Chapter 1-Creating Customer Relationships and Value through Marketing PDF

CHAPTER 1 Creating Customer Relationships and Value through Marketing ©Glenn van der Knijff/Getty Images  LEARNING OBJECTIVES After reading Chapter 1, you should be able to: 1. Define marketing and identify the diverse factors influencin...

CHAPTER 1 Creating Customer Relationships and Value through Marketing ©Glenn van der Knijff/Getty Images  LEARNING OBJECTIVES After reading Chapter 1, you should be able to: 1. Define marketing and identify the diverse factors influencing marketing actions. 2. Explain how marketing discovers and satisfies consumer needs. 3. Distinguish between marketing mix factors and environmental forces. 4. Explain how organizations build strong customer relationships and customer value through marketing. © McGraw Hill LLC 2  BOMBAS IS SOLVING SOCIAL PROBLEMS WITH GREAT SOCKS AND GREAT MARKETING! Bombas – Comfortable socks with a mission. Bombas has sales of $250 million and has donated 50 million pairs of socks to homeless shelters! Buy-one-give-one model. Creating better, comfortable socks. Building a brand with a purpose. Expanded distribution and Bombas product lines. © McGraw Hill LLC Courtesy of Bombas 3  WHAT IS MARKETING? 1 You are a marketing expert already. Involved in thousands of buying decisions. Involved in some selling decisions. Good marketing is NOT easy. Every year, thousands of new products fail. © McGraw Hill LLC 4  WHAT IS MARKETING? 2 Marketing and your career Goal is to “Do Marketing!”. Marketing has many applications. Marketing will help you be a better consumer and help in career planning. You too could start a successful business! © McGraw Hill LLC Reuters/Alamy Stock Photo 5  MARKETING: DELIVERING VALUE TO CUSTOMERS Marketing seeks to: 1.Discover needs and wants of customers 2.Satisfy them AMA Definition of Marketing © McGraw Hill LLC 6  DIVERSE ELEMENTS INFLUENCE MARKETING ACTIONS In an organization, management establishes goals. Marketing works closely with other departments to provide products and services. Marketing facilitates relationships. Marketing decisions are affected by environmental forces. © McGraw Hill LLC 7 FIGURE 1-2 A marketing department relates to many people, organizations, and environmental forces. Access the text alternative for slide images. © McGraw Hill LLC 8  WHAT IS NEEDED FOR MARKETING TO OCCUR? 1. Two or more parties with unsatisfied needs. 2. Desire and ability to be satisfied. 3. A way for the parties to communicate. 4. Something to exchange. © McGraw Hill LLC 9 HOW MARKETING DISCOVERS CONSUMER NEEDS The challenge: Meeting consumer needs with new products. Consumers may not know or cannot describe what they need or want. 38,000 new products are introduced each month. 40% of new products fail! The challenge: “Focus on the consumer benefit”. “Learn from past mistakes”. © McGraw Hill LLC 10 HOW MARKETING DISCOVERS CONSUMER NEEDS: NEEDS VS. WANTS Needs - basic necessities Wants – shaped by knowledge, personality, culture Does marketing persuade people to buy the “wrong” things? Market Marketing concentrates efforts on certain needs of a specific group of potential consumers (target market). © McGraw Hill LLC Michael Neelon Food/Alamy Stock Photo 11 FIGURE 1-3 Marketing seeks to discover consumer needs through research and then satisfy them with a marketing program. Access the text alternative for slide images. © McGraw Hill LLC 12  HOW MARKETING SATISFIES CONSUMER NEEDS: THE FOUR Ps Target market The 4 Ps: Controllable marketing mix factors Product – goods, services, or ideas. Price – what is exchanged for product. Promotion – communication between seller and buyer. Place – means of getting product to consumer. © McGraw Hill LLC 13 HOW MARKETING DISCOVERS CONSUMER NEEDS: ENVIRONMENTAL FORCES Customer value proposition Uncontrollable environmental forces Social. Competitive. Economic. Regulatory. Technological. © McGraw Hill LLC 14  THE MARKETING PROGRAM: HOW CUSTOMER RELATIONSHIPS ARE BUILT Customer value – Gain loyal customers by providing unique value. Best price: Target. © McGraw Hill LLC 15  THE MARKETING PROGRAM: HOW CUSTOMER RELATIONSHIPS ARE BUILT Customer value – Gain loyal customers by providing unique value. Best product: Starbucks. © McGraw Hill LLC 16  THE MARKETING PROGRAM: HOW CUSTOMER RELATIONSHIPS ARE BUILT Customer value – Gain loyal customers by providing unique value. Best service: Nordstrom. © McGraw Hill LLC 17  THE MARKETING PROGRAM: RELATIONSHIP MARKETING Relationship marketing Easy to understand. But hard to do. Marketing program Market segments © McGraw Hill LLC Paul Hilton/Bloomberg/Getty Images 18  3M’S STRATEGY AND MARKETING PROGRAM: DISCOVERING AND SATISFYING STUDENT STUDY NEEDS “How do college students really study?” Observe, question, develop ideas. Move from ideas to a marketable highlighter product. Add the Post-it® Flag pen. Develop a marketing program for the Post-it® Flag Highlighter and 3M pen. Post-it Flag Highlighter © McGraw Hill LLC Mike Hruby/McGraw Hill 19 FIGURE 1-4 Marketing programs for two new 3M Post-it® brand products targeted at college students and office workers Access the text alternative for slide images. © McGraw Hill LLC 20 FIGURE 1-4 Marketing programs for two new 3M Post-it® brand products targeted at college students and office workers Access the text alternative for slide images. © McGraw Hill LLC 21  HOW MARKETING