Marketing: Managing

Profitable Customer
Relationships

Chapter 1
 What is Marketing?
Marketing Defined:
“Marketing is a social and managerial
process by which individuals and groups
obtain what they need and want through
creating and exchanging value with
others”
Marketing is about managing profitable
customer relationships
 Attracting new customers
 Retaining and growing current customers

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Goal 1: Define marketing and the marketing process.
 The Marketing Process
A Five-Step Process
1. Understand the marketplace and
customer needs and wants
2. Design a customer-driven
marketing strategy
3. Construct a marketing program
that delivers superior value
4. Build profitable relationships and
create customer delight
5. Capture value from customers to
create profits and customer
quality
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Goal 1: Define marketing and the marketing process.
 Understanding the
Marketplace
Core Concepts Need
 State of felt deprivation
Needs, wants, and demands  Example: Need food
Marketing offers: including Wants
products, services and  The form of needs as shaped
experiences by culture and the individual
Value and satisfaction  Example: Want a Big Mac
Exchange, transactions and Demands
relationships  Wants which are backed by
Markets buying power

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Goal 2: Identify the five core marketplace concepts.
 Understanding the
Marketplace
Core Concepts Marketing offer
Needs, wants, and demands
Marketing offers: including
products, services and
experiences
Value and satisfaction
Exchange, transactions and
relationships
Markets
 Combination of
products, services,
information or
experiences that
satisfy a need or
want
 Offer may include
services, activities,
people, places,
information or
ideas

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Goal 2: Identify the five core marketplace concepts.
 Understanding the
Marketplace
Core Concepts Value
 Customers form
Needs, wants, and demands expectations regarding
Marketing offers: including value
products, services and
experiences  Marketers must deliver
Value and satisfaction value to consumers
Exchange, transactions and Satisfaction
relationships  A satisfied customer
Markets will buy again and tell
others about their good
experience

1-6
Goal 2: Identify the five core marketplace concepts.
 Understanding the
Marketplace
Core Concepts Exchange
Needs, wants, and demands
Marketing offers: including
products, services and
experiences
Value and satisfaction
Exchange, transactions and
relationships
Markets
 The act of obtaining a
desired object from
someone by offering
something in return
 One exchange is not the
goal, relationships with
several exchanges are
the goal
 Relationships are built
through delivering value
and satisfaction

1-7
Goal 2: Identify the five core marketplace concepts.
 Understanding the
Marketplace
Core Concepts Market
 Set of actual and
Needs, wants, and demands
potential buyers of a
Marketing offers: including
products, services and product
experiences  Marketers seek
Value and satisfaction buyers that are
Exchange, transactions and profitable
relationships
Markets

1-8
Goal 2: Identify the five core marketplace concepts.
 Marketing Management
Marketing management is the
art and science of choosing
target markets and building
profitable relationships with
them.
 This definition must include
answers to two questions:
• What customers will we serve?
• How can we serve these customers
best?
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Goal 3: Identify elements of a customer-driven strategy.
 Selecting Customers
and Creating Value
Customer Management
 What customers will we serve?
 Marketers select customers that can
be served profitably
Value Proposition
 How can we serve these customers
best?
 Includes the set of benefits or values a
company promises to deliver to
consumers to satisfy their needs
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Goal 3: Identify elements of a customer-driven strategy.
 Marketing Orientations
Marketing Management

Production Selling concept

concept Marketing
Product concept concept
• Societal marketing concept

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Goal 3: Identify elements of a customer-driven strategy.
 The Marketing Plan
Transforms the marketing
strategy into action
Includes the marketing mix and
the 4P’s of marketing
 Product
 Price
 Place
 Promotion
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Goal 3: Identify elements of a customer-driven strategy.
Value and Satisfaction
Perceived Value
 The customer’s evaluation of the difference
between benefits and costs.
 Customers often do not judge values and
costs accurately or objectively.
Customer Satisfaction
 Product’s perceived performance relative
to customer’s expectations.

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Goal 4: Discuss CRM and capturing value.
 Marketing Landscape
Challenges Growth of the
Internet
Digital age Advances in
Globalization telecommunications
, information,
Ethics and social transportation
responsibility  Customer research and
tracking
Not-for-profit  Product development
 Distribution
marketing  New advertising tools
Marketing  24/7 marketing through
the Internet
relationships 1 - 14
Goal 5: Discuss trends and forces.
 Marketing Landscape
Challenges Geographical and
cultural distances
Digital age have shrunk
Globalization  Greater market
coverage
Ethics and social  More options for
responsibility purchasing and
manufacturing
Not-for-profit  Increased competition
marketing from foreign
competitors
Marketing
relationships 1 - 15
Goal 5: Discuss trends and forces.
 Marketing Landscape
Challenges Marketers need to
Digital age take great
responsibility for
Globalization
the impact of
Ethics and social
their actions
responsibility  Caring capitalism is
Not-for-profit a way to
marketing differentiate your
company
Marketing
relationships 1 - 16
Goal 5: Discuss trends and forces.
 Marketing Landscape
Challenges Many organizations
are realizing the
Digital age importance of
Globalization strategic marketing
 Performing arts
Ethics and social  Government agencies
responsibility  Colleges
 Hospitals
Not-for-profit  Churches
marketing
Marketing
relationships 1 - 17
Goal 5: Discuss trends and forces.
 Marketing Landscape
Challenges Profits through
Digital age managing long-
term customer
Globalization
equity
Ethics and social  Improve customer
responsibility knowledge
 Target profitable
Not-for-profit
customers
marketing  Keep profitable
Marketing customers
relationships 1 - 18
Goal 5: Discuss trends and forces.
 What is Marketing?

The process of building

profitable customer
relationships by creating value
for customers and capturing
value in return

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