Download Consumer Behavior: People in the Marketplace

Chapter 1
Marketing: Managing
Profitable Customer
Relationships
PowerPoint by
Kotler & Armstrong
(and modified by me)
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Copyright © 2003 Prentice-Hall, Inc.
Chapter Big Ideas
 The Big Ideas in this chapter are:
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Marketing is….
Major concepts and tools of marketing
Market orientations
CRM
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Marketing
 So what’s Marketing?
 Function: noun
 Etymology: Middle English, from Old
North French, from Latin mercatus --trade or marketplace
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Marketing
 Marketing is the process of planning
and executing the conception, pricing,
promotion, and distribution of goods,
services and ideas to facilitate
satisfying exchange relationships with
customers in a dynamic environment.
(AMA)
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Marketing
 Marketing is the process of planning and
executing (Management function)
 the conception, pricing, promotion, and
distribution (4 P’s)
 of goods, services and ideas (Product)
 to facilitate satisfying exchange
relationships (buying and selling)
 with customers (Target/Segment)
 in a dynamic environment. (External
factors)
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Factors
Influencing
Company
Marketing
The Four P’s
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Elements of a
Modern Marketing System
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Core Marketing Concepts
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Marketing Concepts and Tools
 Core Marketing Concepts
1. Target Markets and Segmentation
2. Marketers and Prospects
3. Needs, Wants, and Demands
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Marketing Concepts and Tools
4. Product, Offering, and Brand
5. Value and Satisfaction
 Value
Value = Benefits / Costs =
(Functional benefits + Emotional benefits) /
(Monetary costs + Time costs + Energy costs + Psychic
costs)
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Marketing Concepts and Tools
6. Exchange and Transactions
7. Relationships and Networks
Relationship marketing
Marketing network
8. Marketing Channels
9. Supply Chain
10. Competition
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Brand competition
Industry competition
Form competition
Generic competition
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Marketing Concepts and Tools
11. Marketing Environment
12. Marketing Mix (4 P’s)
13. Marketing Program
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Management Orientations Toward
the Marketplace
Production
Concept
Product
Concept
Selling
Concept
Marketing
Concept
Societal
Marketing
Concept
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CRM
 CRM is what?
 Customer relationship management (also
called CRM) is defined as:
“the overall process of building and
maintaining profitable customer
relationships by delivering superior
customer value and satisfaction.”
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CRM
 It costs 5 to 10 times MORE to attract a new
customer than it does to keep a current
customer satisfied.
 Marketers must be concerned with the
lifetime value of the customer.
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Marketing Challenges
 Source of marketplace changes:
 Technological advances
 Rapid globalization
 Continuing social and economic shifts
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Chapter 2
company and Marketing
Strategy: Partnering to
Build Customer
Relationships
PowerPoint by
Kotler & Armstrong
(and modified by me)
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Copyright © 2003 Prentice-Hall, Inc.
Chapter 2 – Big Ideas
 Strategic planning
 Value creation (in many forms)
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Strategic Planning
Strategic Planning is?
The Process of Developing and
Maintaining a Strategic Fit
Between the Organization’s Goals
and Capabilities and Its Changing
Marketing Opportunities.
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Steps in Strategic
Planning
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The Mission Statement
 What’s Mission Statement?
 A statement of the organization’s purpose
 What it wants to accomplish in the larger
environment
 Should be market oriented and defined in
terms of customer needs.
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Questions a Mission Statement
Should Answer
What is our Business?
Who is the Customer?
What do Consumers Value?
What Should our Business Be?
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Mission Statements Should:
Be Realistic
Be Specific
Fit the Market Environment
Be Based on Distinctive Competencies
Be Motivating
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Designing the Business
Portfolio
 A business portfolio is what?
 The business portfolio is the collection of
businesses and products that make up the
company.
 During the strategy process a company must
do what?
 analyze its current business portfolio or Strategic
Business Units (SBUs),
 decide which SBUs should receive more, less, or
no investment,
 develop growth strategies for growth or
downsizing.
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Portfolio Analysis
 A portfolio analysis is what?
 An evaluation of the products and business
making up the company.
 Resulting in?
 Identifying where resources are directed or
taken away
 Invest in to more profitable businesses and
 Divest in weaker ones (phased down or dropped).
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Strategic Business Unit
 A SBU is what? (hint: )
 A unit of the company that has a separate
mission and objectives and that can be
planned independently from other company
businesses.
 Can be a company division, a product line
within a division, or sometimes a single
product or brand.
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Strategic Planning Tools
 BCG’s growth share matrix
 Ansoff’s product/market expansion grid
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Analyzing Current SBU’s:
BCG Growth-Share Matrix
Relative Market Share
High
Low
Question Marks
Low
Market Growth Rate
High
Stars
• High growth & share
• May need heavy
investment to grow
• Eventually, growth will slow
Cash Cows
• Low growth, high share
• Established, successful
SBU’s
• Produce cash
?
• Low share SBUs in high growth
markets
• Require cash to hold
market share
• Build into Stars or phase out
Dogs
• Low growth & share
• Generate cash to sustain self
• Do not promise to be cash
sources
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Problems With Matrix
Approaches
Can be Difficult, Time Consuming, Costly to Implement
Difficult to Define SBUs & Measure Market Share/Growth
Focus on Current Businesses, Not Future Planning
Can Place too Much Emphasis on Growth
Can Lead to Poorly Planned Diversification
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Product/Market Expansion Grid
PRODUCT
MARKET
Existing
New
Existing
Market
Penetration
Product
Development
New
Market
Development
Diversification
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Value
 Value is what?
 Function: noun
 Pronunciation: 'val-(")yü
 Etymology: past participle of Latin
valEre – to be worth, be strong, be
powerful, be influential, be healthy
 Meaning:
“Relative worth, utility, or importance”
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Value Proposition
 Value Proposition is what?
 A set of benefits offered by an
organization to satisfy a customer’s
needs, wants and demands
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Value Chain
 So what’s a Value Chain?
 A Michael Porter concept
 A tool to conceptualize and identify ways to
create more customer value
 9 Activities
 5 primary activities
 Inbound logistics, operations, outbound logistics,
marketing and sales, service
 4 support activities
 Procurement, technology development, human resources,
firm infrastructure
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The Generic Value Chain
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Value Delivery Network
 So what’s a value delivery network?
 A network made up of the company,
suppliers, distributors, and ultimately
customers who “partner” with each other
to improve the performance of the entire
system
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Value Delivery Network
Company’s Value Chain
Distributors
Suppliers
Customers
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Market Segmentation
 So what’s market segmentation?
 The process of dividing a market into
distinct groups of buyers with different
needs, characteristics, or behavior who might
require separate products of marketing
programs.
 A market segment consists of consumers who
respond in a similar way to a given set of
marketing efforts.
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Target Marketing
 So what’s target marketing?
 Involves evaluating each market segment’s
attractiveness and selecting one or more
segments to enter or target.
 Target segments that can sustain profitability.
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Market Positioning
 Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
consumers (e.g., Chevy Blazer: “Like a rock”)
 Process begins with differentiating the company’s
marketing offer so it gives consumers more value.
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The Marketing Mix
 The set of
controllable,
tactical marketing
tools that the firm
blends to produce
the response it
wants in the
target market.

