
category.
Achieved through
offering greater
variety, cross-sell and
up-sell strategies.
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Key Concepts
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Capturing Value from Customers
Customer Loyalty
and Retention
Share of Customer
Customer Equity
The combined customer
lifetime values of all current
and potential customers.
Measures a firms
performance, but in a
manner that looks to the
future.
Choosing the best
customers is key
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Key Concepts
Marketing Landscape
Digital age
Globalization
Ethics and social
responsibility
Not-for-profit marketing
Marketing relationships
Growth of the Internet
Advances intelecommunications,information,transportation Customer research and tracking
Product development
Distribution
New advertising tools
24/7 marketing through theInternet
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Challenges
Marketing Landscape
Digital age
Globalization
Ethics and social
responsibility
Not-for-profit marketing
Marketing relationships
Geographical and
cultural distances have
shrunk
Greater market coverage
More options for purchasing
and manufacturing
Increased competition from
foreign competitors
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Challenges
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Marketing Landscape
Digital age
Globalization
Ethics and social
responsibility
Not-for-profit marketing
Marketing relationships
Marketers need to
take greatresponsibility for the
impact of their actions
Caring capitalism is a way to
differentiate your company
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Challenges
Marketing Landscape
Digital age
Globalization
Ethics and social
responsibility
Not-for-profit marketing
Marketing relationships
Many organizations are
realizing the
importance of strategic
marketing
Performing arts
Government agencies
Colleges
Hospitals
Churches
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Challenges
Marketing Landscape
Digital age
Globalization
Ethics and social
responsibility
Not-for-profit marketing
Marketing relationships
Profits through
managing long-term
customer equity
Improve customer knowledge
Target profitable customers
Keep profitable customers
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Challenges
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What is Marketing?
The process of building profitable customer
relationships by creating value for
customers and capturing value in return
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Strategic Planning &
Marketing Environment
Strategic Planning
The process of developing andmaintaining a strategic fit between the
organizations goals and capabilities and its
changing marketing opportunities.
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Steps in Strategic Planning
1. Defining the company mission.
2. Setting company objectives and goals.3. Designing the business portfolio.
4. Planning marketing and other functional
strategies.
The Mission Statement
A statement of the organizations
purpose.
What it wants to accomplish in the larger
environment.
Should be market oriented and defined in
terms of customer needs.
The Mission Statement
Questions the mission statement shouldanswer include:
What is our business?
Who is our customer?
What do consumers value?
What should our business be?
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The Mission Statement:
Should be realistic.
Should be specific. Should fit the market environment.
Should be based on distinctive
competencies.
Should be motivating.
Designing the Business Portfolio
The business portfolio is the collection of
businesses and products that make up the
company.
The company must:
analyze its current business portfolio or Strategic
Business Units (SBUs),
decide which SBUs should receive more, less, or no
investment,
develop growth strategies for growth or downsizing.
Strategic Business Unit (SBU)
A unit of the company that has a separate
mission and objectives and that can be
planned independently from other
company businesses.
Can be a company division, a product line
within a division, or sometimes a single
product or brand.
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Marketings Role
in Strategic Planning
Provide a guiding philosophy
Identify attractive opportunities
Design effective strategies
Build strong value chains
Form superior value delivery networks
Product/Market Expansion Grid
Market Penetration
Existing markets, existing products
Market Development
New markets, existing products
Product Development
Existing markets, new products
Diversification
New products, new markets
Customers grouped by: Geographic
Demographic
Psychographic
Behavioral
Market segment is agroups of consumers whorespond in similar ways tomarketing efforts.
1. MarketSegmentation
2. Target marketing
3. MarketPositioning
Marketing Strategy
Strategy
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Evaluation of eachsegments attractiveness
Selection of segments withgreatest long-termprofitability
A company can chooseone or several segmentsto target
Marketing Strategy
Strategy
1. MarketSegmentation
2. Target marketing
3. MarketPositioning
The place the productoccupies in the consumersmind
Products are positionedrelative to competingproducts
Marketers look for clear,distinctive and desirable
place in positioning
Marketing Strategy
Strategy
1. MarketSegmentation
2. Target marketing
3. MarketPositioning
Marketing Mix
The marketing mix includes controllableand tactical marketing tools known as the
4Ps
The 4Ps include Product
Place
Promotion
Price
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SWOT Analysis
Strengths:
Internal capabilities that may help a
company reach its objectives.
