Download (Who) is a Customer?

Marketing Fundamentals
Marketing As A
CUSTOMER-DRIVEN PROCESS
Fundamentals
http://www.youtube.com/watch?v=KkBvzS_fJ2g&feature=player_embedded#
Marketing
CUSTOMER-DRIVEN
http://www.youtube.com/watch?v=l4seWLW2KhQ&feature=player_embedded
Marketing is the only business function that is external:
Marketing is universal:
Marketing is universal:
Promotion is only a part of marketing…
Advertising is only a part of promotion…
The average person sees….
500 to 2,500 ads per day
Marketing is universal:
Promotion is only a part of marketing…
Advertising is only a part of promotion…
There are 54 jobs in sales for every job in advertising!
Marketing is universal:
24 to 33% of ALL workers have jobs in marketing
Marketing is universal:
24 to 33% of ALL workers have jobs in marketing
About 40% of everything you spend goes to marketing
Marketing is universal:
24 to 33% of ALL workers have jobs in marketing
About 40% of everything you spend goes to marketing
Modern business would collapse without it
Marketing is universal:
24 to 33% of ALL workers have jobs in marketing
About 40% of everything you spend goes to marketing
Modern business would collapse without it
Everyone does it
Definition of Marketing
Marketing (AMA): “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.”
Value Definition:
Marketing is an organizational function
and
A set of processes for:
Creating
Communicating
Delivering
Value
To customers
Exchange Definition:
Marketing is the processes of:
Creating
exchanges
that satisfy
individual and organizational
objectives.
Exchange Definition:
Marketing is:
Arranging a
Buyer… Seller
for a
Seller… Buyer
The conception, pricing, promotion, and distribution
These are called the 4-Ps or the Marketing Mix
The conception, pricing, promotion, and distribution
The 4-Ps or the Marketing Mix (mnemonic)
1. Product
2. Promotion
3. Price
4. Place (distribution)
All of these need to be
redefined in terms
of the definitions!
Value:
Definition: The benefits a customer receives
from obtaining a product (good, service, information)
Value:
Definition: The benefits a customer receives
From obtaining a product (good, service, information)
Need:
Definition: The difference between an exchanger’s
actual state and some ideal state
Desired State
Need
Actual State
Want:
Definition: The desire to satisfy needs in
a specific way
Demand:
Definition: Wants backed with resources
Satisfaction:
Definition: Benefits = Expectations
“Satisfaction is not symmetrical.”
1. Product:
That which gives value
2. Price
3. Promotion
4. Place
1. Product:
2. Price
Value (benefits – costs)
3. Promotion
4. Place
1. Product:
2. Price
3. Promotion
The communication of value
4. Place
1. Product:
2. Price
3. Promotion
4. Place
The distribution of value, or increasing
value by distribution
Exchange Definition
1. Product:
That which is transacted
2. Price
3. Promotion
4. Place
Exchange Definition
1. Product:
2. Price
The value of a transaction
3. Promotion
4. Place
Exchange Definition
1. Product:
2. Price
3. Promotion
The communication process of
a transaction
4. Place
Exchange Definition
1. Product:
2. Price
3. Promotion
4. Place
The actual transaction
“Marketing is arranging a buyer for a seller.”
This means:
1. Marketing is the process of creating satisfying
exchanges.
2. Wealth is created through free exchanges.
Marketing Concept:
“All marketing strategies should be based on
known consumer needs and/or wants.”
Note the word:
KNOWN
Don’t businesses do this already?
Do businesses make it easy for you to pay them?
Extension:
“All firms and companies have the same product…
that is, a customer.”
Implications…………..
Without producing a customer….
nothing else produced is relevant.
“There is only one valid definition of business
purpose: to create a customer. “
Peter Drucker
“Everybody is paid by the customer. Pay raises,
bonuses, job promotions, and worker benefits
are paid by the customer. “
Jeffrey Fox
“Inside an organization there are only cost centers.
The only profit center is a customer whose check
has not bounced. “
Peter Drucker
Without producing a customer….
nothing else produced is relevant.
Products only have one function…
to produce a customer.
Without producing a customer….
nothing else produced is relevant.
Promotion only has one function…
to produce a customer.
Ads that do not produce customers
may be entertaining, but
Promotion is not entertainment…
Without producing a customer….
nothing else produced is relevant.
Price
has only one function…
to produce a customer.
Without producing a customer….
nothing else produced is relevant.
Place
has only one function…
to produce a customer.
“Customers fire employees every day for many
reasons. “
“Every single job in a company must directly or
indirectly help to get and keep a customer.”
Jeffrey Fox
“Customers fire employees every day for many
reasons. “
“Every single job in a company must directly or
indirectly help to get and keep a customer.”
“Jobs that don’t get and keep customers are
temporary, unnecessary, or should be
outsourced. “
Jeffrey Fox
Employees have only one function…
to produce a customer.
Without producing a customer….
nothing else produced is relevant.
Historical Development
Based Mostly on Supply & Demand
Historical Development
1. Barter (Until about 1850; industrial revolution)
2. Production Era (Demand exceeds Supply)
3. Sales Era (Demand = Supply; Until about 1945-1960
4. Marketing Orientation
a. Marketing Department Era (Supply > Demand)
b. Marketing Concept Era
c. Relationship Era
“Marketing is the only external
business function.”
“Marketing is arranging a buyer for a
seller.”
“Marketing is creating an exchange.”
You will make a living
in marketing only if:
You can add value
to an exchange:
All Business is Service!
“People become rich when they
make other people happy.
They become very wealthy
when they make a lot of
people happy.”
Benjamin Stein
Marketing Concept:
“All marketing strategies should be based on
known consumer needs and/or wants.”
In 1776 in The Wealth of Nations, Adam Smith wrote
that the needs of producers should be considered only
with regard to meeting the needs of consumers. While
this philosophy is consistent with the marketing
concept, it would not be adopted widely until nearly
200 years later.
The Production Concept
Can we produce the product?
Can we produce enough of it?
The Sales Concept
Can we sell the product?
Can we charge enough for it?
What (Who) is a Customer?
A customer?
Who are we talking about?
Not always clear…
Who is a customer?
Is a student a customer?
2. In what ways are they
a customer?
3. In what ways are they
not a customer?
Not Everyone is a Customer!
Markets are segmented:
Practically no one tries to sell to everyone……
Markets are segmented:
80/20 Rule
Demographics
Psychographics
Needs/Wants
Needs are: Wants backed by resources!
IS the customer always RIGHT?
Is the customer always right?
NO!
“The cliché is wrong. The right customer
is always right. The wrong customer, is
not right for the selling company.”
Jeffrey J. Fox
Wrong customers are:
“Difficult”
But what does this mean?
About 3% of the population is clinically insane
Another 40% is neurotic…………
What are They Actually Buying
Customers do not buy products.
They buy what products DO for them.