BECAME SO IMPORTANT: EVOLUTION OF THE MARKET ORIENTATION Four distinct stages: 1. Production era – Goods were scarce 2. Sales era – Manufacturers produced more goods than buyers could consumer 3. Marketing concept era – Manufacturers met consumer needs while achieving organization’s goals 4. Customer relationship era – Satisfy high consumer expectations Market orientation Customer relationship management (CRM) Customer experience © McGraw Hill LLC 22 FIGURE 1-5 Four different orientations in the history of American business Access the text alternative for slide images. © McGraw Hill LLC 23  HOW MARKETING BECAME IMPORTANT: ETHICS AND SOCIAL RESPONSIBILITY Ethics: Companies develop codes of ethics, policies, and guidelines Societal marketing concept © McGraw Hill LLC Phelan M. Ebenhack/AP Images 24  HOW MARKETING BECAME IMPORTANT BREADTH AND DEPTH OF MARKETING 1 Who markets? Every organization. What is marketed? Products. Goods. Services. Ideas. Hermitage Tour © McGraw Hill LLC 25  HOW MARKETING BECAME IMPORTANT BREADTH AND DEPTH OF MARKETING 2 Who buys and uses what is marketed? Ultimate consumers Organizational buyers Who benefits? Consumers, organizations that sell, society as a whole. How do consumers benefit? Utility: Benefit or value received by buyers. Form, place, time, and possession utilities. © McGraw Hill LLC 26  VIDEO CASE 1 Bombas: Creating Socks with a Purpose! Bombas Video Case © McGraw Hill LLC Kevin Hagen/The New York Times/Redux 27  VIDEO CASE 1 Bombas 1. How did Bombas’s founders Randy Goldberg and David Heath create customer value when they started their apparel company by selling socks? 2. What are the key elements of Bombas’s “four Ps” marketing strategy? 3. Describe possible future marketing actions Bombas should consider. © McGraw Hill LLC 28  Exchange Exchange is the trade of things of value between a buyer and a seller so that each is better off after the trade. © McGraw Hill LLC 29  Market A market consists of people with both the desire and the ability to buy a specific offering. © McGraw Hill LLC 30  Target Market A target market consists of one or more specific groups of potential consumers toward which an organization directs its marketing program. © McGraw Hill LLC 31  Marketing Mix The marketing mix consists of the marketing manager’s controllable factors—product, price, promotion, and place—that can be used to solve a marketing problem. © McGraw Hill LLC 32  Market Orientation Market orientation focuses on efforts on (1) continuously collecting information about customers’ needs, (2) sharing this information across departments, and (3) using it to create customer value. © McGraw Hill LLC 33  Customer Value Proposition Customer value proposition is the cluster of benefits that an organization promises customers to satisfy their needs. © McGraw Hill LLC 34  Environmental Forces Environmental forces are the uncontrollable forces that affect a marketing decision and consist of social, economic, technological, competitive, and regulatory forces. © McGraw Hill LLC 35  Customer Value Customer value is the unique combination of benefits received by targeted buyers that includes quality, convenience, on-time delivery, and both before-sale and after-sale service at a specific price. © McGraw Hill LLC 36  Relationship Marketing Relationship marketing links the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefit. © McGraw Hill LLC 37  Marketing Program A marketing program is a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers. © McGraw Hill LLC 38  Market Segments Market segments are the relatively homogeneous groups of prospective buyers that (1) have common needs and (2) will respond similarly to a marketing action. © McGraw Hill LLC 39  Marketing Concept A marketing concept is the idea that an organization should (1) strive to satisfy the needs of consumers and (2) while also trying to achieve the organization’s goals. © McGraw Hill LLC 40  Customer Relationship Management (CRM) Customer relationship management (CRM) is the process of identifying prospective buyers, understanding them intimately, and developing favorable long-term perceptions of the organization and its offerings so that buyers will choose them in the marketplace. © McGraw Hill LLC 41  Customer Experience Customer experience is the internal response that customers have to all aspects of an organization and its offering. © McGraw Hill LLC 42  Societal Marketing Concept Societal marketing concept is the view that organizations should satisfy the needs of consumers in a way that provides for society’s well-being. © McGraw Hill LLC 43  Product A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers’ needs and is received in exchange for money or something else of value. © McGraw Hill LLC 44  Ultimate Consumers Ultimate consumers consist of the people who use the products and services purchased for a household. Also called consumers, buyers, or customers. © McGraw Hill LLC 45  Organizational Buyers Organizational buyers are those manufacturers, wholesalers, retailers, and government agencies that buy products and services for their own use or for resale. © McGraw Hill LLC 46  Utility Utility consists of the benefits or customer value received by users of the product. © McGraw Hill LLC 47  End of Main Content ® Because learning changes everything. www.mheducation.com © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC.