An Overview of Strategic Marketing: Part One Marketing Strategy and Customer Relationships

Part One
Marketing
Strategy and
Customer
Relationships
1
An Overview of Strategic Marketing
Objectives
1. To be able to define marketing as

focused on customers
2. To identify some important marketing
terms, including target market,
marketing mix, marketing exchanges,
and marketing environment
3. To become aware of the marketing
concept and marketing orientation
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Objectives (cont’d)
4. To understand the importance of

building customer relationships
5. To learn about the process of
marketing management
6. To recognize the role of marketing in
our society

Chapter Outline
• Defining Marketing
• Understanding the Marketing Concept
• Managing Customer Relationships
• Value-Driven Marketing
• Marketing Management
• The Importance of Marketing in Our
Global Economy

Marketing
• Importance of marketing
– Financial success depends on marketing
ability
– Finance, operations, accounting, design,
etc. will not really matter if there is not
sufficient demand for products and
services

Defining Marketing
• Marketing
– The process of creating, distributing,
promoting, and pricing goods, services,
and ideas to facilitate satisfying exchange
relationships with customers in a dynamic
environment
– Meeting needs profitably
– Should result in a customer who is ready
to buy

Defining Marketing
• Customer needs
– Ebay
– IKEA
– Google

Defining Marketing
• Marketing decisions
– What features to design into a product
– What prices to offer customers
– Where to sell products
– How much to spend on advertising
– Wording on packaging
– Design of packaging

Defining Marketing
• A person can obtain a product in one of

four ways:
– Self produce
– Steal
– Beg
– purchase

Defining Marketing
• Customers
– The purchasers of organizations’ products;
the focal point of all marketing activities

Components of Strategic Marketing
FIGURE 1.1
Marketing Focuses on Customers
• Target Market
– A specific group of customers on whom an
organization focuses its marketing efforts
• Large or small customer groups
• Single or multiple product markets
• Single or multiple products
• Local to global markets

Marketing Deals with Products, Distribution,
Promotion, and Price
• The Marketing Mix

– Four marketing activities—product,
distribution, promotion, and pricing—that a
firm can control to meet the needs of
customers within its target market
Product
Distribution Target
Promotion Market
Pricing

Marketing Mix Variables
Goods, services, or ideas that satisfy

Product customer needs
The ready, convenient, and timely

Distribution availability of products
Activities that inform customers about

Promotion the organization and its products
Decisions and actions that establish

Pricing pricing objectives and policies and set
product prices

Marketing Builds Satisfying Exchange
Relationships
• Exchange
– The provision or transfer of goods,
services, or ideas in return for something
of value
FIGURE 1.2
Relationships (cont’d)
• Exchange Conditions
– Two or more participants have something of value
that the other party desires.
– Exchange provides mutual benefit/satisfaction.
– Each party has confidence in the exchange value
of the other party’s offering.
– Each party must meet the expectations of the
exchange to become trusted by the other parties.

Relationships (cont’d)
• Exchange forms
– Business firm wants purchases
– Political candidate wants votes
– Church wants active members
– Social-action group wants passionate adoption of
some cause

Marketing Occurs in a Dynamic Environment
• Marketing Concept
– A philosophy that an organization should
try to satisfy customers’ needs through a
coordinated set of activities that also
allows the organization to achieve its goals
– Against the “selling concept”, which
focuses on the needs of the seller

Marketing Occurs in a Dynamic Environment
• Marketing Concept
– Customer satisfaction
• Analysis of customers’ current and long-term
needs
• Analysis of competitors’ capabilities
• Integration of firm’s resources

Evolution of the Marketing Concept
Product Late 19th century: efficient production of goods
Orientation allowed firms to meet strong customer demand.
Mid-1920s–early 1950s: weakened demand

Sales required that products would have to be “sold.”
Orientation (personal selling, advertising, and distribution
was the focus)
Early 1950s–2000s: adopting a customer focus

Marketing
means a commitment to researching and
Orientation responding to customer needs.
FIGURE 1.3
Implementing the Marketing Concept
• Becoming marketing oriented requires

– Establishing an information system to discover
customers’ needs and using the information to
create satisfying products.
– Coordinating all marketing activities by
restructuring the organization.
– Obtaining the support of all managerial
and staff levels in the organization.

