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Questions and Answers
What is the primary focus of customer satisfaction in marketing?
What is the primary focus of customer satisfaction in marketing?
Which of the following best defines 'exchange' in marketing?
Which of the following best defines 'exchange' in marketing?
Which statement accurately describes a market?
Which statement accurately describes a market?
How is customer lifetime value defined?
How is customer lifetime value defined?
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What does customer equity represent in marketing terms?
What does customer equity represent in marketing terms?
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Which option does NOT represent a component of value creation for customers?
Which option does NOT represent a component of value creation for customers?
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What commonly results from marketing myopia?
What commonly results from marketing myopia?
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Demand management primarily involves which of the following?
Demand management primarily involves which of the following?
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What is the primary goal of customer relationship management (CRM)?
What is the primary goal of customer relationship management (CRM)?
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To what extent is it more costly to attract a new customer compared to retaining an existing one?
To what extent is it more costly to attract a new customer compared to retaining an existing one?
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Which of the following is NOT an element of the marketing mix?
Which of the following is NOT an element of the marketing mix?
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What does the 'promotion' aspect of the marketing mix primarily involve?
What does the 'promotion' aspect of the marketing mix primarily involve?
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What are the beneficial outcomes of customer loyalty?
What are the beneficial outcomes of customer loyalty?
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Which of the following represents the customer-centric view of the marketing mix known as the 4Cs?
Which of the following represents the customer-centric view of the marketing mix known as the 4Cs?
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Which of the following is a key concept in growing customer share?
Which of the following is a key concept in growing customer share?
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Which is NOT a method for building customer loyalty and retention?
Which is NOT a method for building customer loyalty and retention?
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What is a critical aspect of the 'place' element in the marketing mix?
What is a critical aspect of the 'place' element in the marketing mix?
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Which strategy can improve customer satisfaction significantly?
Which strategy can improve customer satisfaction significantly?
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What is the key focus of the societal marketing concept?
What is the key focus of the societal marketing concept?
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In Maslow's hierarchy of needs, which of the following represents a social need?
In Maslow's hierarchy of needs, which of the following represents a social need?
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What constitutes demand in the context of core marketing concepts?
What constitutes demand in the context of core marketing concepts?
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Which of the following describes non-traditional marketing offers?
Which of the following describes non-traditional marketing offers?
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Which of these best describes a marketing offer?
Which of these best describes a marketing offer?
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What is a common misconception about customer management?
What is a common misconception about customer management?
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Which of these elements can be marketed according to the broader definition of marketing?
Which of these elements can be marketed according to the broader definition of marketing?
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What does an organization need to emphasize under the societal marketing concept to succeed?
What does an organization need to emphasize under the societal marketing concept to succeed?
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Study Notes
Marketing: Managing Profitable Customer Relationships
- Marketing is a social and managerial process enabling individuals and groups to obtain what they need and want through creating and exchanging products and value with others.
- Marketing involves managing profitable customer relationships. This includes attracting new customers and retaining/growing current ones.
- Marketing is NOT synonymous with sales or advertising.
Objectives
- Define marketing and discuss its core concepts.
- Define marketing management and compare the five marketing management orientations.
- Understand customer relationship management and strategies.
- Gain exposure to marketing mix variables and some marketing functions.
What is Marketing?
- Kotler's social definition: "Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others."
- Managing profitable customer relationships
- Attracting new customers
- Retaining and growing current customers
The Marketing Process
- Understand the marketplace and customer needs and wants.
- Create value for customers and build customer relationships.
- Design a customer-driven marketing strategy
- Construct an integrated marketing program that delivers superior value
- Build profitable relationships and create customer delight
- Capture value from customers in return
- Capture value from customers to create profits and customer equity
Marketing Management
- Marketing management is the art and science of choosing target markets and building profitable relationships with them.
- Creating, delivering, and communicating superior customer value is key.
- Customer Management
- Marketers select customers who can be served well and profitably.
- Demand Management
- Marketers deal with different demand states, ranging from no demand to too much demand.
- Customer Management
Marketing Management Orientations
- Production concept
- Product concept
- Selling concept
- Marketing concept
- Societal concept
Marketing Myopia
- Marketing myopia is when a company focuses only on its product, failing to meet its customer's needs or look at the larger societal context of its goods or service.
- Marketing myopia focuses only on existing wants, losing sight of underlying customer needs.
- Production, Product, and Selling concepts suffer from marketing myopia.
Marketing Orientations (Selling and Marketing)
- Selling (1930s): Consumers will not buy enough of an organization's products unless the organization aggressively promotes/sells the products.
