Fundamentals of Marketing - BSU 2024 PDF

Fundamentals of Marketing By Prof. Mansour Lotayif BSU, 2024 1-0 Marketing: Managing Profitable Customer Relationships Chapter 1 1-1  Objectives Be able to define marketing and discuss its core co...

Fundamentals of Marketing By Prof. Mansour Lotayif BSU, 2024 1-0 Marketing: Managing Profitable Customer Relationships Chapter 1 1-1  Objectives Be able to define marketing and discuss its core concepts. Be able to define marketing management and compare the five marketing management orientations. 1-2  Objectives Understand customer relationship management and strategies. Realize the major challenges facing marketers in the new “connected” millennium. 1-3  What is Marketing? Marketing is managing profitable customer relationships  Attracting new customers  Retaining and growing current customers “Marketing” is NOT synonymous with “sales” or “advertising” 1-4  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.” 1-5  What is Marketing? Many Things Can Be Marketed! Goods Places Services Properties Experiences Organizations Events Information Persons Ideas 1-6  What is Marketing? Core Marketing Concepts Needs, wants, Value and and demands satisfaction Marketing offers: Exchange, including transactions and products, relationships services and experiences Markets 1-7  Figure 1-1: Core Marketing Concepts 1-8  Needs…..a stat of felt deprivation; Wants….the form taken by human need as shaped by culture and individual personality; Demands…human wants that are backed by buying power; Marketing Offer …some combination of products, services, information, or experiences offered to a market to satisfy a need or want; Exchange…the act of obtaining a desired object from someone by offering something in return; Transaction…a trade of value between two parties; and Market.. the set of all actual and potential buyers of a product. 1-9  Figure 1-2: Elements of a Modern Marketing System 1 - 10 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. 1 - 11 Marketing Management Customer Management:  Marketers select customers that can be served well and profitably. Demand Management:  Marketers must deal with different demand states ranging from no demand to too much demand.  Demarketing…Marking to reduce demands temporary or permanently; the aim is not to destroy demand but only to reduce or shift it. 1 - 12 Marketing Management Marketing Management Management Orientations Production Selling concept concept Marketing Product concept concept Societal marketing concept 1 - 13 Marketing Management Production Management Product Concept Orientations Concept Selling Marketing Concept Concept Societal Marketing Concept 1 - 14  Production Concept …The idea that customers will favor products that are available and highly affordable; Product Concept …The idea that consumers will favor product that offer the most quality, performance, and features that the organization should therefore devote its energy to making continuous improvements; 1 - 15  Selling Concept …The idea that customers will NOT buy enough of the organization’s product unless the organization undertakes a long-scale selling and promotion effort. Marketing Concept..The marketing management philosophy that holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more efficiency and effectively than competitors do; and 1 - 16  Figure 1-3: The Selling and Marketing Concepts Contrasted 1 - 17  Societal Marketing Concept …The idea that the organization should determine the needs, wants, and interests of target markets and deliver the desired satisfactions more effectively and efficiently than do competitors in a way that maintains or improves the customer's and society’s well-being. 1 - 18  Figure 1-4: Considerations Underlying the Societal Marketing Concept 1 - 19  CRM CRM – Customer relationship management... “is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.” 1 - 20  CRM It costs 5 to 10 times MORE to attract a new customer than it does to keep a current customer satisfied. Marketers must be concerned with the lifetime value of the customer. Rule (1)..the customer is always right. Rule (2)..if the customer is ever wrong, read rule one 1 - 21  Think in: Customer Perceived Value …The difference between total customer value and total customer cost; Customer Satisfaction …The extent to which a product’s perceived performance matches a buyer’s expectations. 1 - 22  CRM Customer value/satisfaction Key Concepts  Perceptions are key  Meeting/exceeding expectations creates Attracting, satisfaction Loyalty and retention retaining and  Benefits of loyalty growing customers  Loyalty increases as satisfaction levels increase Building customer  Delighting consumers should be the goal relationships and Growing share of customer customer equity  Cross-selling 1 - 23  CRM Customer equity Key Concepts  The total combined customer lifetime values of all Attracting, customers. retaining and  Measures a firm’s growing customers performance, but in a manner that looks Building customer to the future, as sales and market share relationships and reflect the past. customer equity 1 - 24  CRM Customer relationship levels and tools  Target market typically dictates type of relationship  Basic relationships in markets with many customers with low Key Concepts  margin; and Full relationships in markets with few customers and high margin. Attracting,  Customer loyalty and retention programs retaining and  Adding financial benefits (reward customers who buy growing customers  frequently) Adding social benefits (club marketing programs that Building customer offers members special discounts) relationships and  Adding structural ties (supply customers with computers or customer equity special equipments that help them manage their orders, payroll or inventory) 1 - 25  Marketing Challenges Technological advances, rapid globalization, and continuing social and economic shifts are causing marketplace changes. Major marketing developments can be grouped under the theme of Connecting. 1 - 26  Figure 1-6: Today’s Marketing Connections 1 - 27  Marketing Challenges Connecting Advances in computers, telecommunications, video-conferencing, etc. Via technology are major forces.  Databases allow for With customers customization of products, messages and analysis of needs. With marketing The Internet partners  Facilitates anytime, anywhere connections With the world  Facilitates CRM  Creates market spaces 1 - 28  Marketing Challenges Connecting Selective relationship management is key.  Customer profitability Via technology analysis separates winners from losers. With customers Growing “share of With marketing customer”  Cross-selling and up- partners selling are helpful. With the world Direct sales to buyers are growing. 1 - 29  Marketing Challenges Connecting Partner relationship management involves: Via technology  Connecting inside the company With customers  Connecting with outside partners With marketing  Supply chain partners management  Strategic alliances With the world 1 - 30  Marketing Challenges Globalization Connecting  Competition  New opportunities Via technology Greater concern for environmental and With customers social responsibility With marketing Increased marketing by nonprofit and partners public-sector entities With the world  Social marketing campaigns 1 - 31  Case Study Amazon.com Strong sales, no Provides great profits selection, good Customer-driven to value, discovery its core and convenience Each customer’s A true online experience is unique community Discussion: Will Amazon.com Survive? 1 - 32  BusinessNow SatMetrix Video Clip View what the experts have to say about customer loyalty and the bottom line. Click the picture above to play video 1 - 33 Other’s Benefits Win Win-Lose Win-Win Lose-Lose Lose-Win Lose Win My Benefits 1 - 34  Success Ladder Partner Advocate i.e. Believer Promoter Customer keeping by Supporter developing relationship Client Supplier/Customer Emphasis on Prospect customer catching 1 - 35