Marketing: Managing Profitable Customer Relationships

1. Marketing: Managing
Profitable Customer
Relationships
Chapter 1

2. Objectives
Be able to define marketing and
discuss its core concepts.
Be able to define marketing
management and compare the
five marketing management
orientations.
1-2

3. Objectives
Understand customer
relationship management
and strategies.
Realize the major challenges
facing marketers in the new
“connected” millennium.
1-3

4. What is Marketing?
Marketing is managing profitable
customer relationships
 Attracting new customers
 Retaining and growing current
customers
“Marketing” is NOT synonymous
1-4

5. What is Marketing?
Kotler’s social definition:
“Marketing is a social and
managerial process by which
individuals and groups obtain
what they need and want through
creating and exchanging products
and value with others.” 1-5

6. What Can Be
Marketed?
Goods
Services
Places
Ideas
Events
Persons
Properties
Organizations
What is being
Information
marketed in this ad?
Experiences
1-6

7. Figure 1-1:
Core Marketing Concepts
1-7

8. Figure 1-2:
Elements of a
Modern Marketing System
1-8

9. Marketing Management
Marketing management is “the
art and science of choosing
target markets and building
profitable relationships with
them.”
 Creating, delivering and
communicating superior 1-9

10. Marketing Management
Customer Management:
 Marketers select customers that
can be served well and profitably.
Demand Management:
 Marketers must deal with different
demand states, ranging from no
demand to too much demand. 1 - 10

11. Marketing Management
Demarketing:
Commuter
Connections
promotes the use
of mass transit
and carpooling as
an alternative to
driving alone.
Commuter
Connections
1 - 11

12. Marketing Management
Production Management Product
Concept Orientations Concept
Selling Marketing
Concept Concept
Societal
Marketing
Concept
1 - 12

13. Figure 1-3:
The Selling and Marketing
Concepts Contrasted
1 - 13

14. Figure 1-4:
Considerations Underlying the
Societal Marketing Concept
1 - 14

15. Figure 1-5:
Relationship Between Customer
Satisfaction and Loyalty
1 - 15

16. CRM
Customer relationship
management (also called CRM)
“the overall process of building
is and maintaining profitable
defined as:
customer relationships by
delivering superior customer
value and satisfaction.”
1 - 16

17. CRM
It costs 5 to 10 times MORE to
attract a new customer than it
does to keep a current
customer satisfied.
Marketers must be
concerned with the
lifetime value of the
1 - 17

18. BusinessNow
SatMetrix Video Clip
View what the
experts have to
say about
customer loyalty
and the bottom
Click the picture above to play video line.
1 - 18

19. CRM
Key Concepts
Customer value and
satisfaction
 Perceptions are key
Attracting,  Created by meeting/
exceeding expectations
retaining and
Loyalty and retention
growing  Many benefits of loyalty
customers  Increases as satisfaction
Building levels increase
 Delighting consumers
relationships and should be the goal
customer equity Growing customer share
1 - 19

20. CRM
Key Concepts
Attracting, Customer equity
retaining and  Total combined
growing customer lifetime
customers values of all
Building customers
relationships and  Measures firm’s
customer equity performance, but in
a manner that looks
to the future 1 - 20

21. CRM
Key Concepts
Customer relationship
Attracting, levels and tools
retaining and  Target market typically
growing dictates type of
customers relationship
 Basic relationships
Building  Full relationships
relationships and  Customer loyalty and
customer equity retention programs
 Adding financial
benefits
 Adding social benefits
1 - 21

22. Marketing Challenges
Technological advances, rapid
globalization, and continuing
social and economic shifts are
causing marketplace changes.
Major marketing developments
can be grouped under the theme
of Connecting.
1 - 22

23. Figure 1-6:
Today’s Marketing Connections
1 - 23

24. Marketing Challenges
Connecting
Advances in computers,
telecommunications,
video-conferencing, etc.
Via technology are major forces
 Databases allow for
With customers customization of
products, messages
With marketing and analysis of needs
partners The Internet
 Facilitates anytime,
With the world anywhere connections
 Facilitates CRM 1 - 24

25. Marketing Challenges
Connecting
Selective relationship
Via technology management is key
With customers  Customer profitability
analysis separates
With marketing winners from losers
partners Growing “share of
customer”
With the world  Cross-selling and up-
selling are helpful
Direct sales to
buyers are growing 1 - 25

26. Marketing Challenges
Connecting
Partner relationship
Via technology management
With customers involves:
With marketing  Connecting inside
the company
partners
 Connecting with
With the world outside partners
 Supply chain
management
 Strategic alliances
1 - 26

27. Marketing Challenges
Connecting
Globalization
Via technology  Competition
With customers  New opportunities
With marketing Greater concern for
environmental and
partners social responsibility
With the world Increased marketing
by nonprofit and
public-sector entities
 Social marketing 1 - 27