Principles of Marketing PDF

Principles of Marketing Nineteenth Edition Chapter 1 Marketing: Creating Customer Value and Engagement Copyright © 2024, 2021, 2018 Pearson Education, Inc...

Principles of Marketing Nineteenth Edition Chapter 1 Marketing: Creating Customer Value and Engagement Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Learning Objectives 1.1 Define marketing and outline the steps in the marketing process. 1.2 Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. 1.3 Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. 1.4 Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. 1.5 Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved First Stop: Amazon Amazon does much more than just sell goods online. It engages customers and creates satisfying customer experiences. “The thing that drives everything is creating genuine value for customers,” says Amazon founder Jeff Bezos. © 1996–2021, Amazon.com, Inc. or its affiliates Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Learning Objective 1 Define marketing and outline the steps in the marketing process. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved What Is Marketing? (1 of 2) The set of strategies and activities by which companies acquire and engage customers, build strong customer relationships, and create superior customer value in order to capture value from customers in return. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved What Is Marketing? (2 of 2) Marketing is all around you, in good old traditional forms and in a host of newer forms, from websites and mobile apps to online videos and social media. Cathy Yeulet/123 R F Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Figure 1.1 The Marketing Process: Creating and Capturing Customer Value Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Learning Objective 2 Explain the importance of understanding the marketplace and customers and identify the five core marketplace concepts. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Understanding the Marketplace and Customer Needs (1 of 5) Needs are states of felt deprivation. Wants are the form human needs take as they are shaped by culture and individual personality. Demands are human wants that are backed by buying power. Staying close to customers: Starbucks C E O Kevin Johnson regularly spends time in local Starbucks stores, working the counter, brewing coffee, handing out orders, wiping tables, and chatting with customers. He wants to understand “what it means to A P Photo/Ted S. Warren be human in a digital age.” Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Understanding the Marketplace and Customer Needs (2 of 5) Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want. Marketing myopia—paying more attention to the specific products than to the benefits and experiences produced Marketing ideas and causes: The Ad Council’s “Texting and Driving Prevention” campaign addresses the disconnect between awareness and behavior by reminding drivers from 16 “Text and Whatever.” Pereira O’Dell for the to 34 that no one is special enough to National Highway Traffic Safety Administration and Ad Council’s Texting and message while driving. Driving Prevention campaign. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Real Marketing 1.1: Mahali Mzuri: An Immersive Experience at the World’s Number-One Hotel Marketing experiences: When it comes to delivering unforgettable experiences, few travel and hospitality businesses can match Kenya’s Mahali Mzuri safari camp, recently named by Travel + Leisure magazine as the “#1 hotel in the world.” Adam Slama Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Understanding the Marketplace and Customer Needs (3 of 5) Customers form expectations about the value and satisfaction of market offerings. – Satisfied customers buy again – Dissatisfied customers switch to competitors Exchange is the act of obtaining a desired object from someone by offering something in return. Marketing actions try to create, maintain, and grow desirable exchange relationships. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Understanding the Marketplace and Customer Needs (4 of 5) A market is the set of actual and potential buyers. Consumers market when they: search for products interact with companies to obtain information make purchases Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Understanding the Marketplace and Customer Needs (5 of 5) Figure 1.2 A Modern Marketing System Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Learning Objective 3 Identify the key elements of a customer value-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Designing a Customer Value-Driven Marketing Strategy and Plan (1 of 6) Marketing management is the art and science of choosing target markets and building profitable relationships with them. What customers will we serve (target market)? How can we best serve these customers (value proposition)? Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Designing a Customer Value-Driven Marketing Strategy and Plan (2 of 6) Value propositions: A brand’s value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs. Value propositions: JetBlue promises “award-winning service from award-winningly nice humans.” “Just Alright Doesn’t Fly Here.” Courtesy of JetBlue Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Designing a Customer Value-Driven Marketing Strategy and Plan (3 of 6) Figure 1.3 Selling and Marketing Concepts Contrasted Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Designing a Customer Value-Driven Marketing Strategy and Plan (4 of 6) Production concept Product concept Selling concept Marketing concept Societal Marketing concept The societal marketing concept: Jeni’s Splendid Ice Creams, L L C Jeni’s Splendid Ice Creams does more than just make good ice cream. It makes “ice creams created in fellowship with growers, makers, and producers from around the world all for the love of you.” Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Designing a Customer Value-Driven Marketing Strategy and Plan (5 of 6) Societal marketing: The company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests. Figure 1.4 Three Considerations Underlying the Societal Marketing Concept Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Designing a Customer Value-Driven Marketing Strategy and Plan (6 of 6) The marketing mix is comprised of a set of tools known a the four Ps: Product Price Promotion Place Integrated marketing program—a comprehensive plan that communicates and delivers intended value Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Learning Objective 4 Discuss customer relationship management and identify strategies for creating value for customers and capturing value from customers in return. