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Marketing:ManagingProfitableCustomerRelationshipsChapter11Marketing:ManagingProfitableRoadMap:PreviewingtheConceptsDefinemarketingandoutlinethestepsinthemarketingprocess.Explaintheimportanceofunderstandingcustomersandthemarketplace,andidentifythefivecoremarketplaceconcepts.2RoadMap:PreviewingtheConceIdentifythekeyelementsofacustomer-drivenmarketingstrategyanddiscussthemarketingmanagementorientationsthatguidemarketingstrategy.Discusscustomerrelationshipmanagementandstrategiesforbuildinglastingcustomerrelationships.RoadMap:PreviewingtheConcepts3IdentifythekeyelementsofaDescribethemajortrendsandforcesthatarechangingthemarketinglandscapeinthisnewageofrelationships.RoadMap:PreviewingtheConcepts4DescribethemajortrendsandWhatisMarketing?SimpleDefinition:Marketingismanagingprofitablecustomerrelationships.Goals:Attractnewcustomersbypromisingsuperiorvalue.Keepandgrowcurrentcustomersbydeliveringsatisfaction.5WhatisMarketing?SimpleDefinMarketingDefinedAsocialandmanagerialprocessbywhichindividualsandgroupsobtainwhattheyneedandwantthroughcreatingandexchangingproductsandvaluewithothers.6MarketingDefinedAsocialandNeeds,Wants,&DemandsNeed:Stateoffeltdeprivationincludingphysical,social,andindividualneeds.Physical:Food,clothing,shelter,safetySocial:Belonging,affectionIndividual:Learning,knowledge,self-expression7Needs,Wants,&DemandsNeed:SWants:Formthatahumanneedtakes,asshapedbycultureandindividualpersonality.Wants+BuyingPower=DemandNeeds,Wants,&Demands8Wants:FormthatahumanneedNeed/WantFulfillmentNeedsandWantsFulfilledthroughaMarketingOffer

:Somecombinationofproducts,services,information,orexperiencesofferedtoamarkettosatisfyaneedorwant.9Need/WantFulfillmentNeedsaNeed/WantSatisfiersProducts:PersonsPlacesOrganizationsInformationIdeasServicesActivityorbenefitofferedforsalethatisessentiallyintangibleanddoesnotresultintheownershipofanything.10Need/WantSatisfiersProductsMarketingMyopiaSellerspaymoreattentiontothespecificproductstheyofferthantothebenefitsandexperiencesproducedbytheproducts.Theyfocusonthe“wants”andlosesightofthe“needs”11MarketingMyopiaSellerspaymoValue&SatisfactionIfperformanceislowerthanexpectations,satisfactionislowIfperformanceishigherthanexpectations,satisfactionishigh12Value&SatisfactionIfperformExchangevs.TransactionExchange:Actofobtainingadesiredobjectfromsomeonebyofferingsomethinginreturn.Transaction:Atradeofvaluesbetweentwoparties.OnepartygivesXtoanotherpartyandgetsYinreturn.Canincludecash,credit,orcheck.13Exchangevs.TransactionExchanWhatisaMarket?Thesetofactualandpotentialbuyersofaproduct.Thesepeopleshareaneedorwantthatcanbesatisfiedthroughexchangerelationships.14WhatisaMarket?ThesetofacMarketingManagementTheartandscienceofchoosingtargetmarketsandbuildingprofitablerelationshipswiththem.15MarketingManagementTheartanMarketingManagementQuestionstoask:Whatcustomerswillweserve? Whatisourtargetmarket?Howcanwebestservethesecustomers? Whatisourvalueproposition?16MarketingManagementQuestionsSegmentation&TargetMarketingMarketSegmentation:DividethemarketintosegmentsofcustomersTargetMarketing:Selectthesegmenttocultivate17Segmentation&TargetMarketinMarketingManagementDemandManagementFindingandincreasingdemand,alsochangingorreducingdemand,suchasindemarketing.DemarketingTemporarilyorpermanentlyreducingthenumberofcustomersorshiftingtheirdemand18MarketingManagementDemandManValuePropositionThesetofbenefitsorvaluesacompanypromisestodelivertoconsumerstosatisfytheirneeds.19ValuePropositionThesetofbeMarketingManagementPhilosophiesProductionConceptProductConceptSellingConceptMarketingConceptSocietalMarketingConcept20MarketingManagementPhilosophTheMarketingMixProductPriceDistribution(Place)Promotion21TheMarketingMixProduct21CustomerRelationshipManagementTheprocessofbuildingandmaintainingprofitablecustomerrelationshipsbydeliveringsuperiorcustomervalueandsatisfaction.22CustomerRelationshipManagemeCustomerPerceivedValueCustomer’sevaluationofthedifferencebetweenallthebenefitsandallthecostsofamarketingofferrelativetothoseofcompetingoffers.23CustomerPerceivedValueCustomCustomerSatisfactionDependentontheproduct’sperceivedperformancerelativetoabuyer’sexpectations.24CustomerSatisfactionDependentLoyalty&RetentionFinancialBenefitsSocialBenefitsStructuralTiesFocusonprofitablecustomers25Loyalty&RetentionFinancialBPartnerRelationshipMarketingPartnersinsidethefirmAllemployeescustomerfocusedTeamscoordinateeffortstowardcustomersPartnersoutsidethefirmSupplychainmanagementStrategicalliances26PartnerRelationshipMarketingCustomerLoyalty&RetentionCustomerLifetimeValueTheentirestreamofpurchasesthatthecustomerwouldmakeoveralifetimeofpatronage.ShareofCustomerTheshareacompanygetsofthecustomerspurchasingintheirproductcategories.27CustomerLoyalty&RetentionCuCustomerEquityCustomerequityisthetotalcombinedcustomerlifetimevaluesofallthecompany’scustomers.28CustomerEquityCustomerequityTheInternetThetechnologybehindaNewEconomyApplications:“Click-and-mortar”companies“Click-only”companiesBusiness-to-businesse-commerce29TheInternetThetechnologybehNewMarketingLandscapeRapidGlobalizationEthics&SocialResponsibilityNot-for-ProfitMarketingNewWorldofMarketingRelationships30NewMarketingLandscapeRapidGRestStop:ReviewingtheConceptsDefinemarketingandoutlinethestepsinthemarketingprocess.Explaintheimportanceofunderstandingcustomersandthemarketplace,andidentifythefivecoremarketplaceconcepts.31RestStop:ReviewingtheConceIdentifythekeyelementsofacustomer-drivenmarketingstrategyanddiscussthemarketingmanagementorientationsthatguidemarketingstrategy.Discusscustomerrelationshipmanagementandstrategiesforbuildinglastingcustomerrelationships.RestStop:ReviewingtheConcepts32IdentifythekeyelementsofaDescribethemajortrendsandforcesthatarechangingthemarketinglandscapeinthisnewageofrelationships.RestStop:ReviewingtheConcepts33DescribethemajortrendsandMarketing:ManagingProfitableCustomerRelationshipsChapter134Marketing:ManagingProfitableRoadMap:PreviewingtheConceptsDefinemarketingandoutlinethestepsinthemarketingprocess.Explaintheimportanceofunderstandingcustomersandthemarketplace,andidentifythefivecoremarketplaceconcepts.35RoadMap:PreviewingtheConceIdentifythekeyelementsofacustomer-drivenmarketingstrategyanddiscussthemarketingmanagementorientationsthatguidemarketingstrategy.Discusscustomerrelationshipmanagementandstrategiesforbuildinglastingcustomerrelationships.RoadMap:PreviewingtheConcepts36IdentifythekeyelementsofaDescribethemajortrendsandforcesthatarechangingthemarketinglandscapeinthisnewageofrelationships.RoadMap:PreviewingtheConcepts37DescribethemajortrendsandWhatisMarketing?SimpleDefinition:Marketingismanagingprofitablecustomerrelationships.Goals:Attractnewcustomersbypromisingsuperiorvalue.Keepandgrowcurrentcustomersbydeliveringsatisfaction.38WhatisMarketing?SimpleDefinMarketingDefinedAsocialandmanagerialprocessbywhichindividualsandgroupsobtainwhattheyneedandwantthroughcreatingandexchangingproductsandvaluewithothers.39MarketingDefinedAsocialandNeeds,Wants,&DemandsNeed:Stateoffeltdeprivationincludingphysical,social,andindividualneeds.Physical:Food,clothing,shelter,safetySocial:Belonging,affectionIndividual:Learning,knowledge,self-expression40Needs,Wants,&DemandsNeed:SWants:Formthatahumanneedtakes,asshapedbycultureandindividualpersonality.Wants+BuyingPower=DemandNeeds,Wants,&Demands41Wants:FormthatahumanneedNeed/WantFulfillmentNeedsandWantsFulfilledthroughaMarketingOffer

:Somecombinationofproducts,services,information,orexperiencesofferedtoamarkettosatisfyaneedorwant.42Need/WantFulfillmentNeedsaNeed/WantSatisfiersProducts:PersonsPlacesOrganizationsInformationIdeasServicesActivityorbenefitofferedforsalethatisessentiallyintangibleanddoesnotresultintheownershipofanything.43Need/WantSatisfiersProductsMarketingMyopiaSellerspaymoreattentiontothespecificproductstheyofferthantothebenefitsandexperiencesproducedbytheproducts.Theyfocusonthe“wants”andlosesightofthe“needs”44MarketingMyopiaSellerspaymoValue&SatisfactionIfperformanceislowerthanexpectations,satisfactionislowIfperformanceishigherthanexpectations,satisfactionishigh45Value&SatisfactionIfperformExchangevs.TransactionExchange:Actofobtainingadesiredobjectfromsomeonebyofferingsomethinginreturn.Transaction:Atradeofvaluesbetweentwoparties.OnepartygivesXtoanotherpartyandgetsYinreturn.Canincludecash,credit,orcheck.46Exchangevs.TransactionExchanWhatisaMarket?Thesetofactualandpotentialbuyersofaproduct.Thesepeopleshareaneedorwantthatcanbesatisfiedthroughexchangerelationships.47WhatisaMarket?ThesetofacMarketingManagementTheartandscienceofchoosingtargetmarketsandbuildingprofitablerelationshipswiththem.48MarketingManagementTheartanMarketingManagementQuestionstoask:Whatcustomerswillweserve? Whatisourtargetmarket?Howcanwebestservethesecustomers? Whatisourvalueproposition?49MarketingManagementQuestionsSegmentation&TargetMarketingMarketSegmentation:DividethemarketintosegmentsofcustomersTargetMarketing:Selectthesegmenttocultivate50Segmentation&TargetMarketinMarketingManagementDemandManagementFindingandincreasingdemand,alsochangingorreducingdemand,suchasindemarketing.DemarketingTemporarilyorpermanentlyreducingthenumberofcustomersorshiftingtheirdemand51MarketingManagementDemandManValuePropositionThesetofbenefitsorvaluesacompanypromisestodelivertoconsumerstosatisfytheirneeds.52ValuePropositionThesetofbeMarketingManagementPhilosophiesProductionConceptProductConceptSellingConceptMarketingConceptSocietalMarketingConcept53MarketingManagementPhilosophTheMarketingMixProductPriceDistribution(Place)Promotion54TheMarketingMixProduct21CustomerRelationshipManagementTheprocessofbuildingandmaintainingprofitablecustomerrelationshipsbydeliveringsuperiorcustomervalueandsatisfaction.55CustomerRelationshipManagemeCustomerPerceivedValueCustomer’sevaluationofthedifferencebetweenallthebenefitsandallthecostsofamarketingofferrelativetothoseofcompetingoffers.56CustomerPerceivedValueCustomCustomerSatisfactionDependentontheproduct’sperceivedperformancerelativetoabuyer’sexpectations.57CustomerSatisfactionDependentLoyalty&RetentionFinancialBenefitsSocialBenefitsStructuralTiesFocusonprofitablecustomers58Loyalty&RetentionFinancialBPartnerRelationshipMarketingPartnersinsidethefirmAllemployeescustomerfocusedTeamscoordinateeffortstowardcustomersPartnersoutsidethefirmSupplychainmanagementStrategicalliances59PartnerRelationshipMarketingCustomerLoyalty&RetentionCustomerLifetimeValueTheentirestreamofpurchasesthatthecustomerwouldmakeoveralifetimeofpatronage.ShareofCustomerTheshareacom

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