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CHAPTER

CREATING
CUSTOMER
RELATIONSHIP
S AND VALUE
THROUGH
MARKETING

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WHAT IS MARKETING?

A Philosophy
An Attitude
A Perspective
A Management
Orientation

A Set of Activities,
including:
Products
Pricing
Promotion
Distribution

WHAT IS MARKETING?

American Marketing Association Definition


Marketing is the process of planning and
executing the conception, pricing, promotion,
and distribution of ideas, goods, and services
to create exchanges that satisfy individual and
organizational goals.

Marketing = Using Exchanges to Satisfy Needs

TheConceptofExchange
Theideathatpeoplegiveupsomethingto
receivesomethingtheywouldratherhave.
Bothbuyerandsellerarebetteroffafter
thetrade.

WHO DO I AIM AT?


Market All people with both the desire and ability

to buy a specific product

Target Market One or more subgroups I can satisfy

THE CONTROLLABLE MARKETING FORCES

TheFourPs
thearrow

Price
Price
Promotion
Promotion

Place
Place
Product
Product

THE UNCONTROLLABLE MARKETING


FORCES
Social
Social
Natural
Natural
Economic
Economic
External
External
Environmental
Environmental
Factors
Factors

Technologic
Technologic
Political
Politicaland
andLegal
Legal
Competitive
Competitive

Helps identify market opportunities

FIGURE 1-A Summary of factors that affect


an organizations marketing program

FIGURE 1-4 Marketings task: satisfying


consumer needs

HOW MARKETING BECAME


SO IMPORTANT
Evolution of the Market Orientation

Production Era
Sales Era
Marketing Concept Era
Societal Era

MARKETING MANAGEMENT
PHILISOPHIES
Orientation
Orientation

Key Ideas

Production
Production Focus on efficiency of internal operations
if we make it, they will buy it

Sales
Sales
Market
Market
Societal
Societal

Focus on aggressive sales techniques and


believe that high sales result in high profits
Focus on satisfying customer needs and wants
while meeting objectives - if they will buy it, we
will make it
Focus on satisfying customer needs and
wants while enhancing individual and
societal well-being. I.e.-mfg using recyclables

FIGURE 1-B Four different orientations in


the history of American business

Societal

THE BREADTH & DEPTH OF MARKETING


What Is Marketed?
Goods

Services

Ideas

Who Buys and Uses What Is Marketed?


Ultimate Consumers
Organizational Buyers

HOW DO CONSUMERS BENEFIT


Utilitythebenefitsorcustomervaluereceived
byusersoftheproduct

HOW TO DELIVER VALUE


Customer value-benefits received by targeted buyers
that include quality, price, convenience, on-time
delivery, and both before-sale and after-sale service.

Offerproductsthatperform
Giveconsumersmorethantheyexpect
Avoidunrealisticpricing
Givethebuyerfacts
Offerorganizationwidecommitmentinservice
andaftersalessupport

KEEPING THE CUSTOMER SATISFIED

Meet
Meet or
or exceed
exceed customers
customers expectations
expectations

Provide
Provide solutions
solutions to
to customers
customers problems
problems

Cultivate
Cultivate relationships,
relationships,

NOT
NOT one-time
one-time transactions
transactions

Concept Check

1. What is marketing?
A: Marketing is an organizational
function and a set of processes for
creating, communicating, and
delivering value to customers and for
managing customer relationships in
ways that benefit the organization and
its stakeholders.

Concept Check

1. An organization cant satisfy the


needs of all consumers, so it must
focus on one or more subgroups,
which are its targetmarkets
____________.

Concept Check

2. What are the four marketing mix


elements that make up the
organizations marketing program?
A: product, price, promotion, place

Concept Check

3. What are environmental forces?


A: Environmental forces are those that the
organizations marketing department
cant control. These include social,
economic, technological, competitive,
and regulatory forces.

Concept Check

1. What are the two key characteristics


of the marketing concept?
A: (1) strive to satisfy the needs of
consumers (2) while also trying to
achieve the organizations goals.

Concept Check

2. What is the difference between goods


and services?
A: Goods are physical objects whereas
services are complex intangible
items, such as legal advice, a college
education, or airline travel.

Exchange

Exchange
Exchange is
is the
the trade
trade of
of things
things of
of value
value
between
between buyer
buyer and
and seller
seller so
so that
that each
each is
is
better
better off
off after
after the
the trade.
trade.

Market

A
A market
market consists
consists of
of people
people with
with both
both the
the
desire
desire and
and ability
ability to
to buy
buy aa specific
specific
product.
product.

Customer Value

Customer
Customer value
value is
is the
the unique
unique
combination
combination of
of benefits
benefits received
received
by
by targeted
targeted buyers
buyers that
that includes
includes quality,
quality,
price,
price, convenience,
convenience, on-time
on-time delivery,
delivery, and
and
both
both before-sale
before-sale and
and after-sale
after-sale service.
service.

Marketing Concept

The
The marketing
marketing concept
concept is
is the
the idea
idea that
that
an
an organization
organization should
should (1)
(1) strive
strive to
to satisfy
satisfy
the
the needs
needs of
of consumers
consumers (2)
(2) while
while also
also
trying
trying to
to achieve
achieve the
the organizations
organizations goals.
goals.

Market Orientation

An
An organization
organization that
that has
has aa market
market
orientation
orientation focuses
focuses its
its efforts
efforts on
on
(1)
(1) continuously
continuously collecting
collecting information
information
about
about customers
customers needs,
needs, (2)
(2) sharing
sharing this
this
information
information across
across departments,
departments, and
and
(3)
(3) using
using itit to
to create
create customer
customer value.
value.

Societal Marketing Concept

The
The societal
societal marketing
marketing concept
concept is
is the
the
view
view that
that an
an organization
organization should
should satisfy
satisfy
the
the needs
needs of
of consumers
consumers in
in aa way
way that
that
provides
provides for
for societys
societys well-being.
well-being.

Organizational Buyers

Organizational
Organizational buyers
buyers are
are those
those
manufacturers,
manufacturers, wholesalers,
wholesalers, retailers,
retailers,
and
and government
government agencies
agencies that
that buy
buy goods
goods
and
and services
services for
for their
their own
own use
use or
or for
for
resale.
resale.

Utility

Utility
Utility is
is the
the benefits
benefits or
or customer
customer value
value
received
received by
by users
users of
of the
the product.
product.