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Marketing: Managing

Profitable Customer
Relationships
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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Objectives

Understand customer
relationship management
and strategies.
Provide exposure to marketing
mix variables and some
marketing functions
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Core Marketing Concepts

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CORE MARKETING
CONCEPTS
NEED WANTS
A state of felt deprivation The form that a human
Eg. Physical needs – need takes as shaped
clothing, food, safety by culture and
Social needs – belonging, individual personality
affection OR a desire directed to
Individual needs – specific objects that
knowledge, self expression might satisfy a need
Maslows Hierarchy of Eg. Hilfiger shirt, KFC,
needs
Massage Service,
Oxford University
Education etc.

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CORE MARKETING
CONCEPTS
DEMAND
Human wants backed by ability
and willingness to pay (buying
power)
I.e ( I have the money and I
am willing to spend it on this
item)
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CORE MARKETING
CONCEPTS
MARKETING MARKETING
OFFERS OFFERS
Some combination More broadly it
of products, include:
services, Places, persons,
information or organisations, ideas
experiences and information
offered to a market Also referred to as
to satisfy a need or non traditional
want marketing

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What Can
Be
Marketed?

Goods
Services
Places
Ideas
Events
Persons
Properties
Organizations
Information
Experiences

What is being
marketed in this ad?
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CORE MARKETING
CONCEPTS
PRODUCTS
Anything that can be offered to a
market for attention, acquisition, use,
or consumption and that might satisfy
a need or want
SERVICES
Activities or benefits offered for sale
that are essentially intangible and do
not result in the ownership of
anything. Eg. Air travel, hotel, theatre
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CORE MARKETING
CONCEPTS
CUSTOMER VALUE CUSTOMER
The difference between SATISFACTION
the benefit (utility) the
customer gains from The extent to which
owning and using a a products
product and the cost of perceived
obtaining the product performance
matches a buyers
expectation
Satisfied/Dis-
satisfied/Delighted

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CORE MARKETING
CONCEPTS
EXCHANGE RELATIONSHIP
The act of obtaining Actions taken to
a desired object from build and maintain
someone by offering desirable exchange
something in return relationships with
TRANSACTION valued customers
involving a
A trade of values
product, service,
between two parties
idea or other object
Marketing’s unit of
measurement Marketing Networks

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CORE MARKETING
CONCEPTS
MARKETS
A set of actual and potential
buyers who share a particular
need or want that can be
satisfied through an
exchange or relationship
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What is Marketing?

Marketing is managing profitable


customer relationships
 Attracting new customers
 Retaining and growing current customers
“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 creating and
exchanging products and value with
others.”
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Marketing Management

Marketing management is “the art


and science of choosing target
markets and building profitable
relationships with them.”
 Creating, delivering and communicating
superior
customer value is key.
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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
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Marketing Management

Production Management Product


Concept Orientations Concept

Selling Marketing
Concept Concept
Societal
Marketing
Concept

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MARKETING ORIENTATIONS
PRODUCTION PRODUCT
Consumers will
Consumers will favour products that
favour products that offer the most quality,
are widely available performance and
and affordable innovative features
Management should Management should
focus on improving focus on making
superior products and
production and
continuous
distribution efficiency improvements

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MARKETING ORIENTATIONS
SELLING MARKETING
Consumers will Achieving
not buy enough organisational goals
depends on
of an organi- determining the
sation’s needs and wants of
products unless target markets and
the organisation delivering the
aggressively desired satisfactions
promotes/sells more efficiently than
these products competitors do

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MARKETING ORIENTATIONS
SOCIETAL MARKETING CONCEPT
Achieving organisational goals
depends on determining the needs
and wants of target markets and
delivering the desired satisfactions
more efficiently than competitors in a
way that maintains or improves the
customer’s and society’s well-being

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Considerations Underlying the
Societal Marketing Concept

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CRM

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

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CRM

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

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CRM

Key Concepts
Building Customer equity
relationships  Total combined
customer lifetime
and customer values of all customers
equity  Measures firm’s
performance, but in a
manner that looks to
the future

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CRM

Key Concepts
Customer relationship
Building levels and tools
relationships  Customer loyalty and
and customer retention programs
equity  Adding
benefits
financial

 Adding social benefits


 Adding structural ties

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MARKETING MIX
A set of controllable tactical marketing
tools – product, price, place, and promotion
– that the firm blends to produce the
response it wants in the target market
This is also referred to as the 4Ps
Or from the customers standpoint, the
4Cs
Customer solution, cost, convenience,
communication

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MARKETING MIX
PRODUCT/CUSTOMER SOLUTION –
the goods-and-services combination
the company offers to the target
market
Variety Sizes
Quality Design
Features Brand name
Packaging Services
Returns Warranties

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MARKETING MIX
PRICE/COST – the amount of money
the customers have to pay to obtain
the product
List price
Discounts
Allowances
Payment period
Credit terms

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MARKETING MIX
PLACE/CONVENIENCE – includes
company activities to make the make
the product available to target
customers
Channels
Coverage
Assortments
Locations
Logistics – warehouse, inventory,
transportation
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MARKETING MIX
PROMOTION/COMMUNICATION –
activities that communicate the
merits of the product and persuade
target customers to buy it
Advertising
Personal selling
Sales promotion
Public relations
Direct marketing
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MARKETING FUNCTIONS
Marketing Planning Advertising and sales
Marketing research promotion
Marketing information/ Sales and distribution
intelligence analysis Product/Service
Environmental development
Analysis Marketing HR
Marketing development
administration and
Procurement
support
Pricing Negotiations & Stake-
holder relationship
management

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WHAT’S NEXT!

TUTORIAL: Review concepts


– prepare tutorial week 1
questions, case application
LECTURE: MARKETING
ENVIRONMENT

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