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Marketing: Managing
Profitable Customer
Relationships
Chapter 1
Objectives
Be able to define marketing and
discuss its core concepts.
Be able to define marketing
management and compare the
five marketing management
orientations.
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2. 7/13/2008
Objectives
Understand customer
relationship management
and strategies.
Realize the major challenges
facing marketers in the new
“connected” millennium.
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What is Marketing?
Marketing is managing profitable
customer relationships
Attracting new customers
Retaining and growing current
customers
t
“Marketing” is NOT synonymous
with “sales” or “advertising”
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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
h t th d d t th h
creating and exchanging products
and value with others.”
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What Can Be
Marketed?
Goods
S i
Services
Places
Ideas
Events
Persons
Properties
Organizations
Information
Experiences
What is being
marketed in this ad?
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Figure 1-1:
Core Marketing Concepts
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Discussion Question
Resellers are a primary
market for Nike’s
products.
Describe the exchange
process between Nike
and resellers.
Think beyond the obvious.
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Figure 1-2:
Elements of a
Modern Marketing System
ode a e g ys e
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Marketing Management
M k ti management i “the
Marketing t is “th
art and science of choosing
target markets and building
profitable relationships with
them.
them ”
Creating, delivering and
communicating superior
custome
customer value is key.
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Marketing Management
Customer M
C t Management:
t
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.
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Marketing Management
Demarketing:
Commuter
Connections
promotes the use
of mass transit
and carpooling as
an alternative to
driving alone.
alone
Commuter
Connections
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Marketing Management
Production Management Product
Concept Orientations Concept
Selling Marketing
Concept
C t Concept
C t
Societal
Marketing
Concept
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Figure 1-3:
The Selling and Marketing
Concepts Contrasted
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Figure 1-4:
Considerations Underlying the
Societal Marketing Concept
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Figure 1-5:
Relationship Between Customer
Satisfaction and Loyalty
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CRM
Customer relationship
C t l ti hi
management (also called CRM)
is defined as:
“the overall process of building
and maintaining profitable
d i t i i fit bl
customer relationships by
delivering superior customer
value and satisfaction.”
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CRM
It costs 5 to 10 times MORE t
t t ti to
attract a new customer than it
does to keep a current
customer satisfied.
Marketers must be
concerned with the
lifetime value of the
customer.
customer.
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CRM
Customer value and
Key Concepts satisfaction
ti f ti
Perceptions are key
Attracting, Created by meeting/
exceeding expectations
retaining and Loyalty and retention
growing Many benefits of loyalty
customers Increases as satisfaction
levels increase
Building Delighting consumers
relationships and should be the goal
customer equity Growing customer share
Cross-
Cross-selling
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CRM
Key Concepts C t it
Customer equity
Total combined
Attracting, customer lifetime
retaining and values of all
growing customers
custo e s
customers Measures firm’s
firm s
Building performance, but in
relationships and a manner that looks
customer equity to the future
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CRM
Customer relationship
Key Concepts levels and tools
Target market typically
Attracting, dictates type of
retaining and relationship
Basic relationships
growing Full relationships
customers Customer loyalty and
Building retention programs
relationships and Adding financial
benefits
customer equity Adding social benefits
Adding structural ties
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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.
Connecting.
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Figure 1-6:
Today’s Marketing Connections
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Marketing Challenges
Connecting Advances in computers,
telecommunications,
video-
video-conferencing, etc.
are major forces
Via technology Databases allow for
customization of
With customers products, messages
and analysis of needs
With marketing
The Internet
partners Facilitates anytime,
With the world anywhere connections
Facilitates CRM
Creates marketspaces
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Marketing Challenges
Connecting Selective relationship
management is key
Customer profitability
Via technology analysis separates
winners from losers
With customers Growing “share of
With marketing customer”
Cross-
Cross-selling and up-
up-
partners selling are helpful
With the world Direct sales to
buyers are growing
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Marketing Challenges
Connecting P t l ti hi
Partner relationship
management
involves:
Via technology Connecting inside
With customers the company
With marketing Connecting with
outside partners
partners Supply chain
With the world management
Strategic alliances
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Marketing Challenges
Connecting Globalization
Competition
New opportunities
Via technology Greater concern for
With customers environmental and
social responsibility
With marketing
Increased marketing
partners by nonprofit and
With the world public-
public-sector entities
Social marketing
campaigns
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Connecting with
Values . . .
The Body Shop
e ody S op
Visit the “Our Values” and “About Us” sections of
The Body Shop’s web site.
How might the values espoused by the company
influence the manner in which the Body Shop . . .
• Chooses their strategic partners?
• Advertises fragrances to consumers?
• Develops new products?
• How might these decisions in turn
The Body Shop
impact “the bottom line”?
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15. 7/13/2008
Amazon
c
Strong sales, no Provides great
profits selection, good
Customer-
Customer-driven value, discovery
to its core as well as
Each customer s
customer’s convenience
experience is A true online
unique community
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