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Learning ObjectivesAfter studying this chapter, you should be
able to:Define marketing and outline the steps in the marketing
processExplain the importance of understanding customers and the
marketplace, and identify the five core marketplace
conceptsIdentify the key elements of a customer-driven marketing
strategy and discuss the marketing management orientations that
guide marketing strategyDiscuss customer relationship management,
and identify strategies for creating value for customers and
capturing value from customers in returnDescribe the major trends
and forces that are changing the marketing landscape in this age of
relationships
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Chapter OutlineWhat Is Marketing?Understanding the Marketplace
and Customer NeedsDesigning a Customer-Driven Marketing
StrategyPreparing an Integrated Marketing Plan and ProgramBuilding
Customer RelationshipsCapturing Value from CustomersThe New
Marketing LandscapeSo, What Is Marketing? Pulling It All
Together
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What Is Marketing?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.
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What Is Marketing?The Marketing Process
Understand the marketplace and customer wants and needsDesign a
customer-driven marketing strategyConstruct a marketing plan that
delivers superior valueBuild profitable relationships and create
customer satisfactionCapture value from customers to create profit
and customer equity
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Create customer driven marketing strategyConstruct a marketing
program that delivers superior valueBuild profitable relationships
& create customer delightCapture value from customers to create
profits & customer qualityUnderstand the marketplace and
customers needs/wants
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Understanding the Marketplaceand Customer NeedsCustomer Needs,
Wants, and DemandsNeeds are states of deprivation:Physicalfood,
clothing, warmth, safetySocialbelonging and
affectionIndividualknowledge and self-expression
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Customer Needs, Wants, and Demands Wants are the form that needs
take as they are shaped by culture and individual
personality.Demands are wants backed by buying power.
Understanding the Marketplaceand Customer Needs
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Market OfferingsProducts, 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 myopia is focusing only on existing wants and losing
sight of underlying consumer needs.
Understanding the Marketplaceand Customer Needs
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Customer Value and SatisfactionSatisfaction is derived from
comparing performance with expectations
ExpectationsCustomers make choices according to Values and
satisfaction of various market offeringsMarketersSet the right
level of expectationsNot too high or too low
Understanding the Marketplaceand Customer Needs
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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 actions to build and maintain desirable
exchange relationships.
Understanding the Marketplaceand Customer Needs
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Markets are the set of actual and potential buyers of a
product.Marketing system consists of all of the actors (suppliers,
company, competitors, intermediaries, and end users) in the system
who are affected by major environmental forces: Demographic;
Economic; Physical; Technological; Political-legal;
Socio-cultural
Understanding the Marketplaceand Customer Needs
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Elements of a Modern Marketing System
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Designing a Customer-Driven Marketing StrategyMarketing
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?
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Selecting Customers to Serve Market segmentation: Dividing the
markets into segments of customersTarget marketing: Which segments
to go afterDesigning a Customer-Driven Marketing Strategy
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Selecting Customers to Serve De-marketing Marketing to reduce
demand temporarily or permanently The aim is not to destroy demand
but to reduce or shift it.Designing a Customer-Driven Marketing
Strategy
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Selecting Customers to Serve Marketing management is:Customer
managementDemand managementDesigning a Customer-Driven Marketing
Strategy
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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.Designing a
Customer-Driven Marketing Strategy
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Marketing Management Orientations
Production conceptProduct conceptSelling conceptMarketing
conceptSocietal conceptDesigning a Customer-Driven Marketing
Strategy
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Marketing Management Orientations
The production concept is the idea that consumers will favor
products that are available or highly affordable.
