©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 0 in Chapter 2

Marketing in

21st Century

©2003 Prentice Hall, Inc.

The New Economy

Substantial increase in buying power

A greater variety of goods and services

A greater amount of information about

practically anything

A greater ease in interacting and placing and

receiving orders

An ability to compare notes on products and

services

To accompany A Framework for Marketing Management, 2nd Edition Slide 1 in Chapter 2

©2003 Prentice Hall, Inc.

The New Economy

Websites can provide companies with

powerful new information and sales channels.

Companies can collect fuller and richer

information about markets, customers,

prospects and competitors.

Companies can facilitate and speed up

communications among employees.

Companies can have 2-way communication

with customers and prospectsTo accompany A Framework for Marketing Management, 2nd Edition Slide 2 in Chapter 2

©2003 Prentice Hall, Inc.

The New Economy

Companies can send ads, coupons, samples,

information to targeted customers.

Companies can customize offerings and

services to individual customers.

The Internet can be used as a communication

channel for purchasing, training, and recruiting.

Companies can improve logistics and

operations for cost savings while improving

accuracy and service quality.To accompany A Framework for Marketing Management, 2nd Edition Slide 3 in Chapter 2

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 4 in Chapter 2

Changes in Business Practices

Old Economy

– Product unit organization

– Profitable transactions

– Financial scorecard

– Stockholders

– Marketing does the marketing

New Economy

– Customer segment organization

– Lifetime value of customer

– Marketing scorecard

– Stakeholders

– Everyone does the marketing

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 5 in Chapter 2

Changes in Business Practices

Old Economy

– Build brands via advertising

– Customer acquisition

– No customer satisfaction measurement

– Overpromise, underdeliver

New Economy

– Build brands via performance

– Customer retention

– Measure customer satisfaction and retention rates

– Underdeliver, overpromise

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 6 in Chapter 2

How Marketing Practices Are Changing: E-business

Internet Domains

B2C

B2B

C2C

C2B

B2C = Business-to-

Consumer

Benefits include:

greater ordering

convenience, lower

cost, easier

information and price

gathering

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 7 in Chapter 2

How Marketing Practices Are Changing: E-business

Internet Domains

B2C

B2B

C2C

C2B

B2B = Business-to-Business

Volume is 10-15% higher than B2C.

Benefits include: lower costs via B2B auctions, buying alliances, greater access to information.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 8 in Chapter 2

How Marketing Practices Are Changing: E-business

Internet Domains

B2C

B2B

C2C

C2B

C2C = Consumer-to-Consumer

Consumers are creating product information online via newsgroup and chat room dialogues.

Transactions occur via online trading sites such as

eBay.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 9 in Chapter 2

How Marketing Practices Are Changing: E-business

Internet Domains

B2C

B2B

C2C

C2B

C2B = Consumer-

to-Business

Facilitate

communication

between

customer and

businesses.

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 10 in Chapter 2

B2B Vs. B2C

B2B B2C

Small/Focused Target Market Large Target Market

Features/Functional/Education Benefits/Symbolic/Appeal

Rational….mostly Emotional…mostly

Less/Selective Media Consumption Multiple Touch Points

Long Lead Time/Multi Step ProcessShort Lead Time/Single Step

Process

Long Term Relationship Instantly Interesting

Create and Support Demand Drive Demand

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 11 in Chapter 2

How Marketing Practices Are Changing: CRM

Customer Relationship Marketing

(CRM) allows companies to:

–Deliver real-time customer service

–Customize market offerings,

products, services, media, and

messages

©2003 Prentice Hall, Inc. To accompany A Framework for Marketing Management, 2nd Edition Slide 12 in Chapter 2

How Marketing Practices Are Changing: CRM

Effective Customer Relationship Marketing requires:

– Reducing customer defection rates

– Extending the life of the customer relationship

– Enhancing customer sales / profit potential

– Making low-profit customers MORE profitable or terminating them

– Focusing on high value customers

©2003 Prentice Hall, Inc.

Marketing

Typically seen as the task of

creating, promoting, and

delivering goods and services to

consumers and businesses.

To accompany A Framework for Marketing Management, 2nd Edition Slide 13 in Chapter 2

©2003 Prentice Hall, Inc.

How Business andMarketing are Changing

Customers

Brand manufacturers

Store-based retailers

To accompany A Framework for Marketing Management, 2nd Edition Slide 14 in Chapter 2

©2003 Prentice Hall, Inc.

How Business andMarketing are Changing

To accompany A Framework for Marketing Management, 2nd Edition Slide 15 in Chapter 2

Company responses and adjustments

Reengineering

Outsourcing

Partner-suppliers

Market-centered

E-commerce

Benchmarking

Alliances

Global and local

Decentralized

©2003 Prentice Hall, Inc.

How Business andMarketing are Changing

To accompany A Framework for Marketing Management, 2nd Edition Slide 16 in Chapter 2

Marketer Responses and Adjustments

Customer relationship Marketing

Integrated marketing communications

Customer lifetime value

Customer share

Target marketing

Customization

Customer database

Channels as partners

Every employee a marketer

Model-based decision making