Weaknesses:
Internal limitations that may interfere
with a companys ability to achieve its
objectives.
SWOT Analysis
Opportunities:
External factors that the company may be
able to exploit to its advantage.
Threats:
Current and emerging external factors
that may challenge the companys
performance.
Finding opportunities
Avoiding threats
Understandingstrengths
Analyzing weaknesses
Analysis
Planning
Implementation
Control
Managing the Marketing Effort
Marketing Functions
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Marketing plans include:
Executive summaryAnalysis of current situation
Objectives
Targets and positioning
Marketing mix
Budget
Controls
Managing the Marketing Effort
Marketing Functions
Analysis
Planning
Implementation
Control
Plans are turned intoaction with day-to-dayactivities
Good implementationis a challenge
Managing the Marketing Effort
Marketing Functions
Analysis
Planning
Implementation
Control
Evaluation of theresults of marketingstrategies
Checks for differencesbetween goals andperformance
Managing the Marketing Effort
Marketing Functions
Analysis
Planning
Implementation
Control
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Measuring Effectiveness
Return on marketing (marketing ROI)
The net return from a marketing investment
divided by the costs of the investments
The Marketing Environment
The Marketing Environment
Marketing Environment:
The actors and forces outside marketing that affectmarketing managements ability to build and maintainsuccessful relationships with target customers
Microenvironment
Includes the actors close to the company
Macroenvironment
Involves larger societal forces
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Marketing must consider
other parts of the
organization including
finance, R&D, purchasing,
operations and accounting
Marketing decisions must
relate to broader company
goals and strategies
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketingintermediaries
4. Customers
5. Competitors
6. Publics
Marketers must watch
supply availability and
pricing
Effective partnership
relationship management
with suppliers is essential
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketingintermediaries
4. Customers
5. Competitors
6. Publics
Help to promote, sell and
distribute goods to final
buyers
Include resellers, physical
distribution firms, marketing
services agencies and financial
intermediaries
Effective partner relationship
management is essential
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketingintermediaries
4. Customers
5. Competitors
6. Publics
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The five types of customermarkets
Consumer
Business
Reseller
Government
International
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketingintermediaries
4. Customers
5. Competitors
6. Publics
Conducting competitor
analysis is critical for
success of the firm
A marketer must monitor
its competitors offerings
to create strategic
advantage
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketingintermediaries
4. Customers
5. Competitors6. Publics
A group that has an actualor potential interest in orimpact on an organization
Seven publics include:
Financial
Media
Government
Citizen-action
Local
General
Internal
Microenvironment
Actors
1. The company
2. Suppliers
3. Marketingintermediaries
4. Customers
5. Competitors
6. Publics
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Macroenvironmental Forces
The Macroenvironment
Demographic
Economic
Natural
Technological
Political
Cultural
Demographic Environment
Demographic Environment:
The study of human populations in terms of
size, density, location, age, gender, race,
occupation and other statistics
Economic Environment
Changes in Income
1980sconsumption
frenzy
1990ssqueezed
consumer
2000svalue marketing
Income Distribution
Upper class
Middle class
Working class
Underclass
Consists of factors that affect consumerpurchasing power and spending patterns.
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Natural Environment
Natural Environment:
Involves the natural resources that are
needed as inputs by marketers or that are
affected by marketing activities
Trends
Shortages of raw materials
Increased pollution
Increased government intervention
Technological Environment
The most dramatic force shaping our destiny
Rapidly changing force which creates many
new marketing opportunities but also turns
many existing products extinct
Political Environment
Consists of laws, government agencies andpressure groups that influence or limit variousorganizations and individuals in a given society
Legislation affecting businesses worldwide hasincreased
Laws protect companies, consumers and the interestsof society
Increased emphasis on socially responsible actions
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Cultural Environment
Made up of institutions and other forces
that affect a societys basic values,perceptions, preferences and behaviors.
Responding to the
Marketing Environment
There are three kinds of companies:
those who make things happen, those
who watch things happen, and those who
wonder whats happened.