Introduction to Marketing PDF

Introduction to Marketing Learning Objectives After studying this chapter, you should be able to: 1. Define marketing and outline the steps in the marketing process 2. Explain the importance of understanding customers 3. Identify the key elements 4. Discuss cus...

Introduction to Marketing Learning Objectives After studying this chapter, you should be able to: 1. Define marketing and outline the steps in the marketing process 2. Explain the importance of understanding customers 3. Identify the key elements 4. Discuss customer relationship management 5. Describe the major trends and forces 1-2 5 Amazon “The thing that Amazon.com drives does much everything is more than just creating sell goods genuine value online. It for creates customers,” satisfying says Amazon online founder and customer CEO Jeff experiences. Bezos 6 Visit Amazon.in https://www.amazon.in 7 Discuss 1. How does Amazon.in succeed in creating unique customer “discovery” experiences with each product search? 2. Based on your study of Amazon.in, do you believe that customers really want long-term relationships with a company, rather than short-term bargains? Why or why not? 8 Chapter Concepts ￮ What Is Marketing? ￮ Understanding the Marketplace and Customer Needs ￮ Designing a Customer-Driven Marketing Strategy ￮ Preparing an Integrated Marketing Plan and Program ￮ Building Customer Relationships ￮ Capturing Value from Customers ￮ The New Marketing Landscape ￮ So, What Is Marketing? Pulling It All Together 1-3 9 What Is Marketing? Engaging Customers and managing profitable customer relationships. 10 You Already Know Marketing! 11 Much More than Meets The Eye… ￮ Almost everywhere: home, work, play ￮ More to Marketing than what meets the eye ￮ Behind the scenes – massive network. ￮ People ￮ Technologies ￮ Activities ￮ All competing for your attention & purchase 12 The Marketing Process 1. Understand the marketplace and customer wants and needs 2. Design a customer-driven marketing strategy 3. Construct a marketing plan that delivers superior value 4. Build profitable relationships and create customer satisfaction 5. Capture value from customers to create profit and customer equity 13 Marketing Defined Broadly Defined Marketing is a social and managerial process by which individuals and organizations obtain what they need and want through creating and exchanging value with others. 1-4 14 Marketing Defined Business Context Marketing is the process by which companies create value for customers and build strong customer relationships to capture value from customers in return 1-4 15 Peter Drucker (1909 – 2005) “The aim of marketing is to make selling unnecessary.” In the world of management gurus there is no debate. Peter Drucker is the one guru to whom other gurus kowtow. - McKinsey Quarterly declared in 1997 16 The Marketing Process (1) Understand the marketplace and customer wants and needs (2) Design a customer-driven marketing strategy (3) Construct a marketing plan that delivers superior value (4) Build profitable relationships and create customer satisfaction (5) Capture value from customers to create profit and customer equity 17 Core Cust. & Marketplace Concepts 1. Needs, wants, and demands 2. Marketing offerings i. Products ii. Services iii. Experiences 3. Value and satisfaction 4. Exchanges and relationships 5. Markets. 18 Customer Needs, Wants, and Demands ￮ Needs are states of deprivation ￮ Physical — food, clothing, warmth, safety ￮ Social — belonging and affection ￮ Individual — knowledge and self-expression 1-6 19 Customer Needs, Wants, and Demands Wants are the form that needs take as they are shaped by culture and individual personality Demands are wants backed by buying power 1-7 20 Staying Close to Customers: Visits the company’s restaurants, working in the dining room and engaging customers to learn about “the good, the bad, and the ugly.” Boston Market CEO George Michel 21 Market Offerings ￮ Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need or want. 1-8 22 Market Offerings (Cont.) ￮ Marketing myopia is focusing only on existing wants and losing sight of underlying consumer needs ￮ Exchange is the act of obtaining a desired object from someone by offering something in return 1-9 23 Customer Value and Satisfaction Expectations ￮ Customers Expect: Value & satisfaction ￮ Marketers: ￮ Set the right level of expectations: ￮ Not too high or too low 1-10 24 Exchanges and Relationships ￮ Exchange is the act of obtaining a desired object from someone by offering something in return ￮ Relationships consist of actions to build and maintain desirable relationships 1-11 25 The Marketplace & Customer Needs ￮ Markets are the set of actual and potential buyers of a product ￮ Marketing system consists of all of the actors (suppliers, company, competitors, intermediaries, and end users) in the system who are affected by major environmental forces 26 Major Environmental Forces 27 The Marketplace & Customer Needs Major environmental forces ￮ Demographic ￮ Economic ￮ Physical ￮ Technological ￮ Political–legal ￮ Socio-cultural 28 Marketing Management ￮ Marketing management is the art and science of choosing target markets and building profitable relationships with them ￮ What customers will we serve? ￮ How can we best serve these customers? 