Marketing: Managing Profitable Customer Relationships Chapter 1

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 Keywords: -creating & exchanging value with others. -not only telling and selling but the sense of satisfying customer needs.

 Marketing is about managing profitable customer relationships

Attracting new customers Retaining and growing current customers

Marketing is set of activities and processes that include selling, advertising, market research, internet/e-commerce, public relations and etc.

Questions  Identify major marketing campaigns. What brands are being launched recently? What are the advertisement saying?  Be aware of new trends and technologies. Keep a lookout for marketing wars. Give example.

Need, Wants and Demands Marketing offers Value and Satisfaction Exchange, transaction and relationship Markets

Core Marketing Concepts Need

State of felt deprivation Not created by marketer-it is basic part of human life Example: Need food, cloth, safety

Wants
The form of needs as shaped by culture and the individual Example: Want a Big Mac, Pagoda T-shirt, ING insurance

Demands
Wants which are backed by buying power Given their wants & resources, people demand product with benefits that add up to the most value and satisfaction Example: Burger King vs Ramly Burger, MNG vs Petaling Street cloth, ING insurance vs Etiqa.

Marketing offers
Combination of products, services, information or experiences that satisfy a need or want Keywords: Offer may include services, organization (build brand name), people/person (celebrities, politician), places (Australia adventures) , information or ideas (anti-smoking, drugs prevention)

Value and Satisfaction

Marketers must deliver value to consumers Customers form expectations about the value of various marketing offers A satisfied customer will buy again and tell others about their good experience, dissatisfied customer will tell about she/he experiences to 11 person. dissatisfied, satisfied and delighted customer.

Exchange, transaction and relationship

Exchange is the act of obtaining a desired object from someone by offering something in return Transactions consists of a trade of values between two parties Relationships are built through delivering value and satisfaction Keywords: relationships with exchanges are the goal and how you delivering value and satisfaction.

Market
Set of actual and potential buyers of a product Marketers seek buyers that are profitable, the marketers try to fulfill customers needs and wants.

Marketing Management

Marketing management is the art and science of choosing target markets and building profitable relationships with them.
Keywords: What customers will we serve? -based on segmentation and target marketing How can we serve these customers best? -how you want to differentiate or position your product in the marketplace.

Marketing Orientations Production concept

Consumer: will favor products that available and highly affordable. Management: focus on improving production/distribution efficiency. This concept will occur if product exceeds the supply: management should look for ways to increase production. Example: mineral water, national cars

Product concept
Consumer: will favor products that offer the most quality, performance and innovative features. Marketing strategies: making continuous product improvements. Ex: shampoo, mousetraps, cameras, handphones

Selling concept
Consumer: will not buy enough of firms product unless undertakes large-scale selling or more promotion effort Practiced with unsought goods-insurance, blood donation-buyers do not normally think of buying/using, Marketing strategies:if the company faces overcapacity, aim to sell what they make rather than the market wants.
From factory sales volume existing product selling/promoting profits through

Marketing concept
Company goal: on knowing the needs/wants of target markets and delivering the desired satisfaction better than competitors do.
From market customer needs customer satisfaction integrated marketing profits through

The Societal-Marketing concept

See the conflicts between consumer short run wants and consumer long run welfare. Ex: McDonalds-the company should balance the 3 consideration in marketing strategies: company profit, consumer wants and society interests. Stress the honesty, integrity and putting the people (consumer first) before gain the profit

The Marketing Mix 8Ps of marketing mix Set of controllable tactical marketing tools Marketing tools that the firm uses to pursue its marketing objectives in the target market Product -goods and services (combination) the company offers to the target markets -product variation, quality, design, features, brand name

Price -the amount of money customers have to pay to obtain the product -list price, discount, allowances Place -company activities that make the product available to target consumers -channels, locations, coverage Promotion -activities that communicate the merits of the product and persuade target customers to buy it

People
-consumers must be educated in order for their expectations of the product/service to be managed and employees must be motivated and well trained in order to ensure that high standards of service are maintained

Process (Proximity)
-as the success of the service is dependent on the total customer experience a well designed

Physical Aspect
-appearance of the delivery location and the elements provided to make the service more tangible can enhance the experience. Great atmosphere, constant reminders of the firms corporate identity help to build customer awareness and loyalty

Protection -patent (patent holder legal monopoly status), copyright, trademarkwork, symbol or device)

Building Customer Relationships

CRM Customer Relationship Management: the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. Keywords: It deals with all aspects of acquiring, keeping and growing customers. 3 approaches: financial benefits, social benefits and structural ties

Marketing Challenges
Digital age
Growth of the Internet Advances in telecommunications, information, transportation Customer research and tracking Product development Distribution New advertising tools-Internet, E-Commerce 24/7 marketing through the Internet

Globalization
Geographical and cultural distances have shrunk-borderless Greater market coverage More options for purchasing and manufacturing Increased competition from foreign competitors-pros & cons for SME

Ethics and social responsibility

Marketers need to take great responsibility for the impact of their actions Keywords: seek profit by serving the best long run interest of their customers and communities

Not-for-profit marketing
Many organizations are realizing the importance of strategic marketing. Example: Performing arts (museum, orchestras), Government agencies, Colleges,Hospitals, Churches

Marketing relationships
Profits through managing long-term customer equity Improve customer knowledge-for your latest product Target profitable customers Keep profitable customers Keywords: retain and maintain the customer relationship