Marketing 202

1. Marketing: Managing
Profitable Customer
Relationships
Chapter 1
1

2. Learning Goals
1. Define marketing and the marketing process.
2. Explain the importance of understanding customers and identify the five core marketplace
concepts
3. Identify the elements of a customer-driven marketing strategy and discuss the marketing
management orientations.
4. Discuss customer relationship management

3. What is Marketing?
• Marketing Defined:
“The process by which companies create value for the
customers and build strong customer relationships in
order to capture value from customers in return”
• Marketing is about managing profitable customer
relationships
• The two fold goal of marketing is-
• Attracting new customers
• Retaining and growing current customers
Goal 1: Define marketing and the marketing process.

4. The Marketing Process
Understand
the
marketplace
and
customer
needs and
wants
Design a
Customer-
driven
marketing
strategy
Construct a
marketing
program
that
delivers
superior
value
Build
profitable
relationships
and create
customer
delight
Capture
value
from
customers
to create
profits
and
customer
quality
Create value for customers and build
customer relationships
Capture value from customers in
return
Goal 1: Define marketing and the marketing process.

5. Understanding the Marketplace and customer
needs
Needs, wants, and demands
• Need
• State of felt deprivation
• Example: Need food
• Wants
• The form needs as shaped by culture and the individual
• Example: Want a Big Mac
• Demands
• Wants which are backed by buying power

6. Understanding the Marketplace and customer
needs
• Marketing offers:
• Products
• Services
• Events
• Experiences
• Persons
• Places
• Ideas
• Organizations
• Information

7. Understanding the Marketplace and customer
needs
• Value and satisfaction
• Value
• Customer-perceived value
• Customer’s evaluation of the difference between all the benefits and all the cost of a market
offering relative to those of competing products.
• Customers form expectations regarding value
• Marketers must deliver value to consumers
• Satisfaction
• Customer satisfaction
• The extent to which a product’s perceived performance matches a buyer’s expectations
• A satisfied customer will buy again and tell others about their good experience

8. Understanding the Marketplace and customer
needs
• Exchange, transactions and relationships
• Exchange
• The act of obtaining a desired object from someone by offering something in return
• One exchange is not the goal, relationships with several exchanges are the goal
• Relationships are built through delivering value and satisfaction
• Markets
• Market
• Set of actual and potential buyers of a product
• Marketers seek buyers that are profitable

9. Marketing Management
• Marketing management is the art and science of choosing target
markets and building profitable relationships with them.
• This definition must include answers to two questions:
• What customers will we serve?
• How can we serve these customers best?
Goal 3: Identify elements of a customer-driven strategy.

10. Marketing Management
• Selecting customers to serve
• Dividing the market into segments of customers- Market segmentation
• Selecting which segments it will go after-
Target marketing
• Demarketing
• Value proposition
• Set of benefits or values it promises to deliver to customers to satisfy their
needs.

11. Value Proposition
iPhone
Nokia
Nokia

12. Marketing Management Orientations
• Production concept
• Product concept
• Selling concept
• Marketing concept
□ Societal marketing concept
Goal 3: Identify elements of a customer-driven strategy.

13. The Production Concept
• Assumes that consumers are interested primarily in product
availability at low prices
• Marketing objectives:
• Cheap, efficient production
• Intensive distribution
• Market expansion

14. The Product Concept
• Assumes that consumers will buy the product that offers them the
highest quality, the best performance, and the most features
• Marketing objectives:
• Quality improvement
• Addition of features

15. The Selling Concept
• Assumes that consumers are unlikely to buy a product unless they are
aggressively persuaded to do so
• Marketing objectives:
• Sell, sell, sell
• Lack of concern for customer needs and satisfaction

16. The Marketing Concept
• Assumes that to be successful, a company must determine the needs
and wants of specific target markets and deliver the desired
satisfactions better than the competition
• Marketing objectives:
• Profits through customer satisfaction

17. Societal Marketing Concept
Societal
Marketing
Concept Company
(Profits)
Consumers
(Want Satisfaction)
Society
(Human Welfare)
• Assumes that marketing strategy should
deliver value to customers in a way that
maintain and improves both the consumer’s
and society’s well-being

18. Marketing Myopia
 A focus on the existing product only rather than the consumer needs it presumes
to satisfy
 Management’s failure to recognize the scope of the business
 Product-oriented rather than customer-oriented management endangers future
growth

19. The Marketing Plan
• Transforms the marketing strategy into action
• Includes the marketing mix -The 4P’s of marketing
• Product
• Price
• Place
• Promotion
Goal 3: Identify elements of a customer-driven strategy.

20. Marketing mixes- 4P’s
• Product
• Firm must first create a need satisfying market offering
• Price
• Decide how much it will charge for the offer
• Place
• Decide how it will make the offer available to target consumers
• Promotion
• Communicate with target customers about the offer and persuade them of its
merit
Goal 3: Identify elements of a customer-driven strategy.

21. Building Customer Relationships
• CRM–Customer relationship management
• The overall process of building and maintaining profitable
customer relationships by delivering superior customer value
and satisfaction. It deals with all aspects of acquiring, keeping
and growing customers.
Goal 4: Discuss CRM