Principles Of Marketing Chapter 1 PDF

PRINCIPLES OF MARKETING Chapter 1 Marketing: Creating Customer Value and Engagement Copyright © 2021 Pearson Education Ltd.  1.1 Define marketing and outline the...

PRINCIPLES OF MARKETING Chapter 1 Marketing: Creating Customer Value and Engagement Copyright © 2021 Pearson Education Ltd.  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 LEARNING strategy and discuss the marketing management orientations that guide OBJECTIVES 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 © 2021 Pearson Education Ltd. Mini Case Study Qatar Airways and Emirates Airlines: Marketing Masterclasses Copyright © 2021 Pearson Education Ltd.  WHAT IS MARKETING? The twofold goal of marketing is to: Marketing is a process by which companies ᵃᵗᵗʳᵃᶜᵗ ⁿᵉʷ ᶜᵘˢᵗᵒᵐᵉʳˢ ᵇʸ create value for ᵖʳᵒᵐᶦˢᶦⁿᵍ ˢᵘᵖᵉʳᶦᵒʳ ᵛᵃˡᵘᵉ customers and build strong customer relationships in order to ᵍʳᵒʷ ᶜᵘʳʳᵉⁿᵗ ᶜᵘˢᵗᵒᵐᵉʳˢ ᵇʸ capture value from ᵈᵉˡᶦᵛᵉʳᶦⁿᵍ ˢᵃᵗᶦˢᶠᵃᶜᵗᶦᵒⁿ customers in return. Copyright © 2024 Pearson Education Ltd. All Rights Reserved. Copyright © 2021 Pearson Education Ltd. WHAT IS MARKETING? Marketing is all around you, in good old traditional forms and in a host of new forms, from websites and mobile apps to online videos and social media. Copyright © 2021 Pearson Education Ltd.  FIGURE 1.1 THE MARKETING PROCESS: CREATING AND CAPTURING CUSTOMER VALUE Copyright © 2021 Pearson Education Ltd.  UNDERSTANDING THE MARKETPLACE AND CUSTOMER NEEDS 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. Copyright © 2021 Pearson Education Ltd.  UNDERSTANDING THE MARKETPLACE AND CUSTOMER NEEDS 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 Copyright © 2021 Pearson Education Ltd. Copyright © 2021 Pearson Education Ltd. UNDERSTANDING THE MARKETPLACE AND CUSTOMER NEEDS 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 © 2021 Pearson Education Ltd.  UNDERSTANDING THE MARKETPLACE AND CUSTOMER NEEDS 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 © 2021 Pearson Education Ltd.  UNDERSTANDING THE MARKETPLACE AND CUSTOMER NEEDS FIGURE 1.2 A MODERN MARKETING SYSTEM Copyright © 2021 Pearson Education Ltd.  DESIGNING A CUSTOMER VALUE- DRIVEN MARKETING STRATEGY 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 © 2021 Pearson Education Ltd. Copyright © 2021 Pearson Education Ltd.  DESIGNING A CUSTOMER VALUE- DRIVEN MARKETING STRATEGY 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.” Copyright © 2021 Pearson Education Ltd.  DESIGNING A CUSTOMER VALUE- DRIVEN MARKETING STRATEGY Production concept Product concept Selling concept Marketing concept Societal Marketing concept Copyright © 2021 Pearson Education Ltd. MARKETING MANAGEMENT ORIENTATIONS The production concept Consumers will favour products that are available and highly affordable management should focus on improving production and distribution efficiency The product concept Consumers will favor products that offer the most in quality, performance and innovative features marketing strategy focus on making continuous product improvements. Copyright © 2021 Pearson Education Ltd. MARKETING MANAGEMENT ORIENTATIONS The selling concept Consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort. Typically practiced with unsought goods High risks: focuses on creating sales transactions rather than on building long-term, profitable customer relationships Aim is to sell rather than making what the market wants The marketing concept Achieving organizational goals depends on knowing the needs and wants of target markets Delivering the desired satisfactions better than competitors do Copyright © 2021 Pearson Education Ltd. MARKETING MANAGEMENT ORIENTATIONS The Societal Marketing Concept The idea that a company’s marketing decisions should consider consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests. Copyright © 2021 Pearson Education Ltd.  DESIGNING A CUSTOMER VALUE- DRIVEN MARKETING STRATEGY 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 © 2021 Pearson Education Ltd. DESIGNING A CUSTOMER VALUE- DRIVEN MARKETING STRATEGY FIGURE 1.3 SELLING AND MARKETING CONCEPTS CONTRASTED Copyright © 2021 Pearson Education Ltd.  DESIGNING A CUSTOMER VALUE- DRIVEN MARKETING STRATEGY 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 © 2021 Pearson Education Ltd. GRACE KENNEDY'S IMC Copyright © 2021 Pearson Education Ltd.  MANAGING CUSTOMER RELATIONSHIPS AND CAPTURING CUSTOMER VALUE Customer relationship management—the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Copyright © 2021 Pearson Education Ltd.  MANAGING CUSTOMER RELATIONSHIPS AND CAPTURING CUSTOMER VALUE 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 Copyright © 2021 Pearson Education Ltd.  MANAGING CUSTOMER RELATIONSHIPS AND CAPTURING CUSTOMER VALUE 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, Netflix interacts with customers in personalized ways, inspiring conversations and fostering relationships. Copyright © 2021 Pearson Education Ltd.  MANAGING CUSTOMER RELATIONSHIPS AND CAPTURING CUSTOMER VALUE Consumer-Generated Marketing Brand exchanges created by consumers themselves. Consumers are playing an increasing role in shaping brand experiences. Copyright © 2021 Pearson Education Ltd.  MANAGING CUSTOMER RELATIONSHIPS AND CAPTURING CUSTOMER VALUE Partner relationship management involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers. Copyright © 2021 Pearson Education Ltd.  MANAGING CUSTOMER RELATIONSHIPS AND CAPTURING CUSTOMER VALUE 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. Copyright © 2021 Pearson Education Ltd.  Share of customer is the portion of the customer’s purchasing that a company gets in its product categories. MANAGING Customer equity is the total combined CUSTOMER customer lifetime values of all of the RELATIONSHIPS company’s customers. AND CAPTURING CUSTOMER VALUE Managing customer equity: To increase customer equity, Cadillac is making the classic car cool again among younger buyers. For example, says GM, “Cadillac will lead the company to an all-electric future.” Copyright © 2021 Pearson Education Ltd.  MANAGING CUSTOMER RELATIONSHIPS AND CAPTURING CUSTOMER VALUE FIGURE 1.5 CUSTOMER RELATIONSHIP GROUPS Copyright © 2021 Pearson Education Ltd.  THE CHANGING MARKETING LANDSCAPE Digital Age Changing Economic Environment Growth of Not-for-Profit Marketing Rapid Globalization Sustainable Marketing Copyright © 2021 Pearson Education Ltd.  THE CHANGING MARKETING LANDSCAPE 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 © 2021 Pearson Education Ltd.  THE CHANGING MARKETING LANDSCAPE 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 AI: Brands can use big data to gain deep customer insights, personalize marketing offers, and improve customer engagements and service. Copyright © 2021 Pearson Education Ltd.  THE CHANGING MARKETING LANDSCAPE Not-for-profit marketing is growing, as sound marketing can help organizations attract membership, funds, and support. Copyright © 2021 Pearson Education Ltd.  THE CHANGING MARKETING LANDSCAPE 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 © 2021 Pearson Education Ltd. SO, WHAT IS MARKETING? PULLING IT ALL TOGETHER Figure 1.6 An Expanded Model of the Marketing Process Copyright © 2021 Pearson Education Ltd. What skills will you develop by DISCUSSION studying marketing? QUESTION Copyright © 2021 Pearson Education Ltd.