1.
The Marketing Concept Evolving Perspectives

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What Is Marketing? <ul><li>Simple Definition: Marketing is managing profitable customer relationships. </li></ul><ul><li>Goals: </li></ul><ul><li>Attract new customers by promising superior value. </li></ul><ul><li>Keep and grow current customers by delivering satisfaction. </li></ul>

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Marketing Management Philosophies Production Concept Product Concept Selling Concept Marketing Concept Societal Marketing Concept Customer-Driven

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The Production Concept

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The Product Concept

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Marketing and Sales Concepts Contrasted

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Societal Marketing Concept

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This Is a Need <ul><li>Needs - state of felt deprivation including physical, social, and individual needs. </li></ul>

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Maslow’s Hierarchy of Needs

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This Is a Want <ul><li>Wants - form that a human need takes, as shaped by culture and individual personality. </li></ul>

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Need / Want Fulfillment <ul><li>Needs and Wants Fulfilled through a Marketing Offer : </li></ul><ul><ul><li>Some combination of products, services, information, or experiences offered to a market to satisfy a need or want. </li></ul></ul>

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What Satisfies Consumers’ Needs and Wants? Products Anything that can be Offered to a Market to Satisfy a Need or Want Persons Places Organizations Ideas Information Services Activity or Benefit Offered for Sale That is Essentially Intangible and Does Not Result in the Ownership of Anything

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Marketing Myopia <ul><li>Sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products. </li></ul><ul><li>They focus on the “wants” and lose sight of the “needs.” </li></ul>

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This Is Demand “ Demand” Wants Buying Power

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What is a Market? <ul><li>The set of actual and potential buyers of a product. </li></ul><ul><li>These people share a need or want that can be satisfied through exchange relationships. </li></ul>

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Segmentation and Target Marketing #1 #2 Market Segmentation: Divide the market into segments of customers Target Marketing: Select the segment to cultivate

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Customer Satisfaction <ul><li>Dependent on the product’s perceived performance relative to a buyer’s expectations. </li></ul>

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Value and Satisfaction If performance is lower than expectations, satisfaction is low. If performance is higher than expectations, satisfaction is high. Expectation Performance 8 10 Expectation Performance 10 8

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Customer Perceived Value <ul><li>Customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers. </li></ul>

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Customer Relationship Levels Basic Relationship Full Partnership Continuum

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Loyalty and Retention Focus on Profitable Customers Financial Benefits Social Benefits Structural Ties

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Customer Relationship Management <ul><li>The process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. </li></ul>

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<ul><li>Customer Lifetime Value </li></ul><ul><ul><li>The entire stream of purchases that the customer would make over a lifetime of patronage. </li></ul></ul><ul><li>Share of Customer </li></ul><ul><ul><li>The share a company gets of the customers purchasing in their product categories. </li></ul></ul>Customer Loyalty & Retention