Marketing in a Changing World: Creating Customer Value and Satisfaction

CHAPTER 1

What is Marketing?

CHAPTER 1

Process by which individuals and groups obtain what they needneed and want want through creating and exchanging exchanging

products products and value with others.

More simply: Marketing is the delivery of customer satisfaction at a profit.

MARKETING

Think of marketing as a bridgefrom the producer to the consumer.

production, advertising, transportation,processing, packaging, and selling -- are included in the

marketing process.

MARKETING

CORE MARKETING CONCEPTSCORE MARKETING CONCEPTS

Products and

Services

Value, satisfaction,and quality

Needs, wants,and demands

Exchange, transactions,and relationships

Markets

CoreMarketingConcepts

CoreMarketingConcepts

NeedsNeeds - state of felt deprivation for basic items such as food and clothing and complex needs such as for belonging. i.e. I am thirsty

WantsWants - form that a human need takes as shaped by culture and individual personality. i.e. I want a Coca-Cola.

DemandsDemands - human wants backed by buying power. i.e. I have money to buy a Coca-Cola.

WHAT MOTIVATES A CONSUMERTO TAKE ACTION?

ProductsProducts - anything that can be offered to a market for attention, acquisition, use or consumption and that might satisfy a need or want.

Examples: Car, Laptops, Shampoo, Electronic goods

ServicesServices - activities or benefits offered for sale that are essentially intangible and don’t result in the ownership of anything.

Examples: Education, banking, airlines, haircuts, and hotels.

WHAT WILL SATISFY CONSUMER’SNEEDS AND WANTS?

Customer ValueCustomer Value - benefit that the customer gains from owning and using a product compared to the cost of obtaining the product.

Customer SatisfactionCustomer Satisfaction - depends on the product’s perceived performance in delivering value relative to a buyer’s expectations.

Linked to Quality and Total Quality Management (TQM).

HOW DO CONSUMERS CHOOSE AMONG PRODUCTS AND SERVICES?

ExchangesExchanges - act of obtaining a desired object from someone by offering something in return.

RelationshipsRelationships - building long-term relationships with consumers, distributors, dealers, and suppliers.

HOW DO CONSUMERS CHOOSE AMONG PRODUCTS AND SERVICES?

WHO PURCHASES PRODUCTS AND SERVICES?

WHO PURCHASES PRODUCTS AND SERVICES?

Market - buyers who share a

particular need or want that canbe satisfied by a

company’s productsor services.

Market - buyers who share a

particular need or want that canbe satisfied by a

company’s productsor services.

Actual BuyersActual Buyers

PotentialBuyers

PotentialBuyers

MODERN MARKETING SYSTEMMODERN MARKETING SYSTEM

SuppliersSuppliers

End UserMarket

End UserMarket

MarketingIntermediaries

MarketingIntermediaries

CompetitorsCompetitors Company(Marketer)

Company(Marketer)

En

viro

nm

ent

En

viron

men

t

MARKETING MANAGEMENTMARKETING MANAGEMENT

Marketing ManagementImplementing programs to create exchangeswith target buyers to achieve organizational

goals

Finding and increasing demand, alsochanging or reducing demand

Demand Management

Attracting new customers and retaining current customers

Profitable Customer Relationships

MARKETING MANAGEMENTPHILOSOPHIES

MARKETING MANAGEMENTPHILOSOPHIES

Production ConceptProduction Concept

Product ConceptProduct Concept

Selling ConceptSelling Concept

Marketing ConceptMarketing Concept

Societal Marketing ConceptSocietal Marketing Concept

• Consumers favor products that are available and highly affordable•Improve production and distribution

•Consumers favor products that offer the most quality, performance, and innovative features

•Consumers will buy products only if the company promotes/ sells these product

•Focuses on needs/ wants of target markets & delivering satisfaction better than competitors

•Focuses on needs/ wants of target markets & delivering superior value•Society’s well-being

MARKETING & SALES CONCEPTS CONTRASTEDMARKETING & SALES

CONCEPTS CONTRASTED

FactoryExistingProducts

Sellingand

Promoting

ProfitsthroughVolume

MarketCustomer

NeedsIntegratedMarketing

Profitsthrough

Satisfaction

The Selling ConceptThe Selling Concept

The Marketing ConceptThe Marketing Concept

StartingPoint

Focus Means Ends

SOCIETAL MARKETING CONCEPTSOCIETAL MARKETING CONCEPT

Society(Human Welfare)

Society(Human Welfare)

Consumers(Wants)

Consumers(Wants)

Company(Profits)

Company(Profits)

SocietalMarketingConcept

SocietalMarketingConcept

Customer Relationship Management

Building relationships

Superior customer Value

Satisfaction

CRM Systems

Customer Perceived Value

Benefits & Cost relative to the competitors

Value = Benefits-Cost

INTEGRATED MARKETING PLAN AND PROGRAM

Customer Loyalty and RetentionCustomer Lifetime ValueMarket ShareCustomer EquityPartner Relationship management

IMPORTANT CONCEPTS TO REMEMBER

Marketers don’t want relationships with every possible customer. In fact, a company might want to “fire” customers that cost more to serve than to lose.

EmergingChallengesEmerging

Challenges

NonprofitMarketing

New Marketing

Landscape &InformationTechnology

EthicalConcerns Globalizatio

n

ChangingWorld

Economy

NEW MARKETING CHALLENGESNEW MARKETING CHALLENGES