Chapter 1. What is Marketing? Creating Customer Value & Building Customer Relationships 5 Core Marketing Dynamics External Marketing System Internal Business.

Chapter 1

(For a specific business)

The process by which companies:

-Create Value

-Develop customer relationships

To generate profits in return.

1-4

Philosophy that holds that achieving organizational goals depends on:

◦Knowing the NEEDS and WANTS of target markets and

◦Satisfying those needs/wants BETTER than competition.

1-4

1. Attract new customers by promising superior value.

2. Keep and grow current customers by delivering satisfaction, creating relationships.

OLD view of marketing:

Making a sale—“telling and selling”

NEW view of marketing:

Satisfying customer needs

BUILDING CUSTOMERS RELATIONSHIPS & CREATING CUSTOMER VALUE

CUSTOMER’S EXPERIENCE

1. Needs, wants, and demands2. Market offerings3. Value and satisfaction4. Exchanges and relationships5. Markets

Need: Physical, social, and individual needs.

Wants: Shaped by culture and individual personality.

Wants + Buying Power = Demand.

1-9

Some combination of products, Some combination of products, services, information, or services, information, or experiences offered to a market experiences offered to a market to satisfy a need or want.to satisfy a need or want.

Marketing offers fulfill needs and wants

Market offerings are not limited to physical products.

UNCF powerfully markets the idea that “A mind is a terrible thing to waste.”

Copyright 2011, Pearson Education Inc., Publishing as Prentice-Hall

1-11

Occurs when sellers pay more attention to their products (market offerings) than to the benefits produced by their products.

1-11

Customer’s evaluation all of the Customer’s evaluation all of the benefitsbenefits and all of the and all of the costscosts of of a marketing offer relative to a marketing offer relative to competing offerscompeting offers..

Quality/Experience

Price= VALUE

Marketers build strong relationships by consistently delivering superior customer value.

Firms now relate more deeply and interactively via social networking,

websites, email, video sharing (YouTube) Must practice marketing by attraction –

creating marketing messages/offerings that involve consumers, not interrupt them (eg TV ads)

Attraction NOT Intrusion

CRM = Customer Relationship Marketing

A market:◦Is the set of actual and potential buyers of a product.

These people share a need or want that can be satisfied through exchange relationships with a company.

Uncertain Economic Environment

Digital Age, Mobile Marketing, Social Networking

Rapid Globalization

Growth of not-for-profit marketing

66% of McDonald’s revenue now comes from outside the US.

200,000 new donors contributed $30 million to the APSCA as a result of “The Ad”

Brand exchanges created by consumers themselves –

Invited AND Uninvited

Shapes consumers relationship with the brand and that of others.

Coke/Mentos video Coke Mentos Video

H.J. Heinz attempted to harness consumer-generated marketing and received 8,000 entries in a homemade ad contest for its ketchup brand on YouTube.

Current Sales Future Sales Profit Market Share – A company’s % of total

sales in a given market.

Coke Market ShareCoke Sales = $ 50M = 50%Total Sales of Soda = $ 100M