marketing manageemnt

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Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Dr.SaravananDr.SaravananM.com.,M.com., M.Phil.,MBA.,MBA.,PGDCAM.Phil.,MBA.,MBA.,PGDCA., Ph.D.,., Ph.D.,

Associate Professor In Commerce CAAssociate Professor In Commerce CA




Part 1: Designing Customer Part 1: Designing Customer--

Oriented Marketing StrategiesOriented Marketing Strategies

1. Marketing: Creating Satisfaction

through Customer Relationships2. Strategic Planning and the

Marketing Process

3. The Marketing Environment,

Ethics, and Social Responsibility

4. E-Commerce: Marketing in the

Digital Age




Chapter 1Chapter 1

Marketing:Marketing:CreatingCreating

SatisfactionSatisfaction

through Customer through Customer RelationshipsRelationships



Copyright © 2006 by South-Western, a division of Thomson Learning, Inc. All rights reserved. 1-4

Chapter ObjectivesChapter Objectives

1. Explain how marketing creates utility through the

exchange process.2. Contrast marketing activities during the four eras in the

history of marketing.

3. Define the marketing concept and its relationship tomarketing myopia.

4. Describe the characteristics of not-for-profit marketing.

5. Describe the five types of nontraditional marketing.

6. Outline the changes in the marketing environment dueto technology.

7. Explain the shift from transaction-based marketing torelationship marketing.

8. Identify the universal functions of marketing.

9. Demonstrate the relationship between ethical businesspractices and marketplace success.




What is MarketingWhat is Marketing

Marketing creates utility through the exchange

process

Utility: Want-satisfying power of a good or

serviceForm utility

Time utility

Place utility

Ownership utility




Four Types of UtilityFour Types of Utility

Type Description Examples

Organizational

FunctionResponsible

Form Conversion of raw

materials and

components into finished

goods and services

J.P. Morgan Chase checking account;

Lincoln Navigator; Ramen Noodles

(nutrition for students who are hungry,

broke, and can·t³or won·t³cook)

Production

Time Availability of goods andservices when consumers

want them

Digital photographs; LensCrafterseyeglass guarantee; UPS Next Day Air

Marketing

Place Availability of goods and

services at convenient

locations

Soft-drink machines outside gas

stations; on-site day care; banks in

grocery stores

Marketing

Owner-

ship

Ability to transfer title to

goods or services from

marketer to buyer

Retail sales (in exchange for currency

or credit-card payment)Marketing




How to Create CustomersHow to Create Customers

Identifying customer needs

Designing goods and services that meetthose needs

Communicating information about thosegoods and services to prospective buyers

Making the goods or services available attimes and places that meet customers¶ needs

Pricing goods and services to reflect costs,competition, and customers¶ ability to buy

Providing for the necessary service andfollow-up to ensure customer satisfactionafter the purchase




A Definition of MarketingA Definition of MarketingMarketing: the process of planning and

executing the conception, pricing,

promotion, and distribution of ideas, goods,

services, organizations, and events tocreate and maintain relationships that will

satisfy individual and organizational

objectives.




American Marketing Association¶sAmerican Marketing Association¶s new official

definition of marketing released August 2004:

Marketing is an organizational function and a

set of processes for creating, communicating

and delivering value to customers and for managing customer relationships in ways that

benefit the organization and its stakeholders.




Why the change?Why the change?

From AM A 9/15/04 issue of Marketing News

The impetus to examine and possibly revise the official

definition came from AM A CEO Dennis Dunlap.

Currently, marketers are nearly unanimous in believing

that the industry is rapidly changing, though that was

not always the case.

The first official definition of marketing was adopted in

1935 by the National Association of Marketing

Teachers, a predecessor of the AM A. It was adoptedby the AM A in 1948, and again in 1960 when the AM A

revisited the definition and decided not to change it.

This original definition stood for 50 years, until it was

revised in 1985.




Both definitions also identify the marketing

variables that together provide customer satisfaction

ProductProduct

PricePrice

PromotionPromotion

DistributionDistribution

Creating customers that want to stay with you

is all about identifying needs, providing goodsand services that meet those needs, pricing,

and follow-up service.




Today¶s Global MarketplaceToday¶s Global MarketplaceInternational agreements increase

trade among nations

Growth of electronic commerce and

related computer technologies

Interdependence of the world¶s

economies




Four Eras in the History of MarketingFour Eras in the History of Marketing




Production EraProduction Era

Prior to 1920s

Production orientation

Business success often defined solely interms of production victories

Sales EraSales Era

Prior to 1950s

Customers resist nonessential goods and

servicesPersonal selling and advertising¶s task is to

convince them to buy




Marketing EraMarketing Era

Since 1950s Marketing Concept Emerges

Satisfying customer needs

Emergence of the Marketing ConceptEmergence of the Marketing Concept

Shift from seller¶s to buyer¶s market

Company±wide consumer orientation

Objective of achieving long±run success




Relationship EraRelationship EraBegan in 1990s

Carried customer orientation even further

Focuses on establishing and maintaining

relationships with both customers and

suppliers

Involves long±term, value±added

relationships




Converting Needs to WantsConverting Needs to Wants

The need for a vacation becomes a

desire to take Caribbean Holiday

The need for fitness becomes a desirefor exercise classes




Avoiding Marketing MyopiaAvoiding Marketing Myopia

Marketing Myopia is management¶s failureto recognize the scope of its business.

To avoid marketing myopia, companies

must broadly define organizational goals

toward consumer needsFocus on benefits




Extending the Traditional BoundariesExtending the Traditional Boundaries

of Marketingof Marketing

Marketing in not-for-profit organizations

Characteristics of not-for-profit marketing

Lack of a bottom line

Often market to multiple publics

May market both goods and services

Customer or service user may wield less

control over the organizations destiny thancustomers of profits seeking firms

Resource contributor may interfere with the

marketing program




Nontraditional MarketingNontraditional Marketing

Person Marketing

Place Marketing

Cause Marketing

Event Marketing

Organization Marketing




Person MarketingPerson Marketing

Efforts to cultivate the attention, interest, andpreferences of a target market toward a

celebrity or authority figure

Place MarketingPlace Marketing

Attempt to attract people and organizations to a

particular geographic area.

Cause MarketingCause Marketing

Identification and marketing of a social issue,cause, or idea to selected target markets




Event MarketingEvent MarketingThe marketing of sporting, cultural, and

charitable activities to selected targetmarkets

Organization MarketingOrganization MarketingInvolves attempts to influence others to

accept the goals of, receive the services of,or contribute in some way to an

organization.




Creativity and Critical ThinkingCreativity and Critical Thinking

Challenges presented by today¶s complex andtechnologically sophisticated marketing

environment require critical-thinking skills and

creativity from marketing professionals

Critical Thinking refers to the process of

determining the authenticity, accuracy, and worth

of information, knowledge, claims and arguments

Creativity helps to develop novel solutions to

perceived marketing problems




The Technology Revolution in MarketingThe Technology Revolution in Marketing

T echnology: Application to business of

knowledge based on scientific discoveries,

inventions, and innovations

Interactive marketingInteractive marketing refers to buyer-seller

communications in which the customer

controls the amount and type of informationreceived from a marketer




The InternetThe Internet is an all-purpose global network

composed of more than 50,000 different

networks around the globe that allows those

with access to a computer send and receive

images and text anywhere

The

W orld

W ide

W eb

Broadband technologyBroadband technology is extremely high

speed, always-on Internet connection

Wireless InternetWireless Internet connections for laptops

and PDA¶s

Interactive Television Service (iTV)Interactive Television Service (iTV)




How Marketers Use the WebHow Marketers Use the WebInteractive brochures

Online newsletters

Virtual storefronts

Information clearinghouses

Customer service tools




From TransactionFrom Transaction--BasedBased

Marketing to RelationshipMarketing to RelationshipMarketingMarketing

Transaction±based marketing

(Simple exchanges)

Relationship marketing

Lifetime value of a customer Converting new customers to

advocates




OneOne--toto--One MarketingOne Marketing Customized marketing program designed

to build long-term relationships withindividual customers.

Identifying a firm¶s best customers andincreasing their loyalty.

Developing Partnerships and StrategicDeveloping Partnerships and StrategicAlliancesAlliances

Strategic Alliances: partnershipsbetween organizations that createcompetitive advantages




Costs and Functions of MarketingCosts and Functions of Marketing




Ethics and Social Responsibility: DoingEthics and Social Responsibility: Doing

Well by Doing GoodWell by Doing Good

Increased Employee Loyalty

Better Public Image

Market Place Success

Improved Financial Performance




MKTG MGTMKTG MGT

MarketingMarketing

EnvironmentEnvironment




Marketing EnvironmentMarketing Environment

The market environment is a marketing term and refers

to all of the forces outside of marketing that affect

marketing management¶s ability to build and maintain

successful relationships with target customers.