Managing Customer Relationships
• Relationship Marketing
– Establishing long-term, mutually satisfying
buyer-seller relationships allowing for
cooperation and mutual dependency
• Increased value of customer (loyalty) over time
results in increased profitability.

Managing Customer Relationships (cont’d)
• Customer Relationship Management

(CRM)
– Using information about customers to
create marketing strategies that develop
and sustain desirable customer
relationships
• Identifying buying-behavior
patterns of customers
• Using behavioral
information to focus on
the most profitable
customers
Value-Driven Marketing
• Value
– A customer’s subjective assessment of benefits
relative to the costs in determining the worth of a
product
• Customer value = customer benefits – customer costs
– Customer benefits
• Anything desired by the customer that is received in an
exchange
– Customer costs
• Anything a customer gives up in an exchange for
benefits
– Monetary price of the benefit
– Search costs (time and effort) to locate the product
– Risks associated with the exchange

Marketing Management
• Marketing Management
– The process of planning, organizing,
implementing, and controlling marketing activities
to facilitate exchanges effectively and efficiently
– Effectiveness
• The degree to which an exchange
helps an organization achieve its
objectives
– Efficiency
• The process of minimizing the
resources an organization must
spend to achieve a specific level
of desired exchanges

Marketing Management (cont’d)
• Planning
– Assessing opportunities and resources
– Determining marketing objectives
– Developing a marketing strategy and plans for
implementation and control
• How, when and by whom are marketing activities
performed?
• Organizing
– Developing the internal structure of the marketing
unit
• Functions, products, regions, customer types

Marketing Management (cont’d)
• Implementation
– Coordinating marketing activities
– Motivating marketing personnel
– Developing effective internal communications
within the unit
• Control
– Establishing performance standards
– Comparing actual performance to established
standards
– Reducing the difference between desired and
actual performance
Effective Marketing Control Process
• Provides for quick detection

of differences in planned
and actual performance
• Accurately monitors
activities and is flexible
enough to accommodate changes
• Incurs low process costs relative to the
costs of a “no-control” situation
• Is understandable by both managers
and subordinates.
The Importance of Marketing in Our Global
Economy
• Marketing costs consume a sizable

portion of buyers’ dollars
• Marketing is used in nonprofit
organizations
• Marketing is important to business and
the economy
• Marketing fuels our
global economy

The Importance of Marketing in Our Global
Economy (cont’d)
• Marketing knowledge enhances

consumer awareness
• Marketing connects people through
technology
• Socially responsible marketing can
promote the welfare of customers and
society
• Marketing offers many exciting career
prospects
After reviewing this chapter you should:
• Be able to define marketing as focused

on customers.
• Know the meaning of important
marketing terms, including target
market, marketing mix, marketing
exchanges, and marketing environment.
• Be more aware of the marketing
concept and marketing orientation.

After reviewing this chapter you should:
• Understand the importance of building

customer relationships.
• Have learned about the process of
marketing management.
• Recognize the important role of
marketing in our society.

An Overview of Strategic Marketing: Part One Marketing Strategy and Customer Relationships

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Part One

1. To be able to define marketing as

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4. To understand the importance of

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• A person can obtain a product in one of

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• The Marketing Mix

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Goods, services, or ideas that satisfy

The ready, convenient, and timely

Activities that inform customers about

Decisions and actions that establish

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Mid-1920s–early 1950s: weakened demand

Early 1950s–2000s: adopting a customer focus

• Becoming marketing oriented requires

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• Customer Relationship Management

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• Provides for quick detection

• Marketing costs consume a sizable

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• Marketing knowledge enhances

• Be able to define marketing as focused

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• Understand the importance of building

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