Download part 1 principles of Marketing

Marketing: Managing Profitable Customer Relationships
Presented by
Mr. Ahmed El Seddawy
AASTMT
After studying this chapter, you should be able to:
1.
2.
3.
4.
5.
Define marketing and outline the steps in the marketing process
Explain the importance of understanding customers and the
marketplace, 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
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
1-2
1.
What Is Marketing?
2.
Understanding the Marketplace and Customer Needs
3.
Designing a Customer-Driven Marketing Strategy
4.
Preparing an Integrated Marketing Plan and Program
5.
Building Customer Relationships
6.
Capturing Value from Customers
7.
The New Marketing Landscape
8.
So, What Is Marketing? Pulling It All Together
1-3
Marketing Defined
Marketing is the process by which companies create
value for customers and build strong customer
relationships to capture value from customers in
return
1-4
A
Understand the
marketplace
E
Capture Value from
Customers to create
profit
D
Build profitable
relationships and
customer
satisfaction
B
Design a Customer
C
Build a marketing
plan
1.
2.
3.
4.
5.
Understand the marketplace and customer wants and
needs
Design a customer-driven marketing strategy
Build a marketing plan that delivers superior value
Build profitable relationships and create customer
satisfaction
Capture value from customers to create profit and
customer equity
1-5
1.
Customer Needs, Wants, and Demands

Needs are states of deprivation
•
•
•

Physical: e.g. food, clothing, warmth, safety
Social: e.g. belonging and affection
Individual: e.g. knowledge and self-expression.
Wants are the form that needs take as they are shaped
by culture and individual personality

Demands are wants backed by buying power
1-6
2. Market Offerings: Products, Services, and Experiences

Market offerings are some combination of products, services,
information, or experiences offered to a market to satisfy a
need or want

Marketing my opinion is focusing only on existing wants and
losing sight of underlying consumer needs

Exchange is the act of obtaining a desired object from
someone by offering something in return
1-7
3. Customer Value and Satisfaction Determining by two
main factors:
1. Expectations
• Customers
• Value and satisfaction
2. Marketers
• Set the right level of expectations
• Not too high or too low
1-8
4. Exchanges and Relationships
Exchange is the act of obtaining a desired object
from someone by offering something in return
Relationships consist of actions to build and
maintain desirable relationships
1-9
5. Markets and Marketing System
Markets are the set of actual and potential buyers of a product
Marketing system consists of all of the actors (suppliers, company,
competitors, and end users).
in the system who are affected by major environmental forces
•
Demographic
•
Economic
•
Physical
•
Technological
•
Political–legal
•
Socio-cultural
1-10
Marketing Management
Marketing management is the art and
science of choosing target markets and
building profitable relationships with
them
 What customers will we serve?
 How can we best serve these customers?
1-11
Selecting Customers to Serve



Market segmentation: Dividing the markets into
segments of customers
Target marketing: Which segments to go after
De-marketing: Marketing to reduce demand
temporarily or permanently; the aim is not to destroy
demand but to reduce or shift it

Marketing management is:


Customer management
Demand management
1-12
Choosing a Value Proposition
The value proposition is the set of benefits
or values a company promises to deliver
to customers to satisfy their needs
1-13
Marketing Management Orientations
•
•
•
•
•
Production concept
Product concept
Selling concept
Marketing concept
Societal concept
1-14
Marketing Management Orientations
Production concept is the idea that
consumers will favor products that are
available or highly affordable
1-15
Marketing Management Orientations
Product concept is the idea that consumers
will favor products that offer the most
quality, performance, and features for
which the organization should therefore
give over its energy to making continuous
improvements
1-16
Marketing Management Orientations
Selling concept is the idea that consumers will
not buy enough of the firm’s products unless
it undertakes a large scale selling and
promotion effort
1-17
Marketing Management Orientations
Marketing concept is the idea that achieving
organizational goals depends on knowing
the needs and wants of the target markets
and delivering the desired satisfactions
better than competitors do
1-18
Marketing Management Orientations
Societal marketing concept is the idea that a
company should make good marketing
decisions by considering consumers’ wants,
the company’s requirements, consumers’
long-term interests, and society’s long-run
interests
1-19
Marketing Mix
The marketing mix is the set of tools (four
Ps) the firm uses to implement its
marketing strategy
•
Product
•
Price
•
Promotion
•
Place
1-20
Integrated Marketing Program
Integrated
marketing
program
is
a
comprehensive plan that communicates
and delivers the intended value to chosen
customers
1-21
Customer Relationship Management (CRM)
Customer relationship management is the
overall
process
of
building
and
maintaining
profitable
customer
relationships by delivering higher value
and satisfaction
1-22
Customer Relationship Management (CRM)


Customer
perceived
value
is
the
difference between total customer value
and total customer cost
Customer satisfaction is the extent to
which a product’s perceived performance
matches a buyer’s expectations
1-23
Customer Relationship Management (CRM)
Customer Relationship Levels and Tools
•
•
•
•
Basic relationship
Full relationships
Frequency marketing programs
Club marketing programs
1-24
The Changing Nature of Customer Relationships



Relating with more carefully selected customers uses
selective relationship management to target fewer and more
profitable customers
Relating for the long term uses Customer Relationship
Management (CRM) to retain current customers and build
profitable, long-term relationships
Relating directly uses direct marketing tools (telephone, mail
order, kiosks, Internet) to make direct connections with
customers
1-25
Partner Relationship Management
Partner relationship management refers to working closely
with partners in other company departments and outside the
company to jointly bring greater value to customers

Partners inside the company is every function area
interacting with customers
•
•

Electronically
Cross-functional teams
Partners outside the company is how marketers connect
with their suppliers, channel partners, and competitors by
developing partnerships
1-26
Creating Customer Loyalty and Retention
Customer lifetime value is the value of the entire stream
of purchases that the customer would make over a
lifetime of patron age
Growing Share of Customer
Share of customer is the fraction of the customer’s
purchasing that a company gets in its product
categories
1-27
Building Customer Equity
Customer equity is the total combined customer lifetime
values of all the company’s customers
Building the right relationships with the right customers
Treating customers as assets that need to be managed
and maximized
•
Different types of customers require different
relationship management strategies
• Build the right relationship with the right customers
1-28
Major Developments
•
•
•
•
Digital age
Globalization
Ethics and social responsibility
Not-for-profit marketing
1-29
The New Digital Age
1.
2.
3.
4.
5.
Recent technology has had a major impact on the ways
marketers connect with and bring value to their
customers
Market research
•
Learning about and tracking customers
•
•
Video conferencing
Online data services
Create new customized products
Distribution
Communication
1-30
The New Digital Age
Internet creates market-places and market-spaces
•
•
•
Information
Entertainment
Communication
1-31
Rapid Globalization
•
The world is smaller
•
Think globally, work locally
1-32
The Call for More Ethics and Social Responsibility
Marketers are being called upon to take greater
responsibility for the social and environmental
impact of their actions in a global economy
Social marketing campaigns encourage energy
conservation and concern for the environment or
discourage smoking, excessive drinking, and
drug use
1-33
The Growth for Not-for-Profit Marketing
•
•
•
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Colleges
Hospitals
Museums
Religious groups
1-34