- Marketing (1950s): Achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more efficiently than competitors do.
Selling & Marketing Concepts Contrasted
- Selling: The selling concept starts with the product and ends with profits through sales volume, relying on convincing customers to buy rather than starting with customer needs.
- Marketing: The marketing concept starts with customer needs and wants and ends with profits through satisfying those needs and wants, thus understanding the customer better than the competition.
Societal Marketing Concept
- Achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more efficiently than competitors do, in a way that maintains or improves customer's and society's well-being.
Core Marketing Concepts
- Needs, wants, and demands
- Markets
- Exchange, transactions, and relationships
- Core Marketing Concepts
- Marketing offers (products, services, and experiences)
- Value and satisfaction
- Demand
- Human wants backed by ability and willingness to pay.
CORE MARKETING CONCEPTS
- Need: A state of felt deprivation (e.g., physical needs like food, safety, social needs for belonging, affection,individual needs for knowledge, self-expression, Maslow's Hierarchy of Needs).
- Want: The form that a human need takes, as shaped by culture and individual personality.
- Demands: Human wants backed by buying power.
MARKETING OFFERS
- Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.
- Marketing offerings may include places, persons, organizations, ideas, and information.
What Can Be Marketed?
- Goods, Services, Places, Ideas, Events, Persons, Properties, Organizations, Information, and Experiences
Products and Services
- Products: Anything that can be offered to a market for attention, acquisition, use, or consumption.
- Services: Activities or benefits offered for sale that are intangible, and don't result in ownership (e.g., air travel, a hotel stay, a theatre performance).
Customer Value and Customer Satisfaction
- Customer Value: The difference between the benefit (utility) customers derive from owning and using a product and the cost of obtaining the product.
- Customer Satisfaction: The extent to which a product's perceived performance matches a buyer's expectations.
Exchange, Transactions, and Relationships
- Exchange: The act of obtaining a desired object from someone by offering something in return.
- Transaction: A trade of values between two parties.
- Relationship: Actions taken to build and maintain desirable exchange relationships with valued customers.
Markets
- A set of actual and potential buyers who share a particular need or want that can be satisfied through an exchange or relationship.
- Markets can be collections of buyers or places where goods are bought and sold (physical or virtual).
Customer Lifetime Value and Customer Equity
- Customer Lifetime Value: The stream of income generated by a single loyal customer.
-
Customer Equity: The total combined customer lifetime values of all customers.
- Measures firm performance in a manner that looks to the future.
Customer Relationship Management (CRM)
- CRM is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.
- It costs more to attract a new customer than to keep an existing one satisfied.
- Marketers need to focus on the lifetime value of a customer.
CRM Key Concepts
- Attracting, retaining, and growing customers
- Customer value and satisfaction
- Loyalty and retention
- Delighting consumers
- Growing customer share and cross-selling
- Building relationships and customer equity
- Customer relationship levels and tools
- Customer loyalty and retention programs
- Adding financial benefits
- Adding social benefits
- Adding structural ties
Marketing Mix (4Ps or 4Cs)
- A set of controllable tactical marketing tools: product, price, place, and promotion to produce the response the firm wants in the target market.
- From customer perspective: Customer solution, cost, convenience, communication.
Marketing Mix - Product/Customer Solution
- Products/services combination the company offers to the target market: variety, quality, features, brand name, packaging, services, and returns warranties.
Marketing Mix - Price/Cost
- The amount of money customers have to pay to obtain a product: list price, discounts, allowances, payment period, and credit terms.
Marketing Mix - Place/Convenience
- Company activities to make products available to customers: channels, coverage, assortments, locations, logistics (warehouse, inventory, transportation).
Marketing Mix - Promotion/Communication
- Activities that communicate product merits and persuade customers to buy: advertising, personal selling, sales promotion, public relations, and direct marketing.
Marketing Functions
- Marketing Planning
- Marketing Research
- Marketing Information / Intelligence Analysis
- Environmental Analysis
- Marketing Administration and Support
- Pricing
- Advertising and Sales Promotion
- Sales and Distribution
- Product/Service Development
- Marketing HR Development
- Procurement, Negotiations, and Stakeholder Relationship Management
What's Next?
- Tutorial: Review concepts, prepare tutorial week 1 questions, case application.
- Lecture: Marketing Environment.
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Description
Explore the essential concepts of marketing and its core principles in this quiz. You'll learn about marketing management, customer relationship management, and the marketing mix variables. Test your knowledge on how marketing differs from sales and advertising.
