CREATING CUSTOMER

RELATIONSHIPS AND VALUE

THROUGH MARKETING

CHAPTER

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A Philosophy

An Attitude

A Perspective

A Management Orientation

A Set of Activities, including:

Products

Pricing

Promotion

Distribution

WHAT IS MARKETING?

WHAT IS MARKETING?

Marketing = Using Exchanges to Satisfy Needs

American Marketing Association Definition

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 goals.

The Concept of Exchange

The idea that people give up something to receive something

they would rather have.

Both buyer and seller are better off after the trade.

Market – All people with both the desire and ability to buy a specific product

Target Market – One or more subgroups I can satisfy

WHO DO I AIM AT?

THE CONTROLLABLE MARKETING FORCES

PricePrice

PromotionPromotion

PlacePlace

ProductProduct

The Four P’s-the “arrow”

SocialSocial

NaturalNatural

EconomicEconomic

TechnologicTechnologic

Political and LegalPolitical and Legal

CompetitiveCompetitive

External Environmental

Factors

External Environmental

Factors

THE UNCONTROLLABLE MARKETING FORCES

Helps identify market opportunities

FIGURE 1-AFIGURE 1-A Summary of factors that affect an organization’s marketing program

FIGURE 1-4FIGURE 1-4 Marketing’s task: satisfying consumer needs

HOW MARKETING BECAMESO IMPORTANT

• Evolution of the Market Orientation

Production Era

Societal Era

Sales Era

Marketing Concept Era

OrientationOrientation Key Ideas

ProductionProduction

SalesSales

MarketMarket

SocietalSocietal

Focus on efficiency of internal operations – if we make it, they will buy it

Focus on satisfying customer needs and wants

while meeting objectives - if they will buy it, we will make itFocus on satisfying customer needs and wants while enhancing individual and societal well-being. I.e.-mfg using recyclables

Focus on aggressive sales techniques and believe that high sales result in high profits

MARKETING MANAGEMENT PHILISOPHIES

FIGURE 1-BFIGURE 1-B Four different orientations in the history of American business

Societal

Who Buys and Uses What Is Marketed?

• Ultimate Consumers

•Organizational Buyers

THE BREADTH & DEPTH OF MARKETING

What Is Marketed?

• Goods • Services • Ideas

HOW DO CONSUMERS BENEFIT

Utility – the benefits or customer value received by users of the product

• Offer products that perform• Give consumers more than they expect

• Avoid unrealistic pricing• Give the buyer facts• Offer organization-wide commitment in service and after-sales support

Customer value-benefits received by targeted buyers that include quality, price, convenience, on-time delivery, and both before-sale and after-sale service.

HOW TO DELIVER VALUE

Meet or exceed customer’s expectations

Provide solutions to customer’s problems

Cultivate relationships, NOT one-time transactions

Meet or exceed customer’s expectations

Provide solutions to customer’s problems

Cultivate relationships, NOT one-time transactions

KEEPING THE CUSTOMER SATISFIED

1. What is marketing?

A: 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.

Concept Check

Concept Check

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

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 environmental forces?

A: Environmental forces are those that the organization’s marketing department can’t control. These include social, economic, technological, competitive, and regulatory forces.

Concept Check

1. What are the two key characteristics of the marketing concept?

A: (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization’s goals.

Concept Check

2. What is the difference between goods and services?

A: Goods are physical objects whereas services are complex intangible items, such as legal advice, a college education, or airline travel.

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

A market consists of people with both the desire and ability to buy a specific product.

A market consists of people with both the desire and ability to buy a specific product.

Market

Customer value is the unique combination of benefits receivedby targeted buyers that includes quality, price, convenience, on-time delivery, and both before-sale and after-sale service.

Customer value is the unique combination of benefits receivedby targeted buyers that includes quality, price, convenience, on-time delivery, and both before-sale and after-sale service.

Customer Value

The marketing concept is the idea that an organization should (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization’s goals.

The marketing concept is the idea that an organization should (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization’s goals.

Marketing Concept

An organization that has a market orientation focuses its efforts on(1) continuously collecting information about customers’ needs, (2) sharing this information across departments, and(3) using it to create customer value.

An organization that has a market orientation focuses its efforts on(1) continuously collecting information about customers’ needs, (2) sharing this information across departments, and(3) using it to create customer value.

Market Orientation

The societal marketing concept is the view that an organization should satisfy the needs of consumers in a way that provides for society’s well-being.

The societal marketing concept is the view that an organization should satisfy the needs of consumers in a way that provides for society’s well-being.

Societal Marketing Concept

Organizational buyers are those manufacturers, wholesalers, retailers,and government agencies that buy goods and services for their own use or for resale.

Organizational buyers are those manufacturers, wholesalers, retailers,and government agencies that buy goods and services for their own use or for resale.

Organizational Buyers

Utility is the benefits or customer value received by users of the product.Utility is the benefits or customer value received by users of the product.

Utility