Customer Value, Satisfaction, Customer Relationships and Customer Experiences. Chapter 1.

Customer Value, Satisfaction, Customer Relationships and Customer Experiences.

Chapter 1

In this section we will:Define Marketing.Discover the basic requirements for marketing to

occur.Understand the Role of Marketing in our SocietyDistinguish between the controllable marketing

mix elements and uncontrollable environmental marketing elements.

Develop an understanding of how marketing has evolved over time.

Understand how ethical issues can creep into marketing decisions.

A Marketing ExpertUnlike many other business subjects,

Marketing is something that we are exposed to each and every day -- as a result we are marketing experts.

Definition of MarketingMarketing is:

A Process of Planning and Doing…The Conception (Product), the Pricing, The

Promotion and the Distribution (Place)…Of an Idea, Good or Service…To create and Exchange..To satisfy Individual or Organizational

Objectives.

Marketing Discovers needs & wants and attempts to satisfy them.

For Marketing to Occur there needs to be:Two or more parties (a Buyer & a Seller) that

have needs that each other can fulfil.A Desire, and an Ability to satisfy these

needs. (A Market)A way to Communicate this desire to the

other party.Something of value to Exchange.

Key Questions of MarketingWho Markets - Profit and Not-for-profit,

government and individuals.What is marketed - Goods, Services and

Ideas.Who Buys what is marketed - Individuals and

Organizations.Who Benefits - Individuals and Organizations

Finding a needSometimes satisfying a need proves to be a

difficult task.To narrow in on the needs of a diverse group

of potential customers, companies often group people by their needs. These groups are known as Target Markets.

Target Markets will respond similarly to a given set of marketing actions.

ValueThe combination of benefits offered to the

customer relative to the price paid.Quality = increased customer value.

The Marketing Mix“The 4 P’s”

These are the controllable factors that a company/organization can adjust in order to satisfy customer needs.

They include:The Product ( The Good, Service or Idea sold)The Promotion ( How the product is

communicated to the potential buyer)The Price (The rate of exchange)The Place ( How the product is distributed to the

customer)

Influences on MarketingCertain aspects of marketing are

controllable: Product, Price, Place & Promotion.

Other aspects of the environment in which marketing occurs must be dealt with, but cannot be changed: Social Forces, Economic Forces, Technological Forces, Competitive Forces and Regulatory Forces.

Environmental InfluencesThese are factors external to the

company/organization that it has no direct control over. These factors must be dealt with.

These include:Social Factors - Aspects of Demographic

Change and Cultural Change. Economic Factors - People’s income and

inflation

Environmental Influences cont...Technological Factors - Changes in technology

and the effects of this change.Competitive Factors - What competitors are

doing.Regulatory Factors - Government and Industry

regulation and how it impacts on the business.

Eras of MarketingProduction Era - 1800’s - 1920’s - Customers

would buy all that was produced because they simply could not buy these newly-invented items before. The Focus in this era was on developing the production process (e.g. Assembly lines), not on satisfying customer needs. Henry Ford’s philosophy of “you can have any colour you want; provided its black” was the prevailing tone of manufacturers. Customers had little choice but accept this.

Mid - 1800’s Now1930’sThe Great Depression

1960’sBaby Boomers come of age

Mid -1980’sThe Computer ageIndustrial

Revolution

Eras of Marketing cont...Sales era -- 1930’s - 1960’s - During this time

the world went through a depression and a war. Production capacity was well developed however the buying public had less money to buy these new products and competition among specific manufactures was stiff. The focus was on the hard sell. “We’ve built it, so you better buy it” was the prevailing philosophy. Again the interests the customer were secondary compared to the interests of manufacturers.

Mid - 1800’s Now1930’sThe Great Depression

1960’sBaby Boomers come of age

Mid -1980’sThe Computer ageIndustrial

Revolution

Eras of Marketing cont...Marketing Concept Era -- 1960’s - 1980’s - The

emergence of Japanese competition in the late 60’s and 70’s and the increased activism of customers who demanded better quality products force manufactures to finally consider the customer when developing and marketing products.

Customers were better educated, better aware and demanded “value”.

Mid - 1800’s Now1930’sThe Great Depression

1960’sBaby Boomers come of age

Mid -1980’sThe Computer ageIndustrial

Revolution

Eras of Marketing cont...Market Orientation Era / Customer Experience Era-

1990’s - The advent of computers and massive data gathering allow companies to better determine customer needs. Product lives are shorter and competition is stiff to please the customer and build long-term relationships.

Customer Value Customer Satisfaction Customer Relationship Management Customer Lifetime Value Interactive Marketing

Mid - 1800’s Now1930’sThe Great Depression

1960’sBaby Boomers come of age

Mid -1980’sThe Computer ageIndustrial

Revolution

Eras of Marketing cont...Social Media: Market Orientation Era / Customer

Experience Era- NOW – Social Media is made up of user friendly internet based website that allow three way communication – between buyer and seller, seller and buyer and buyer and buyer. The content is largely CONSUMER based.

Mid - 1800’s Now1930’sThe Great Depression

1960’sBaby Boomers come of age

Mid -1980’sThe Computer ageIndustrial

Revolution

Social ResponsibilityThe Societal Marketing Concept -- Many

large corporations have found that it is good business to be responsible for the society in which they operate.

Micro/Macro MarketingMicromarketing - looks at how the individual

corporation markets.Macromarketing - Looks at the impact of

marketing, as a whole, on society.