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    Marketing: Managing Profitable Customer Relationships

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    azwan ayop
    Marketing is about managing profitable customer relationships. Attracting new customers, Retaining and growing current customers. Marketing management is the art and science of choosing target markets.

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    Marketing: Managing Profitable Customer Relationships

    Uploaded by

    azwan ayop
    2K views19 pages
    Marketing is about managing profitable customer relationships. Attracting new customers, Retaining and growing current customers. Marketing management is the art and science of choosing target markets.

    Original Title

    MKT420 Chapter 1

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    Marketing is about managing profitable customer relationships. Attracting new customers, Retaining and growing current customers. Marketing management is the art and science of choosing target markets.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    2K views19 pages

    Marketing: Managing Profitable Customer Relationships

    Uploaded by

    azwan ayop
    Marketing is about managing profitable customer relationships. Attracting new customers, Retaining and growing current customers. Marketing management is the art and science of choosing target markets.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    You are on page 1of 19

    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
    -the customers still keep on buying/using your
    product/services.
    Understanding the Marketplace
    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
    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
    Marketing offers
    Combination of products, services, information or experiences that satisfy a
    need or want
    Keywords: Offer may include services, activities, people, places, information
    or ideas
    Value
    Customers form expectations regarding value
    Marketers must deliver value to consumers
    Satisfaction
    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
    The act of obtaining a desired object from someone by offering
    something in return
    One exchange is not the goal, relationships with several exchanges
    are the goal
    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
    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. If the
    product’s cost is to high and improved productivity is needed to
    bring it down.
    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

    Selling concept
    Consumer: will not buy enough of firm’s 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 faces overcapacity, aim to sell what they
    make rather than the market wants.
    Marketing concept
    Company goal: on knowing the needs/wants of target markets and
    delivering the desired satisfaction better than competitor’s do.

    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 Plan
    Transforms the marketing strategy into action

    The Marketing Mix


    8P’s 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 firm’s corporate identity help to
    build customer awareness and loyalty
    Protection
    -patent (patent holder legal monopoly status), copyright, trademark-
    work, 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.
    Value and Satisfaction
    Perceived Value
    The customer’s evaluation of the difference between benefits and costs.
    (You get what you pay)
    Customers often do not judge values and costs accurately or objectively.
    Customer Satisfaction
    Product’s perceived performance relative to customer’s expectations.
    Capturing Value from Customers
    Customer Loyalty and Retention
    Customer delight leads to emotional relationships and loyalty
    Customer Lifetime Value (CLV) shows true worth of a customer
    Keywords: you will see your loss if the customer switch to your
    competitor. The loss is equivalent with the CLV. Therefore, try to
    retain your customer to capture positive CLV.
    Share of Customer
    Share of customer’s purchase in a product category.
    Achieved through offering greater variety, cross-sell and up-sell
    strategies
    Keywords:if you buy one product, you can earn bonus point, whereas
    you you can redeem the points to other products.
    Therefore, the customer will buy the product to earn more bonus
    point.
    Or otherwise, beside selling books, you also can sell accessories,
    gifts, toys, etc. ex: Amazon.
    Customer Equity
    The combined customer lifetime values of all current and potential
    customers.
    Measures a firm’s performance, but in a manner that looks to the
    future.
    Choosing the “best” customers is key
    Keywords:not just acquire the customer but keeping and growing
    them as well.
    Customer equity can be measure of a firm’s performance from
    current sales/market share. High customer that give profit, high
    customer equity.
    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

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