part one marketing strategy and customer relationships 1 an overview of strategic marketing

Part OnePart OneMarketing

Strategy and Customer

Relationships

11An Overview of Strategic Marketing

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Objectives

1. To be able to define marketing as focused on customers

2. To identify some important marketing terms, including target market, marketing mix, marketing exchanges, and marketing environment

3. To become aware of the marketing concept and marketing orientation


Objectives (cont’d)

4. To understand the importance of building customer relationships

5. To learn about the process of marketing management

6. To recognize the role of marketing in our society


Chapter Outline

• Defining Marketing

• Understanding the Marketing Concept

• Managing Customer Relationships

• Value-Driven Marketing

• Marketing Management

• The Importance of Marketing in Our Global Economy


Defining Marketing

• Marketing– The process of creating, distributing,

promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment

• Customers– The purchasers of organizations’ products;

the focal point of all marketing activities


Components of Strategic Marketing

FIGURE 1.1


Marketing Focuses on Customers

• Target Market– A specific group of customers on whom an

organization focuses its marketing efforts• Large or small customer groups• Single or multiple product markets• Single or multiple products• Local to global markets


Marketing Deals with Products, Distribution, Promotion, and Price

• The Marketing Mix– Four marketing activities—product,

distribution, promotion, and pricing—that a firm can control to meet the needs of customers within its target market

ProductProduct

DistributionDistribution

PromotionPromotion

PricingPricing

TargetTargetMarketMarket


Marketing Mix Variables

ProductProduct

DistributionDistribution

PromotionPromotion

PricingPricing

Goods, services, or ideas that satisfy customer needs

The ready, convenient, and timely availability of products

Activities that inform customers about the organization and its products

Decisions and actions that establish pricing objectives and policies and set product prices


Marketing Builds Satisfying Exchange Relationships

• Exchange– The provision or transfer of goods,

services, or ideas in return for something of value

FIGURE 1.2


Marketing Builds Satisfying Exchange Relationships (cont’d)

• Exchange Conditions– Two or more participants have something of value

that the other party desires.– Exchange provides mutual benefit/satisfaction.– Each party has confidence in the exchange value

of the other party’s offering.– Each party must meet the expectations of the

exchange to become trusted by the other parties.


Marketing Occurs in a Dynamic Environment

• Marketing Concept– A philosophy that an organization should

try to satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals

– Customer satisfaction• Analysis of customers’ current and long-term

needs• Analysis of competitors’ capabilities• Integration of firm’s resources


Evolution of the Marketing Concept

ProductProductOrientationOrientation

SalesSalesOrientationOrientation

MarketingMarketingOrientationOrientation

Late 19th century: efficient production of goods allowed firms to meet strong customer demand.

Mid-1920s–early 1950s: weakened demand required that products would have to be “sold.” (personal selling, advertising, and distribution was the focus)

Early 1950s–2000s: adopting a customer focus means a commitment to researching and responding to customer needs.

FIGURE 1.3


Implementing the Marketing Concept

• Becoming marketing oriented requires– Establishing an information system to discover

customers’ needs and using the information to create satisfying products.

– Coordinating all marketing activities by restructuring the organization.

– Obtaining the support of all managerial and staff levels in the organization.


Managing Customer Relationships

• Relationship Marketing– Establishing long-term, mutually satisfying

buyer-seller relationships allowing for cooperation and mutual dependency• Increased value of customer (loyalty) over time

results in increased profitability.


Managing Customer Relationships (cont’d)

• Customer Relationship Management (CRM)– Using information about customers to

create marketing strategies that develop and sustain desirable customer relationships• Identifying buying-behavior

patterns of customers• Using behavioral

information to focus on the most profitable customers


Value-Driven Marketing

• Value– A customer’s subjective assessment of benefits

relative to the costs in determining the worth of a product• Customer value = customer benefits – customer costs

– Customer benefits• Anything desired by the customer that is received in an

exchange

– Customer costs• Anything a customer gives up in an exchange for

benefits– Monetary price of the benefit– Search costs (time and effort) to locate the product– Risks associated with the exchange


Marketing Management

• Marketing Management– The process of planning, organizing,

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

– Effectiveness• The degree to which an exchange

helps an organization achieve its objectives

– Efficiency• The process of minimizing the

resources an organization must spend to achieve a specific level of desired exchanges


Marketing Management (cont’d)

• Planning– Assessing opportunities and resources– Determining marketing objectives– Developing a marketing strategy and plans for

implementation and control• How, when and by whom are marketing activities

performed?

• Organizing– Developing the internal structure of the marketing

unit• Functions, products, regions, customer types


Marketing Management (cont’d)

• Implementation– Coordinating marketing activities– Motivating marketing personnel– Developing effective internal communications

within the unit

• Control– Establishing performance standards– Comparing actual performance to established

standards– Reducing the difference between desired and

actual performance


Effective Marketing Control Process

• Provides for quick detection of differences in planned and actual performance

• Accurately monitors activities and is flexible enough to accommodate changes

• Incurs low process costs relative to the costs of a “no-control” situation

• Is understandable by both managers and subordinates.


The Importance of Marketing in Our Global Economy

• Marketing costs consume a sizable portion of buyers’ dollars

• Marketing is used in nonprofit organizations

• Marketing is important to business and the economy

• Marketing fuels our global economy


The Importance of Marketing in Our Global Economy (cont’d)

• Marketing knowledge enhances consumer awareness

• Marketing connects people through technology

• Socially responsible marketing can promote the welfare of customers and society

• Marketing offers many exciting career prospects


After reviewing this chapter you should:

• Be able to define marketing as focused on customers.

• Know the meaning of important marketing terms, including target market, marketing mix, marketing exchanges, and marketing environment.

• Be more aware of the marketing concept and marketing orientation.


After reviewing this chapter you should:

• Understand the importance of building customer relationships.

• Have learned about the process of marketing management.

• Recognize the important role of marketing in our society.

part one marketing strategy and customer relationships 1 an overview of strategic marketing

Documents

marketing concept

marketing builds

marketing activities

marketing environment

importance of marketing

marketing exchanges

marketing deals

marketing strategy