Designing a Customer-Driven Marketing Strategy
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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 devote its energy to making
continuous improvements.Designing a Customer-Driven Marketing
Strategy
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Marketing Management Orientations
Selling concept is the idea that consumers will not buy enough
of the firms products unless it undertakes a large scale selling
and promotion effort.Designing a Customer-Driven Marketing
Strategy
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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.Designing a Customer-Driven Marketing Strategy
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Customer Driven vs. Customer Driving Marketing
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Marketing Management Orientations
Societal marketing concept is the idea that a company should
make good marketing decisions by considering consumers wants, the
companys requirements, consumers long-term interests, and societys
long-run interests.Designing a Customer-Driven Marketing
Strategy
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Preparing an Integrated Marketing Plan and ProgramMarketing
MixThe marketing mix is the set of tools (four Ps) the firm uses to
implement its marketing strategy:Product create a need-satisfying
market offeringPrice decide how much it will charge for the
offerPromotion communicate with target customers about the offer
and persuade them of its meritsPlace decide how it will make the
offer available to target consumers
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Integrated Marketing Program
An integrated marketing program is a comprehensive plan that
communicates and delivers the intended value to chosen
customers.Preparing an Integrated Marketing Plan and Program
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Customer Relationship Management (CRM)
Customer relationship management is the overall process of
building and maintaining profitable customer relationships by
delivering superior value and satisfaction.Building Customer
Relationships
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Customer Relationship Management (CRM)
Customer perceived value is the difference between total
customer value and total customer cost of a market offering
relative to those of competing offers.
Customer satisfaction is the extent to which a products
perceived performance matches a buyers expectations.Building
Customer Relationships
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A Customers Perception of Value
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Customer Relationship Management (CRM)
Customer Relationship Levels and ToolsBasic relationship (with
low-margin customers)Full relationships (with high-margin/key
customers)Developing strong bonds with customers throughFrequency
marketing programsClub marketing programsBuilding Customer
Relationships
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The Changing Nature of Customer RelationshipsRelating with more
carefully selected customers uses selective relationship management
to target fewer, more profitable customers.Relating for the long
term uses customer relationship management 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.Building Customer Relationships
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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.
Building Customer Relationships
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Partner Relationship Management
Partners inside the company is every function area interacting
with customers.ElectronicallyCross-functional teams
Partners outside the company is how marketers connect with their
suppliers, channel partners, and competitors by developing
partnerships.Building Customer Relationships
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Partner Relationship Management
The supply chain is a channel that stretches from raw materials
to components to final products to final buyers.Supply
managementStrategic partnersStrategic alliances
Building Customer Relationships
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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
patronage.Capturing Value from Customers
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Growing Share of Customer
Share of customer is the portion of the customers purchasing
that a company gets in its product categories.Capturing Value from
Customers
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Building Customer Equity
Customer equity is the total combined customer lifetime values
of all of the companys customers.Capturing Value from Customers
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Building Customer Equity
Building the right relationships with the right customers
involves treating customers as assets that need to be managed and
maximized.Different types of customers require different
relationship management strategiesBuild the right relationship with
the right customersCapturing Value from Customers
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Major DevelopmentsDigital ageGlobalizationEthics and social
responsibilityNot-for-profit marketingThe new world of marketing
relationshipsThe New Marketing Landscape
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The New Digital AgeRecent technology has had a major impact on
the ways marketers connect with and bring value to their
customersMarket research Learning about and tracking
customersCreate new customized
productsDistributionCommunicationVideo conferencingOnline data
servicesThe New Marketing Landscape
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The New Digital Age
Internetcreates marketplaces and
MarketspacesInformationEntertainmentCommunicationThe New Marketing
Landscape
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Rapid Globalization
The world is smallerThink globally, act locallyThe New Marketing
Landscape
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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.The New Marketing Landscape
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The Call for More Ethics and Social Responsibility
Social marketing campaigns encourage energy conservation and
concern for the environment or discourage smoking, excessive
drinking, and drug use.The New Marketing Landscape
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The Growth for Not-for-Profit
MarketingCollegesHospitalsMuseumsZoosOrchestrasReligious groupsThe
New Marketing Landscape
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Pulling it All Together