The marketing environment surrounds and impacts upon

the organization. There are three key perspectives on

the marketing environment, namely the 'macro-environment,' the 'micro-environment' and the 'internal

environment'. .




The microThe micro--environmentenvironment

This environment influences the organization directly. It

includes suppliers that deal directly or indirectly,

consumers, and other local stakeholders.

In this context, micro describes the relationship between

firms and the driving forces that control this relationship.

It is a more local relationship, and the firm may exercise

a degree of influence.




The macroThe macro--environmentenvironment

This includes all factors that can influence the

organization, but that are out of their direct control.

A company does not generally influence any laws. It iscontinuously changing, and the company needs to be

flexible to adapt.

The wider environment is also ever changing, and themarketer needs to compensate for changes in culture,

politics, economics and technology.




The internal environment.The internal environment.

All factors that are internal to the organizationare known as the 'internal environment'. Theyare generally audited by applying the 'Five Ms'

which are Men, Money, Machinery, Materialsand Markets.

The internal environment is as important for

managing change as the external.

As marketers we call the process of managinginternal change ' internal marketing .'




Analyzing needs & Trends inAnalyzing needs & Trends in

the Macro Environmentthe Macro Environment

Successful companies recognize and respondprofitably to unmet needs & trends.

A trend is a direction or sequence of events thathave some momentum and durability.

One major trend is the increasing participation of women in workforce, which has spawned childday-care business, increased consumption of microwaveable foods and office-orientedwomen's clothing.




Identifying and Responding to theIdentifying and Responding to the

Major Macro environment ForcesMajor Macro environment Forces

The substantial speedup of international transportation,

communication, and financial transactions, leading to the

rapid growth of world trade and investment.

The rising economic power of several Asian countries in

world markets.

The rise of trade blocks such as the European Union andNAFTA signatories




Identifying and Responding to theIdentifying and Responding to the

Major Macro environment ForcesMajor Macro environment Forces The gradual opening of major new markets, namely

China, India, eastern Europe, the Arab countries, and

Latin America.

The movement of manufacturing capacity and skills to

lower cost countries.

The growth of global brands in autos, food, clothing,

electronics.




Major Macro environment ForcesMajor Macro environment Forces

Within the rapidly changing global picture, thefirm must monitor six major forces.

Demographic Environment

Economic Environment

Natural Environment

Technological Environment

Political Environment

Cultural Environment




The Company¶s MacroenvironmentThe Company¶s Macroenvironment




Demographic EnvironmentDemographic Environment

Demography is the study of human populations in

terms of size, density, location, age, gender, race,

occupation, and other statistics.

World Wide Population growth.

Population Age Mix.

Ethnic Markets.

Educational Groups.

House Hold Patterns.

Geographical Shift in population.




Economic EnvironmentEconomic Environment

The economic environment consists of factors that

affect consumer purchasing power and spending

patterns.

Income Distribution

Subsistence Economies.

Raw-material Exporting Economies.

Industrializing Economies.

Industrial Economies.

Savings, Debt and Credit Availability.




Natural EnvironmentNatural Environment

The natural environment consists of naturalresources required by marketers or affected

by marketing activities.

Shortage of Raw Materials.

Increased Energy Costs. Increased Pollution Levels.

Changing Role of Governments.




Technological EnvironmentTechnological Environment

Accelerating Pace of Change

Unlimited Opportunities for innovation .

Varying R&D Budgets.

Increased Regulation of Technological

Change .




PoliticalPolitical--Legal EnvironmentLegal Environment

The political environment is made up of laws,

government agencies, and pressure groups that

influence and limit the activities of various

organizations and individuals in society.

Legislation Regulating Business.

Growth of special Interest groups.

. Consumerist movement

Green and Environmental movements




SocialSocial--Cultural EnvironmentCultural Environment

Views of themselves

Views of others

Views of organizations

Views of society

Views of nature

Views of universe



SocialSocial--Cultural EnvironmentCultural Environment

High Persistence of CoreCultural Values .

Existence of subcultures .

Shifts of Secondary Cultural

Values Through Time .

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