CBT Course, Session 4 RAC Cairo Al Orouba

1. It’s time to create what you want to be a part of

3. Big Picture
A Place to Your thoughts
Think
Shape
Stretch
Land
Fly

4. Course Overview
Business
Marketing

5. Creating and Capturing Customer
Value

6. Creating and Capturing Customer Value
• What Is Marketing?
• Understand 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 Changing Marketing Landscape
Topic Outline

7. What Is Marketing?
Marketing is a process by which companies
create value for customers and build
strong customer relationships to capture
value
from customers in
return

8. What Is Marketing?
The Marketing Process

9. Understanding the Marketplace
and Customer Needs
• Customer needs, wants, and demands
• Market offerings
• Value and satisfaction
• Exchanges and relationships
• Markets
Core Concepts

10. Understanding the Marketplace
and Customer Needs
•States of deprivation
•Physical—food, clothing, warmth, safety
•Social—belonging and affection
•Individual—knowledge and self-expression
Needs
•Form that needs take as they are shaped by culture and
individual personalityWants
•Wants backed by buying power
Demands
Customer Needs, Wants, and Demands

11. 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 is
focusing only on existing
wants and losing sight of
underlying consumer
needs

12. Understanding the Marketplace
and Customer NeedsCustomer Value and Satisfaction
Expectations
Customers
• Value and
satisfaction
Marketers
• Set the right level of
expectations
• Not too high or low

13. Understanding the Marketplace
and Customer Needs
Markets are the set of actual and
potential buyers of a product

14. Designing a Customer-Driven Marketing
Strategy
Market segmentation refers to dividing the
markets into segments of customers
Target marketing refers to which segments to
go after
Selecting Customers to Serve

15. Designing a Customer-Driven Marketing
Strategy
Demarketing is marketing to reduce demand
temporarily or permanently; the aim is not to
destroy demand but to reduce or shift it
Selecting Customers to Serve

16. Designing a Customer-Driven Marketing
Strategy
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

17. Designing a Customer-Driven Marketing
Strategy
Production
concept
Product
concept
Selling
concept
Marketing
concept
Societal
concept
Marketing Management Orientations

18. Designing a Customer-Driven Marketing
Strategy
Production concept is the idea that consumers
will favor products that are available or highly
affordable
Marketing Management Orientations

19. Designing a Customer-Driven Marketing
Strategy
Product concept is the idea that consumers will
favor products that offer the most quality,
performance, and features. Organization
should therefore devote its energy to making
continuous product improvements.
Marketing Management Orientations

20. Designing a Customer-Driven Marketing
Strategy
Selling concept is the idea that consumers
will not buy enough of the firm’s products
unless it undertakes a large scale selling
and promotion effort
Marketing Management Orientations

21. Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations
Marketing concept is the
idea that achieving
organizational goals
depends on knowing the
needs and wants of the
target markets and
delivering the desired
satisfactions better than
competitors do

22. Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations
Societal marketing concept
is the idea that a company
should make good marketing
decisions by considering
consumers’ wants, the
company’s requirements,
consumers’ long-term
interests, and society’s long-
run interests

23. Designing a Customer-Driven
Marketing Strategy

24. The marketing mix is the set of tools (four Ps)
the firm uses to implement its marketing
strategy.It includes product, price, promotion,
and place.
Integrated marketing program is a
comprehensive plan that communicates and
delivers the intended value to chosen
customers.
Preparing an Integrated Marketing
Plan and Program

25. Building Customer Relationships
• The overall process of building and maintaining
profitable customer relationships by delivering
superior customer value and satisfaction
Customer Relationship Management (CRM)

26. Building Customer Relationships
Customer Relationship Levels and Tools
Basic
Relationships
Full
Partnerships

27. Building Customer Relationships
• Relating with more carefully selected customers
uses selective relationship management to target
fewer, more profitable customers
• Relating more deeply and interactively by
incorporating more interactive two way
relationships through blogs, Websites, online
communities and social networks
The Changing Nature of Customer Relationships
Basic
Relationships

28. Partner relationship management involves
working closely with partners in other
company departments and outside the
company to jointly bring greater value to
customers
Building Customer Relationships
Full
Partnerships

29. Capturing Value from Customers

30. Capturing Value from Customers
• Customer lifetime value is the value of the
entire stream of purchases that the customer
would
make over a
lifetime of
patronage
Creating Customer Loyalty and Retention

31. The New Marketing Landscape
Digital age
Rapid
globalization
Ethics and
social
responsibility
Not-for-profit
marketing
Major Developments

