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Principles of Marketing Chapter 2

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Principles of Marketing Chapter 2

  1. 1. Chapter 2 MARKETING AND MARKETING MANAGEMENT: CREATING CUSTOMER VALUE AND SATISFACTION
  2. 2. REVIEWING PREVIOUS CHAPTER • We learned from Chapter 1 that from its mother science, economics, marketing has emerged as a distinct action discipline enriched by borrowings from related disciplines such as management, accounting, political science and the behavioral sciences. • We also learned that history and stages of marketing thought are surveyed to the point to the growth and development of marketing. • To be successful in business, each company should deal with customers on a daily basis, not only be customer-driven, but be customer-obsessed. The best way to achieve this objective is to develop a sound marketing function within the organization.
  3. 3. CHAPTER OBJECTIVES At the end of the chapter, you should be able to: • Define what marketing is and discuss its core concepts. • Explain the relationships between customer value, satisfaction, and quality. • Define marketing management and understand how marketers manage demand and build profitable customer relationships. • Compare the five marketing management philosophies. • Analyze the major challenges facing marketers heading into the new “connected” millennium.
  4. 4. What Is Marketing? Simple Definition: Marketing is managing profitable customer relationships. Goals: 1.Attract new customers by promising superior value. 2.Keep and grow current customers by delivering satisfaction.
  5. 5. Marketing Defined • 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. OLD View of Marketing: Making a Sale – “Telling & Selling” New View of Marketing: Satisfying NEW View of Marketing: Satisfying Customer Needs
  6. 6. Core Marketing Concepts
  7. 7. Marketing Defined Process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others.
  8. 8. What are Consumers’ Needs, Wants, and Demands? NeedsNeeds - state of felt deprivation including physical, social, and individual needs i.e hunger WantsWants - form that a human need takes as shaped by culture and individual personality i.e. bread DemandsDemands - human wants backed by buying power i.e. money
  9. 9. ExperiencesExperiences PersonsPersons Products Anything that can be Offered to a Market to Satisfy a Need or Want Products Anything that can be Offered to a Market to Satisfy a Need or Want PlacesPlaces OrganizationsOrganizations IdeasIdeasActivitiesActivities What Will Satisfy Consumers’ Needs and Wants? Services Activity or Benefit Offered for Sale That is Essentially Intangible and Doesn’t Result in the Ownership of Anything Services Activity or Benefit Offered for Sale That is Essentially Intangible and Doesn’t Result in the Ownership of Anything
  10. 10. How Do Consumers Choose Among Products and Services? Total Quality Management Involves Improving the Quality of Products, Services, and Business Processes Product’s Perceived Performance in Delivering Value Relative to Buyer’s Expectations is Customer Satisfaction Value Gained From Owning a Product and Costs of Obtaining the Product is Customer Value
  11. 11. ExchangesExchanges TransactionsTransactions RelationshipsRelationships Building a Marketing Network by Adding: •Financial Benefits •Social Benefits •Structural Ties •Profitable Customers How Do Consumers Obtain Products and Services?
  12. 12. Modern Marketing System
  13. 13. Marketing Management Attracting new customers and retaining and building relationships with current customers Profitable Customer Relationships Finding and increasing demand, also changing or reducing demand such as in Demarketing Demand Management Involves managing demand, which involves managing customer relationshipsMarketing Management
  14. 14. Stage 1. Entrepreneurial MarketingStage 1. Entrepreneurial Marketing Stage 2. Formulated MarketingStage 2. Formulated Marketing Stage 3. Intrepreneurial MarketingStage 3. Intrepreneurial Marketing Marketing Management Practice
  15. 15. Production ConceptProduction Concept Product ConceptProduct Concept Selling ConceptSelling Concept Marketing ConceptMarketing Concept Societal Marketing ConceptSocietal Marketing Concept Marketing Management Philosophies
  16. 16. Difference between Marketing and Sales Concepts
  17. 17. Societal Marketing Concept
  18. 18. The New Marketing Landscape
  19. 19. Learn About & Track Customers With Databases Communicate With Customers in Groups Or One-on-One Create Products & Services Tailored to Meet Customer Needs Distribute Products More Efficiently & Effectively Connecting Technologies in Computers, Telecommunications, Information, & Transportation Help To: Technologies for Connecting
  20. 20. The Internet • The Internet has been hailed as the technology behind a New Economy. • New applications include: • “click-and-mortar” companies • “click-only” companies • Business-to-business e-commerce • Business-to-business transactions online are expected to reach $3.6 trillion in 2003. • By 2005, 500,000 companies will use the Internet to do business.
  21. 21. Connections With Customers • Most marketers are targeting fewer, potentially more profitable customers. • Asking: • What value does the customer bring to the organization? • Are they worth pursuing? • Connecting for a customer’s lifetime.
  22. 22. Direct Connections With Customers • Many companies use technologies to let them connect more directly with their customers. • Products available via telephone, mail-order catalogs, kiosks and e- commerce. • Some firms sell only via direct channels (i.e. Dell Computer, http://www.amazon.com/), others use a combination. • Direct marketing is redefining the buyer’s role in connecting with sellers. • Buyers are active participants in shaping the marketing offer and process; some buyers design their own products online such as at http://www.us.levis.com/.
  23. 23. Connections With Marketing’s Partners • Connecting Inside the Company • Every employee must be customer-focused • Teams coordinate efforts toward customers • Connecting With Outside Partners • Supply Chain Management • Strategic Alliances
  24. 24. Connections With the World Around Us Global Connections Value Connections Social Responsibility Connections Broadening Connections

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