1-13 29 Selecting Customers to Serve ￮ Market segmentation: Dividing the markets into segments of customers ￮ Target marketing: Which segments to go after 30 Selecting Customers to Serve ￮ Marketing management is: ￮ Customer management ￮ Demand management 31 Choosing a Value Proposition ￮ The value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needs 1-17 32 Marketing Mix ￮ The marketing mix is the set of tools (4 Ps) the firm uses to implement its marketing strategy ￮ Product ￮ Price ￮ Promotion ￮ Place 33 Integrated Marketing Program ￮ Integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers. 34 Customer Relationship Management (CRM) ￮ Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior value and satisfaction 35 Customer Relationship Management (CRM) ￮ Customer perceived value is the difference between total customer value and total customer cost ￮ Customer satisfaction is the extent to which a product’s perceived performance matches a buyer’s expectations 36 Customer Relationship Levels & Tools ￮ Basic relationship ￮ Full partnerships ￮ Frequency marketing programs ￮ Club marketing programs 1-28 37 The Changing Nature of Customer Relationships ￮ Relating with more carefully selected customers uses selective relationship management to target fewer, more profitable customers 1-29 38 The Changing Nature of Customer Relationships ￮ Relating for the long term uses customer relationship management to: ￮ Retain current customers and. ￮ Build profitable, long-term relationships. 39  The Changing Nature of Customer Relationships ￮ Relating directly uses direct marketing tools to make direct connections with customers : ￮ Telephone ￮ mail order ￮ Kiosks ￮ Internet 40 Partner Relationship Management ￮ Partner relationship management refers to working closely with partners in other company departments and outside the company to jointly bring greater value to customers. 41 Partner Relationship Management ￮ Partners inside the company is every function area interacting with customers: ￮ Electronically ￮ Cross-functional teams ￮ Partners outside the company is how marketers connect with their suppliers, channel partners, and competitors by developing partnerships. 42 Partner Relationship Management ￮ Supply chain is a channel that stretches from raw materials to components to final products to final buyers ￮ Supply management ￮ Strategic partners ￮ Strategic alliances 43 Capturing Value from Customers ￮ Customer lifetime value (CLV) is the value of the entire stream of purchases that the customer would make over a lifetime of patronage 1-33 44 Growing Share of Customer ￮ Share of customer is the portion of the customer’s purchasing that a company gets in its product categories 45 Building Customer Equity ￮ Customer equity is the total combined customer lifetime values of all of the company’s customers 46 Building Customer Equity ￮ Building the right relationships with the right customers involves treating customers as assets that need to be managed and maximized ￮ Different types of customers require different relationship management strategies ￮ Build the right relationship with the right customers 47 Major Developments ￮ Digital age ￮ Globalization ￮ Ethics and social responsibility ￮ Not-for-profit marketing ￮ Global Pandemic 1-37 48 The New Digital Age ￮ Recent technology has had a major impact on the ways marketers connect with and bring value to their customers ￮ Market research ￮ Learning about and tracking customers ￮ Create new customized products ￮ Distribution ￮ Communication ￮ Video conferencing ￮ Online data services 49 The New Digital Age ￮ Internet—creates marketplaces and marketspaces ￮ Information ￮ Entertainment ￮ Communication 50 Rapid Globalization ￮ The world is smaller ￮ Think globally, act locally 1-40 51 The Call for More Ethics and Social Responsibility ￮ Marketers are being called upon to take greater responsibility for the social and environmental impact of their actions in a global economy ￮ Social marketing campaigns encourage energy conservation and concern for the environment or discourage smoking, excessive drinking, and drug use. 1-42 52 The Growth for Not-for-Profit Marketing ￮ Colleges ￮ Hospitals ￮ Museums ￮ Zoos ￮ Orchestras ￮ Religious groups 1-43 53 Pulling it all together Marketing is the process of building profitable customer relationships by creating value for customers and capturing value in return. 54 The Marketing Process 55 Pulling it all together (Cont.) The first four steps in the marketing process: create value for customers. The final step in the proces: allows the company to capture value from customers. 56 Pulling it all together (Cont.) When building customer and partner relationships, companies must: Harness marketing technology Take advantage of global opportunities, Act in an ethical and socially responsible way. 57 Thank you!