32. So, What Is Marketing?
Pulling It All Together

33. Company and Marketing Strategy
Partnering to Build Customer
Relationships

34. Company and Marketing Strategy
• Companywide Strategic Planning: Defining
Marketing’s Role
• Designing the Business Portfolio
• Planning Marketing: Partnering to Build Customer
Relationships
• Marketing Strategy and the Marketing Mix
• Managing the Marketing Effort
• Measuring and Managing Return on Marketing
Investment
Topic Outline

35. Companywide Strategic Planning
Steps in Strategic Planning

36. Companywide Strategic Planning
• The mission statement is
the organization’s
purpose, what it wants to
accomplish in the larger
environment
• Market-oriented mission
statement defines the
business in terms of
satisfying basic customer
needs
Defining a Market-Oriented Mission
We help you organize the world’s
information and make it
universally accessible and useful.

37. Companywide Strategic Planning
Company Product-Oriented
Definition
Market-Oriented
Definition
Amazon.com We sell books, videos,
CDs, toys, consumer
electronics and other
products online
We make the Internet
buying experience fast,
easy, and enjoyable—
we’re the place where
you can find and
discover anything you
want to buy online
Disney We run theme parks We create fantasies—
a place where dreams
come true and America
still works the way it’s
supposed to
Nike We sell athletic shoes
and apparel
We bring inspiration
and innovation to every
athlete* in the world
(* if you have a body,
you are an athlete)

38. Companywide Strategic Planning
Business
objectives
• Build profitable
customer
relationships
• Invest in
research
• Improve profits
Marketing
objectives
• Increase
market share
• Create local
partnerships
• Increase
promotion
Setting Company Objectives and Goals

39. Companywide Strategic Planning
The business portfolio is the collection of
businesses and products that make up the
company
Portfolio analysis is a major activity in strategic
planning whereby management evaluates the
products and businesses that make up the
company
Designing the Business Portfolio

40. Companywide Strategic Planning
Strategic business unit (SBU) is a unit of the
company that has a separate mission and
objectives that can be planned separately
from other company businesses
• Company division
• Product line within a division
• Single product or brand
Analyzing the Current Business Portfolio

41. Companywide Strategic Planning
Identify key businesses (strategic
business units, or SBUs) that make up
the company
Assess the attractiveness of its various
SBUs
Decide how much support each SBU
deserves
Analyzing the Current Business Portfolio

42. Companywide Strategic Planning:

43. Companywide Strategic Planning
Developing Strategies for Growth and Downsizing Product/Market Expansion Grid Strategies
Market
penetration
Market
development
Product
development
Diversification

44. Companywide Strategic Planning
Developing Strategies for Growth and Downsizing
Product/market expansion grid strategies

45. Companywide Strategic Planning
Market penetration is a
growth strategy increasing
sales to current market
segments without changing
the product
Market development is a
growth strategy that
identifies and develops new
market segments for current
products
Developing Strategies
for Growth and Downsizing

46. Companywide Strategic Planning
Product development is a growth strategy
that offers new or modified products to
existing market segments
Diversification is a growth strategy through
starting up or acquiring businesses outside
the company’s current products and
markets
Developing Strategies
for Growth and Downsizing

47. Companywide Strategic Planning
Downsizing is the reduction of the business
portfolio by eliminating products or
business units that are not profitable or
that no longer fit the company’s overall
strategy
Developing Strategies
for Growth and Downsizing

48. Marketing Strategy and the Marketing Mix

49. Marketing Strategy and the Marketing Mix
Developing an Integrated Marketing Mix

50. Managing the Marketing Effort

51. Managing the Marketing Effort
Marketing Analysis – SWOT Analysis

52. Managing the Marketing Effort
Market Planning—Parts of a Marketing Plan
Executive
summary
Marketing
situation
Threats and
opportunities
Objective
and issues
Marketing
strategy
Action
programs
Budgets Controls

53. Measuring and Managing
Return on Marketing Investment
Return on Marketing Investment (Marketing ROI)
Return on marketing investment
(Marketing ROI) is the net return
from a marketing investment
divided by the costs of the
marketing investment. Marketing
ROI provides a measurement of
the profits generated by
investments in marketing
activities.

54. Analyzing the Marketing
Environment

55. Analyzing the Marketing Environment
• The Company’s Microenvironment
• The Company’s Macroenvironemnt
• Responding to the Marketing Environment
Topic Outline

56. The Marketing Environment
The marketing environment includes the actors
and forces outside marketing that affect
marketing management’s ability to build and
maintain successful relationships with
customers

57. The Marketing Environment
Microenvironment consists of the actors close
to the company that affect its ability to serve
its customers, the company, suppliers,
marketing intermediaries, customer markets,
competitors, and publics

58. The Company’s Microenvironment
Actors in the Microenvironment

59. The Company’s Microenvironment
• Top management
• Finance
• R&D
• Purchasing
• Operations
• Accounting
The Company

60. The Company’s Microenvironment
• Provide the resources to produce goods and
services
• Treated as partners to provide customer value
Suppliers

61. The Company’s Microenvironment
Help the company to
promote, sell and
distribute its
products to final
buyers
Marketing Intermediaries

62. The Company’s Microenvironment
Resellers
Physical
distribution
firms
Marketing
services
agencies
Financial
intermediaries
Types of Marketing Intermediaries

63. The Company’s Microenvironment
• Firms must gain strategic advantage by
positioning their offerings against
competitors’ offerings
Competitors

64. The Company’s Microenvironment
Publics
• Any group that has an actual or
potential interest in or impact on
an organization’s ability to
achieve its objectives
– Financial publics
– Media publics
– Government publics
– Citizen-action publics
– Local publics
– General public
– Internal publics

65. The Company’s Macroenvironment

66. The Company’s Macroenvironment
Demography is the study of human populations
in terms of size, density, location, age, gender,
race, occupation, and other statistics
• Demographic environment is important
because it involves people, and people make
up markets
• Demographic trends include age, family
structure, geographic population shifts,
educational characteristics, and population
diversity
Demographic Environment

67. The Company’s Macroenvironment
• Generation X includes people born between
1965 and 1976
– High parental divorce rates
– Cautious economic outlook
– Less materialistic
– Family comes first
– Lag behind on retirement savings
Demographic Environment

68. The Company’s Macroenvironment
• Millennials (gen Y or echo boomers) include
those born between 1977 and 2000
– Comfortable with technology
– Includes
• Tweens (ages 8–12)
• Teens (13–19)
• Young adults (20’s)
Demographic Environment

69. The Company’s Macroenvironment
Generational marketing is important in
segmenting people by lifestyle of life
state instead of age
Demographic Environment

70. The Company’s Macroenvironment
More people are:
• Divorcing or separating
• Choosing not to marry
• Choosing to marry later
• Marrying without intending to have
children
• Increased number of working women
• Stay-at-home dads
Demographic Environment

71. The Company’s Macroenvironment
Economic environment consists of factors that
affect consumer purchasing power and
spending patterns
• Industrial economies are richer markets
• Subsistence economies consume most of their
own agriculture and industrial output
Economic Environment

72. The Company’s Macroenvironment
• Changes in income
• Value marketing involves
ways to offer financially
cautious buyers greater
value—the right
combination of quality and
service at a fair price
Economic Environment

73. The Company’s Macroenvironment
• Ernst Engel—Engel’s Law
• As income rises:
– The percentage spent on food declines
– The percentage spent on housing remains
constant
– The percentage spent on savings increases
Economic Environment
Changes in Consumer Spending Patterns

74. The Company’s Macroenvironment
Natural environment involves the natural
resources that are needed as inputs by
marketers or that are affected by marketing
activities
• Trends
– Shortages of raw materials
– Increased pollution
– Increase government intervention
– Environmentally sustainable strategies
Natural Environment

75. The Company’s Macroenvironment
Technological Environment
• Most dramatic force
in changing the
marketplace
• Creates new products
and opportunities
• Safety of new
product always a
concern

76. The Company’s Macroenvironment
Political environment consists of laws,
government agencies, and pressure groups
that influence or limit various organizations
and individuals in a given society
Political Environment

77. The Company’s Macroenvironment
• Legislation regulating business
– Increased legislation
– Changing government agency
enforcement
• Increased emphasis on ethics
– Socially responsible behavior
– Cause-related marketing
Political Environment

78. The Company’s Macroenvironment
Cultural environment consists of institutions
and other forces that affect a society’s basic
values, perceptions, and behaviors
Cultural Environment

79. The Company’s Macroenvironment
Core beliefs and values are persistent and are
passed on from parents to children and are
reinforced by schools, churches, businesses,
and government
Secondary beliefs and values are more open to
change and include people’s views of
themselves, others, organization, society,
nature, and the universe
Cultural Environment
Persistence of Cultural Values

80. Responding to the Marketing
Environment
Uncontrollable
• React and
adapt to
forces in the
environment
Proactive
• Aggressive
actions to
affect forces
in the
environment
Reactive
• Watching and
reacting to
forces in the
environment
Views on Responding