mktg 301 mktg 301 principles of marketing developing customer relationships and value through...
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MKTG 301MKTG 301Principles of Principles of
MarketingMarketing
DEVELOPING CUSTOMER
RELATIONSHIPS AND VALUE THROUGH
MARKETING
11CHAPTER
• Define marketing and explain the importance of (1) discovering and (2) satisfying consumer needs and wants.
• Distinguish between marketing mix elements and environmental factors.
AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:
• Understand how organizations build strong customer relationships using current thinking about customer value and relationship marketing.
• Describe how today’s market orientation differs from prior eras oriented to production and selling.
AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:
• Understand the meaning of ethics and social responsibility and how they relate to the individual, organizations, and society.
• Know what is required for marketing to occur and how it creates customer value and utilities for customers.
AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:
Would you sell more 43-inch Hitachi Big Screen HDTV
monitors for $ 1799 or $499 each?
• Being a Marketing Expert: Good News-Bad News• The Good News: You Already Have
Marketing Experience
• The Bad News: Surprises About the Obvious
WHAT IS MARKETING?
How would you define
marketing ?
Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
Marketing
Products and
Services
Value, satisfaction,and quality
Needs, wants,and demands
Exchange, transactions,and relationships
Markets
CoreMarketingConcepts
CoreMarketingConcepts
• Marketing: Using Exchanges to Satisfy Needs
• The Diverse Factors Influencing Marketing Activities
WHAT IS MARKETING?
EXCHANGE EXCHANGE
Exchange is the trade of things of value between buyer and seller so that each is better off after the trade.
Exchange is the trade of things of value between buyer and seller so that each is better off after the trade.
Exchange
Customers
Relationships
Environmental Forces
Shareholders(owners)
The OrganizationSociety Society
Suppliers
Social RegulatoryTechnologicalEconomic Competitive
OtherOrganizations
Alliances
Partnerships
OwnershipHuman
Resources
Researchand
Development
InformationSystems
Manufacturing
Finance Marketing
Management
FIGURE 1-3FIGURE 1-3 An organization’s marketing department relates to many people, groups, and forces
• Two or More Parties with Unsatisfied Needs
• Desire and Ability to Satisfy These Needs
• A Way for the Parties to Communicate
• Something to Exchange
Requirement for Marketing to Occur
• Discovering Consumer Needs• The Challenge of Launching Winning
New Products
• Consumer Needs and Consumer Wants
• What a Market Is
HOW MARKETING DISCOVERS AND SATISFIES CONSUMER NEEDS
How many new products are
launched each year in US?
What percentage succeed in the long
run ?
1. Make sure to focus on what the customer benefit is?
2. Learn key lessons from the past
Organization’smarketing department
Discover consumer needs and wants
Marketing’s first task:discovering consumer needs and wants
What Motivates a Consumerto Take Action?
• NeedsNeeds - states of felt deprivation including physicalphysical needs for food, socialsocial needs for belonging and individualindividual needs for self-expression. i.e. I am thirsty.
What Motivates a Consumerto Take Action?
• WantsWants - form that a human need takes as shaped by culture and individual personality. i.e. I want a Cola.
Wants- Is it enough?
Popularity is NOT the objective
Don’t want virtual consumption- the phenomenon that occurs when consumer love your products but don’t feel a need to buy it…..
What Motivates a Consumerto Take Action?
• DemandsDemands - human wants backed by buying power. i.e. I have money to buy a Coca-Cola.
What is Market ?
What is a Market?
Potential consumers make up a market, which is:
1.people
2.with the desire and
3.with the ability to buy a specific product.
One or more specific groups of potential customers toward which an organization directs its marketing program.
One or more specific groups of potential customers toward which an organization directs its marketing program.
Target Market
Organization’smarketing department
Discover consumer needs and wants
Information about needs and wants
Potential consumers: The market
Marketing’s first task:discovering consumer needs
and wants
Do you know too much about your consumer?
Marketers have always watch consumersasked questions, but what most marketerdon’t do is watch consumer CLOSELY enough
If you ignore a single bit of potentially valuable information about consumers you are wasting money.
• Who buys our product or service?
• Who initiates and makes the decision to purchase and who influences the process?
• How is the purchase decision made?
• What attributes or criteria are important to customers?
• What are customers’ perceptions of and attitudes
toward our company, product/service or brands?
• What factors influence the decision making process?
• Contact points where customers can be reached?
What should you know about your customers.
Organization’s marketing department
Discover consumer needs
Information about needs
Potential consumers: The market
Satisfy consumer needsFind the right combination of:
• Product• Price• Promotion• Place
Goods, services, ideas
Marketing’s second task: Satisfying consumer needs
Marketing Mix
Product Place
Price Promotion
C
Environmental Factors
Prom
otion
Competitiv
e force
s
Regulatory forces
Soci
al f
orce
s
Economic forces
PlacePrice
Pro
duct
Consumer
Marketingprogram
Technological forces
Concept Check
1. What is marketing?
A: Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.
2. Marketing focuses on __________ and ___________ consumer needs
Concept Check
discoveringsatisfying
Concept Check
3. What four factors are needed for marketing to occur?
A: (1) Two or more parties with unsatisfied needs, (2) a desire and ability on their part be satisfied, (3) a way for the parties to communicate, and (4) something to exchange.
Customer value is the unique combination of benefits received by targeted buyers that includes quality, price, convenience, on-timer delivery and both before-sale and after-sale service.
Customer value is the unique combination of benefits received by targeted buyers that includes quality, price, convenience, on-timer delivery and both before-sale and after-sale service.
Customer Value
• Global Competition, Customer Value, and Customer Relationships
• Relationship Marketing and the Marketing Program• Relationship Marketing: Easy to
Understand
• Relationship Marketing: Difficult to Implement
• The Marketing Program
THE MARKETING PROGRAM: HOW CUSTOMER RELATIONSHIPS ARE BUILT
The hallmark of developing and maintaining effective customer relationships is today called relationship marketing, linking the organization to its individual customers, employees, suppliers, and other partners for their long term benefit.
The hallmark of developing and maintaining effective customer relationships is today called relationship marketing, linking the organization to its individual customers, employees, suppliers, and other partners for their long term benefit.
Relationship Marketing
The marketing program is a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers.
The marketing program is a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers.
Marketing Program
• A Marketing Program for Rollerblade• Expanding the Market for Rollerblade
Skates
• Exploiting Strengths in Technology
THE MARKETING PROGRAM: HOW CUSTOMER RELATIONSHIPS ARE BUILT
1. An organization can’t satisfy the needs of all consumers, so it must focus on one or more subgroups, which are its ____________.target markets
Concept Check
Concept Check
2. What are the four marketing mix elements that make up the organization’s marketing program?
A: product, price, promotion, place
Concept Check
3. What are uncontrollable variables?
A: Environmental factors the organization’s marketing department can’t control. These include social, economic, technological, competitive, and regulatory forces.
FIGURE 1-7FIGURE 1-7 Four different orientations in the history of American business
Production EraProduction Era Get out production, cut the price.
If we can built a better product , the world will
beat a path to our door.
Company Orientations Towards Company Orientations Towards the Marketplacethe Marketplace
Marketing Myopia
Marketers should NEVER sell products to consumers!
• People buy holes, not drills!
• Fashion, status, reference groups approval, and warmth, but not coats!
The Marketing Myopia
Selling Concept EraSelling Concept Era
Get the customers to the fit the company’s
offering.
Company Orientations Company Orientations Towards the MarketplaceTowards the Marketplace
The marketing concept is the idea that an organization should strive to satisfy the needs of consumers, while also trying to achieve the organization’s goals.
The marketing concept is the idea that an organization should strive to satisfy the needs of consumers, while also trying to achieve the organization’s goals.
Marketing Concept
Marketing Concept EraMarketing Concept Era
Find wants and feel them
Company Orientations Company Orientations Towards the MarketplaceTowards the Marketplace
WE MAKE IT HAPPEN FOR YOU
HAVE IT YOUR WAY
TO FLY, TO SERVE
Marketing Concept
WE ARE NOT SATISFIED UNTIL YOU
ARE
MarketIntegratedmarketing
Profits throughcustomer
satisfactionCustomer
needs
(b) The marketing concept
FactoryExistingproducts
Selling andpromotion
Profits throughsales volume
Startingpoint Focus Means Ends
(a) The selling concept
An organization that has a market orientation focuses its efforts on continuously collecting information about customers’ needs and competitors capabilities, sharing this information across departments, and using the information to create customer value.
An organization that has a market orientation focuses its efforts on continuously collecting information about customers’ needs and competitors capabilities, sharing this information across departments, and using the information to create customer value.
Market Orientation
Market OrientationMarket Orientation
Company Orientations Company Orientations Towards the MarketplaceTowards the Marketplace
CompetitionCustomer
Balancing Customer and Competitor Orientation
Competitor DrivenCompetitor Driven
Customer DrivenCustomer Driven
Market OrientationMarket Orientation
Focuses on customer developments in designing its
marketing strategy and on delivering superior value to its
target customers.
Pays balanced attention both customers and competitors in
designing its marketing strategies
Moves mainly based on competitors’ actions and reactions
Customer relationship management is the process of identifying prospective buyers, understanding them intimately, and developing long-term perceptions of the organization and its offering so that buyers will choose them in the marketplace.
Customer relationship management is the process of identifying prospective buyers, understanding them intimately, and developing long-term perceptions of the organization and its offering so that buyers will choose them in the marketplace.
Customer Relationship Management (CRM)
• Ethics and Social Responsibility:Balancing the Interests of Different Groups• Ethics
• Social Responsibility Societal marketing concept Macromarketing Micromarketing
HOW MARKETING BECAME SO IMPORTANT
The societal marketing concept is the view that an organization should discover and satisfy the needs of its consumer in a way that also provides for society’s well-being.
The societal marketing concept is the view that an organization should discover and satisfy the needs of its consumer in a way that also provides for society’s well-being.
Societal Marketing Concept
Macromarketing looks at how the aggregate flow of a nation’s goods and services benefits society.
Macromarketing looks at how the aggregate flow of a nation’s goods and services benefits society.
Macromarketing
Micromarketing is how an individual organization directs its marketing activities and allocates its resources to benefit its customers.
Micromarketing is how an individual organization directs its marketing activities and allocates its resources to benefit its customers.
Micromarketing
• The Breadth and Depth of Marketing• Who Markets?
• What is Marketed?
HOW MARKETING BECAME SO IMPORTANT
Let’s watch some commercials
(Almost) Anything Can be Marketed
ConsumerGoods
andServices
ConsumerGoods
andServices
Business-to-
BusinessMarketing
Business-to-
BusinessMarketing
Idea,Place,People
Marketing
Idea,Place,People
Marketing
Not-For-Profit
Marketing
Not-For-Profit
Marketing
• The Breadth and Depth of Marketing (cont)• Who Buys and Uses What is Marketed?
Ultimate consumers Organizational buyers
• Who Benefits?
• How Do Consumers Benefit? Utility
HOW MARKETING BECAME SO IMPORTANT
Ultimate consumers are the people who use the goods and services purchased for a household.
Ultimate consumers are the people who use the goods and services purchased for a household.
Ultimate Consumer
Organizational buyers are units such as manufacturers, retailers, or government agencies that buy goods and services for their own use of for resale.
Organizational buyers are units such as manufacturers, retailers, or government agencies that buy goods and services for their own use of for resale.
Organizational Buyers
Who Benefits?
ConsumersConsumers CompanyCompany
SocietySociety
Utility is the benefit or customer value received by uses of a product.
Utility is the benefit or customer value received by uses of a product.
Utility
UtilityUtility
Form
Place
Time
Possession
Form
Place
Time
Possession
Examples of Marketing Actionsthat Create Utility
Examples of Marketing Actionsthat Create Utility
benefit provided by transforming raw materials into the finished (PRODUCTION)
benefit provided by making the products available where consumers want them
benefit provided by storing products until they need
benefit provided by allowing the consumer to own, use and enjoy the product
benefit provided by transforming raw materials into the finished (PRODUCTION)
benefit provided by making the products available where consumers want them
benefit provided by storing products until they need
benefit provided by allowing the consumer to own, use and enjoy the product
UTILITIES PROVIDING by MARKETING
1. Like Pillsbury and General Electric, many firms have gone through four distinct orientations for their businesses: starting with the __________ era and ending with today’s ________________ era.
Concept Check
productionmarket orientation
Concept Check
2. What are the two key characteristics of the marketing concept?
A: An organization should (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization’s goals.
Concept Check
3. In this book the term product refers to what three things?
A: Goods (physical products), services, and ideas