armstrong mai12 inppt 01-213664

Copyright © 2015 Pearson Education, Inc.

Mrs. Nana Yaa A. [email protected]

Office HoursThursdays2:00pm-5:00pm


Learning Objectives

• Define marketing and outline the steps in the marketing process.

• Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts.

• Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy.

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Learning Objectives

• Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return.

• Describe the major trends and forces that are changing the marketing landscape in this age of relationships.

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Marketing

• Marketing involves creating value for customers and building strong customer relationships in order to capture value from customers in return.

• Goals:• Attract new customers by promising superior

value• Keep and grow current customers by delivering

satisfaction

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Forms of Marketing

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Figure 1.1 - The Marketing Process: Creating and Capturing Customer Value

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Understanding the Marketplaceand Customer Needs

• Core customer and marketplace concepts• Needs, wants, and demands• Market offerings (products, services, and

experiences)• Value and satisfaction• Exchanges and relationships• Markets

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Customer Needs, Wants, and Demands

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Market Offerings

• Combination of products, services, information, or experiences • Offered to a market to satisfy a need or want• Entities—products, services, persons, places,

organizations, information, and ideas• Marketing myopia: Paying more attention to

the specific products a company offers than to the benefits and experiences produced by these products

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Customer Value and Satisfaction

• Customers form expectations about the value and satisfaction of market offerings. • Satisfied customers buy again and spread the

word.• Dissatisfied customers switch to competitors and

criticize the product to others.• Setting low expectations may satisfy those

who buy but fail to attract enough buyers.• Setting high expectations may disappoint

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Exchanges and Relationships

• Exchange is the act of obtaining a desired object from someone by offering something in return.

• Marketing consists of creating, maintaining, and growing desirable exchange relationships with target audiences.• Marketers build strong relationships by

consistently delivering superior customer value.

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Fran Brassington and Stephen Pettitt, Essentials of Marketing, 3rd Edition © Pearson Education Limited 2013

Slide 1.13

Figure 1.1 Exchange transactions


Markets

• Set of all actual and potential buyers of a product or service

• Consumers market: • Search for products• Interact with companies to obtain information• Make purchases

• Customer-managed relationships are important as customers are empowered and marketing is made a two-way affair.

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Figure 1.2 - A Modern Marketing System

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Designing a Customer-Driven Marketing Management

• Marketing management: Choosing target markets and building profitable relationships with them

• Basic factors to design a winning marketing strategy:• Target market• Value proposition

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Designing a Customer-Driven Marketing Strategy

• Selecting customers to serve• Choosing a value proposition• Marketing management orientations

• Production concept• Product concept• Selling concept• Marketing concept• Societal marketing concept

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Slide 1.18

Table 1.1 Marketing history and business orientations – a summary


Figure 1.3 - The Selling and Marketing Concepts Contrasted

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Figure 1.4 - Three Considerations Underlying the Societal Marketing Concept

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Marketing Mix

• Set of marketing tools the firm uses to implement its marketing strategy• Product• Price• Place • Promotion

• Each tool should be blended into a comprehensive integrated marketing program.

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Slide 1.22

Figure 1.4 The marketing mix


Customer Relationship Management

• Delivering superior customer value and satisfaction to build and maintain profitable customer relationships • Customer-perceived value: Customer’s evaluation

of the difference between all the benefits and costs of a marketing offer relative to those of competing offers

• Customer satisfaction: Extent to which a product’s perceived performance matches a buyer’s expectations

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Customer Relationship Levels and Tools

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Customer-Engagement Marketing

• Customer-engagement marketing involves fostering direct and continuous customer involvement in shaping brand conversations, experiences, and community.

• Greater consumer empowerment means that companies should rely on marketing by attraction.

• The key is to find ways to enter consumers’ conversations with engaging and relevant brand messages.

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Consumer-Generated Marketing

• Brand exchanges created by consumers • Consumers play an increasing role in shaping their

own brand experiences and those of other consumers.

• Occurs through:• Uninvited consumer-to-consumer exchanges• Invitation of consumers by companies

• Asking for new product and service ideas• Asking to play an active role in shaping ads

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Partner Relationship Management

• Working closely with partners both inside and outside the company to jointly bring more value to customers• Partners inside the firm—cross-functional teams• Partners outside the firm—suppliers, channel

partners

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Creating Customer Loyalty and Retention

• Keeping customers loyal proves economical to the company.

• Customer lifetime value: Value of the entire stream of purchases a customer makes over a lifetime of patronage

• Customer defections can be costly• Can lose that customer’s lifetime value

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Share of Customer

• Portion of the customer’s purchasing that a company gets in its product categories

• Increased by:• Having good customer relationship management• Offering greater variety to current customers• Creating programs to cross-sell and up-sell to

market more products and services to existing customers

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Customer Equity

• Total combined customer lifetime values of all of the company’s current and potential customers

• Helps to measure the future value of the company’s customer base

• Increases when the loyalty of the firm’s profitable customers increases

• Better measure of a firm’s performance than current sales or market share

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Figure 1.5 - Customer Relationship Groups

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The Changing Marketing Landscape

• Digital age• Changing economic environment• Growth of not-for-profit marketing• Rapid globalization• Call for more ethics and social responsibility

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The Digital Age: Online, Mobile, and Social Media Marketing

• Digital and social media marketing: Engaging consumers via their digital devices using digital marketing tools and social media

• Mobile marketing: Using mobile channels to stimulate immediate buying, make shopping easier, and enrich the brand experience

• Blending the new digital approaches with traditional marketing creates a smoothly integrated marketing strategy and mix.

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Changing Economic Environment

• The Great Recession from 2008 to 2009 undermined consumer confidence.

• Post-recession era• Consumers have become more frugal.• New consumer spending values emphasize

simpler living.• Marketers are focusing on practicality and

durability in their product offerings and marketing pitches.

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Growth of Not-for-Profit Marketing

• Not-for-profits face stiff competition for support and membership.

• Sound marketing can help them attract membership, funds, and support.

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Rapid Globalization and Societal Marketing

• Managers around the world are taking both local and global views of the company’s:• Industry• Competitors• Opportunities

• Corporate ethics and social responsibility have become important for every business.

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Figure 1.6 - An Expanded Model of the Marketing Process

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Discussing the Concepts

• Customer loyalty and retention programs are important in building customer relationships and customer equity. Discuss why a national chain such as Melcom would choose a “club” program over a “frequency” program.

• “Today, most marketers realize that they don’t want to connect with just any customers.” Do you agree with this statement? Why? Which company would be more likely to follow this creed, Max Mart or Porsche?

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armstrong mai12 inppt 01-213664

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