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Managing Customer Relationships and Capturing Customer Value (1 of 9) Customer relationship management—the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Managing Customer Relationships and Capturing Customer Value (2 of 9) Relationship Building Blocks Customer-perceived value – The difference between total customer perceived benefits and customer cost Customer satisfaction – The extent to which perceived performance matches a buyer’s expectations Perceived value: Some owners consider a Patek Philippe watch a real bargain, even at prices ranging from $20,000 to $1,000,000 or more. “You never actually own a Patek Philippe. You merely look after it for the next generation.” Courtesy of Patek Philippe Geneva Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Managing Customer Relationships and Capturing Customer Value (3 of 9) Customer-Engagement Marketing Fosters direct and continuous customer involvement in shaping brand conversations, experiences, and community. Engaging customers: Rather than using intrusive, hard-sell product pitches, Bark interacts with customers in humorous ways about Benjamin Ginsberg/Alamy Stock Photo; their favorite mutual topic—“the Jonathan Weiss/Alamy Stock Photo weird dogs we live with and the funny things they do.” Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Managing Customer Relationships and Capturing Customer Value (4 of 9) Consumer-Generated Marketing Brand exchanges created by consumers themselves. Consumers are playing an increasing role in shaping brand experiences. Customer-generated content: Heinz invited people across five continents The Kraft Heinz Company to “draw ketchup.” Most drew Heinz. Many of the sketchers and their sketches—both sophisticated and amateurish— were featured in an online video and on digital billboards. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Managing Customer Relationships and Capturing Customer Value (5 of 9) Partner relationship management involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers. Relationship marketing tools: The American Airlines AAdvantage program promotes customer loyalty through numerous membership benefits. At the same time, it allows American to profit from multiple revenue streams. Ian Dagnall/Alamy Stock Photo Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Managing Customer Relationships and Capturing Customer Value (6 of 9) Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage. Customer lifetime value: To keep customers coming back, Stew Leonard’s has created the “Disneyland of dairy stores.” Rule #1—The customer is always right. Rule #2—If the customer is ever wrong, reread Rule #1. Courtesy of Stew Leonard’s Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Managing Customer Relationships and Capturing Customer Value (7 of 9) Share of customer is the portion of the customer’s purchasing that a company gets in its product categories. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Managing Customer Relationships and Capturing Customer Value (8 of 9) Customer equity is the total combined customer lifetime values of all of the company’s customers. Managing customer equity: To increase customer equity, Cadillac is making the classic car cool again among younger buyers. For example, says G M, “Cadillac will lead the company to an all-electric future.” Mark Andrews/Alamy Stock Photo Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Managing Customer Relationships and Capturing Customer Value (9 of 9) Figure 1.5 Customer Relationship Groups Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Learning Objective 5 Describe the major trends and forces that are changing the marketing landscape in this age of relationships. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved The Changing Marketing Landscape (1 of 5) Digital Age Changing Economic Environment Growth of Not-for-Profit Marketing Rapid Globalization Sustainable Marketing Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved The Changing Marketing Landscape (2 of 5) We live in the age of Internet of Things, where everything is connected to everything else. Digital and social media marketing involves using digital marketing tools such as websites, social media, mobile ads and apps, online videos, email, and blogs that engage consumers anywhere, at any time, via their digital devices. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved The Changing Marketing Landscape (3 of 5) Social media provide exciting opportunities to extend customer engagement and get people talking about a brand. Mobile marketing: Using mobile channels to stimulate immediate buying, make shopping easier, and enrich the brand experience. Big Data and A I: Brands can use big data to gain deep customer insights, personalize marketing offers, and improve customer engagements and service. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Digital and Social Media Marketing Online brand communities: Sephora’s Beauty Insider Community is a thriving online community where customers can ask questions, share ideas and reviews, post photos, and get beauty advice and inspiration from other enthusiasts. Manuel Esteban/Shutterstock; Eyal Dayan Photography Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Real Marketing 1.2: Real-Time Marketing: Engaging Consumers in the Moment Real-time marketing: Snack brand MoonPie is known for its skillful use of real-time social media marketing to create a fresh, relevant brand personality and spark ongoing real-time engagement with the brand’s fans. Courtesy of MoonPie Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved The Changing Marketing Landscape (4 of 5) Not-for-profit marketing is growing, as sound marketing can help organizations attract membership, funds, and support. Not-for-profit marketing: Make-A-Wish® skillfully markets its mission to “create life-changing wishes for children with critical illnesses.” Since its founding, Make-A-Wish has fulfilled more than 520,000 wishes to children at dark times in their lives, bringing them welcome rays of light Make-A-Wish America and hope that can play an important part in their healing. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved The Changing Marketing Landscape (5 of 5) Rapid Globalization: Managers around the world are taking both local and global views of the company’s – Industry – Competitors – Opportunities Sustainable Marketing: Corporate ethics and social responsibility have become important for every business. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Sustainable Marketing: The Call for More Environmental and Social Responsibility Today’s consumers expect marketers to be socially and environmentally responsible. Sustainable marketing: Ben & Jerry’s three-part “linked prosperity” mission drives it to make fantastic ice cream (product mission), manage the company for sustainable financial growth (economic mission), and use the company in “innovative ways to make the world a better place” (social mission). Both Ben & Jerry’s and its products are “Made Ben & Jerry’s Homemade Inc. of Something Better.” Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved So, What Is Marketing? Pulling It All Together Figure 1.6 An Expanded Model of the Marketing Process Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Discussion Question (1 of 2) What are the major changes taking place in the marketing arena? Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Discussion Question (2 of 2) What skills will you develop by studying marketing? Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved Copyright This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work (including on the World Wide Web) will destroy the integrity of the work and is not permitted. The work and materials from it should never be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor the intended pedagogical purposes and the needs of other instructors who rely on these materials. Copyright © 2024, 2021, 2018 Pearson Education, Inc. All Rights Reserved