Consists of the 4 P’s
1.
2.
3.
4.
Product
Price
Place
Promotion
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The 4 P’s of the Marketing Mix
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Managing the Marketing Effort
Strategic
Tactical
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Major Sections of Product/Brand
Plan
Executive Summary
Current Marketing Situation
Analysis of Threats and Opportunities
Objectives for the Brand
Marketing Strategy
Action Programs
Marketing Budget
Controls
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Marketing Control
Process
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Marketing Concept
Value
Creation
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Value and Value Proposition
 Value
 The relative worth, utility or importance
 Value
Value = Benefits / Costs =
(Functional benefits + Emotional benefits) /
(Monetary costs + Time costs + Energy costs + Psychic costs)
 Value Proposition
 A set of benefits offered by an organization to satisfy a
customer’s needs, wants and demands
1-46
Copyright © 2003 Prentice-Hall, Inc.
Value Chain
 A tool to conceptualize and identify ways
to create more customer value
 9 Activities
 5 primary activities
 Inbound logistics, operations, outbound logistics,
marketing and sales, service
 4 support activities
 Procurement, technology development, human
resources, firm infrastructure
1-47
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The Generic Value Chain
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Value Delivery Network
 A network made up of the company,
suppliers, distributors, and ultimately
customers who “partner” with each other
to improve the performance of the entire
system
1-49
Copyright © 2003 Prentice-Hall, Inc.
Value Delivery Network
Company’s Value Chain
Distributors
Suppliers
Customers
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Market Segmentation
 The process of dividing a market into
distinct groups of buyers with different
needs, characteristics, or behavior who
might require separate products of
marketing programs.
 A market segment consists of consumers
who respond in a similar way to a given set
of marketing efforts.
1-51
Copyright © 2003 Prentice-Hall, Inc.
Target Marketing
 So what’s target marketing?
 Involves evaluating each market segment’s
attractiveness and selecting one or more
segments to enter.
 Target segments that can sustain profitability.
1-52
Copyright © 2003 Prentice-Hall, Inc.
Market Positioning
 Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
consumers (e.g., Chevy Blazer: “Like a rock”)
 Process begins with differentiating the company’s
marketing offer so it gives consumers more value.
1-53
Copyright © 2003 Prentice-Hall, Inc.
The Marketing Mix
 The set of
controllable,
tactical marketing
tools that the firm
blends to produce
the response it
wants in the
target market.

Consists of the 4 P’s
1.
2.
3.
4.
Product
Price
Place
Promotion
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The 4 P’s of the Marketing Mix
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