First Stop: Amazon.com • Reason for Amazon’s success —highly customer driven • Creates unique personal customer experience • Personalized home pages • Personalized product recommendations • “Discovery” factor—users of the site are compelled to look, learn, and discover • Archetype for other companies focused on delivering customer value Copyright © 2015 Pearson Education, Inc. 1-2 Marketing • Marketing involves creating value for customers and building strong customer relationships in order to capture value from customers in return. • Goals: • Attract new customers by promising superior value • Keep and grow current customers by delivering satisfaction Copyright © 2015 Pearson Education, Inc. 1-3 Forms of Marketing Traditional • View - Making a sale • Abundance of products in the nearby shopping centers • Television, magazine, and direct-mail ads Contemporary • View - Satisfying customer needs • Imaginative Web sites and mobile phone apps, blogs, online videos, and social media • Reach customers directly, personally, and interactively Copyright © 2015 Pearson Education, Inc. 1-4 Figure 1.1 - The Marketing Process: Creating and Capturing Customer Value Copyright © 2015 Pearson Education, Inc. 1-5 Understanding the Marketplace and Customer Needs • Core customer and marketplace concepts • Needs, wants, and demands • Market offerings (products, services, and experiences) • Value and satisfaction • Exchanges and relationships • Markets Copyright © 2015 Pearson Education, Inc. 1-6 Customer Needs, Wants, and Demands Needs • States of felt deprivation • Physical needs - Food, clothing, warmth, and safety • Social needs - Belonging and affection • Individual needs - Knowledge and self-expression Wants • Form taken by human needs when shaped by culture and individual personality Demands • Human wants that are backed by buying power Copyright © 2015 Pearson Education, Inc. 1-7 Market Offerings • Combination of products, services, information, or experiences • Offered to a market to satisfy a need or want • Entities—products, services, persons, places, organizations, information, and ideas • Marketing myopia: Paying more attention to the specific products a company offers than to the benefits and experiences produced by these products Copyright © 2015 Pearson Education, Inc. 1-8 Customer Value and Satisfaction • Customers form expectations about the value and satisfaction of market offerings. • Satisfied customers buy again and spread the word. • Dissatisfied customers switch to competitors and criticize the product to others. • Setting low expectations may satisfy those who buy but fail to attract enough buyers. • Setting high expectations may disappoint buyers. Copyright © 2015 Pearson Education, Inc. 1-9 Exchanges and Relationships • Exchange is the act of obtaining a desired object from someone by offering something in return. • Marketing consists of creating, maintaining, and growing desirable exchange relationships with target audiences. • Marketers build strong relationships by consistently delivering superior customer value. Copyright © 2015 Pearson Education, Inc. 1-10 Markets • Set of all actual and potential buyers of a product or service • Consumers market: • Search for products • Interact with companies to obtain information • Make purchases • Customer-managed relationships are important as customers are empowered and marketing is made a two-way affair. Copyright © 2015 Pearson Education, Inc. 1-11 Figure 1.2 - A Modern Marketing System Copyright © 2015 Pearson Education, Inc. 1-12 Designing a Customer-Driven Marketing Strategy • Selecting customers to serve • Choosing a value proposition • Marketing management orientations • • • • • Production concept Product concept Selling concept Marketing concept Societal marketing concept Copyright © 2015 Pearson Education, Inc. 1-13 Figure 1.3 - The Selling and Marketing Concepts Contrasted Copyright © 2015 Pearson Education, Inc. 1-14 Figure 1.4 - Three Considerations Underlying the Societal Marketing Concept Copyright © 2015 Pearson Education, Inc. 1-15 Customer Relationship Management • Delivering superior customer value and satisfaction to build and maintain profitable customer relationships • Customer-perceived value: Customer’s evaluation of the difference between all the benefits and costs of a marketing offer relative to those of competing offers • Customer satisfaction: Extent to which a product’s perceived performance matches a buyer’s expectations Copyright © 2015 Pearson Education, Inc. 1-16 Customer Relationship Levels and Tools Levels Tools • Basic relationships • With low-margin customers • Full partnerships • With high-margin customers • Frequency marketing programs • Loyalty rewards programs • Club marketing programs Copyright © 2015 Pearson Education, Inc. 1-17 Customer-Engagement Marketing • Customer-engagement marketing involves fostering direct and continuous customer involvement in shaping brand conversations, experiences, and community. • Greater consumer empowerment means that companies should rely on marketing by attraction. • The key is to find ways to enter consumers’ conversations with engaging and relevant brand messages. Copyright © 2015 Pearson Education, Inc. 1-18 Consumer-Generated Marketing • Brand exchanges created by consumers • Consumers play an increasing role in shaping their own brand experiences and those of other consumers. • Occurs through: • Uninvited consumer-to-consumer exchanges • Invitation of consumers by companies • Asking for new product and service ideas • Asking to play an active role in shaping ads Copyright © 2015 Pearson Education, Inc. 1-19 Partner Relationship Management • Working closely with partners both inside and outside the company to jointly bring more value to customers • Partners inside the firm—cross-functional teams • Partners outside the firm—suppliers, channel partners Copyright © 2015 Pearson Education, Inc. 1-20 Creating Customer Loyalty and Retention • Keeping customers loyal proves economical to the company. • Customer lifetime value: Value of the entire stream of purchases a customer makes over a lifetime of patronage • Customer defections can be costly • Can lose that customer’s lifetime value Copyright © 2015 Pearson Education, Inc. 1-21 Customer Equity • Total combined customer lifetime values of all of the company’s current and potential customers • Helps to measure the future value of the company’s customer base • Increases when the loyalty of the firm’s profitable customers increases • Better measure of a firm’s performance than current sales or market share Copyright © 2015 Pearson Education, Inc. 1-22 The Changing Marketing Landscape • • • • • Digital age Changing economic environment Growth of not-for-profit marketing Rapid globalization Call for more ethics and social responsibility Copyright © 2015 Pearson Education, Inc. 1-23 The Digital Age: Online, Mobile, and Social Media Marketing • Digital and social media marketing: Engaging consumers via their digital devices using digital marketing tools and social media • Mobile marketing: Using mobile channels to stimulate immediate buying, make shopping easier, and enrich the brand experience • Blending the new digital approaches with traditional marketing creates a smoothly integrated marketing strategy and mix. Copyright © 2015 Pearson Education, Inc. 1-24 Rapid Globalization and Societal Marketing • Managers around the world are taking both local and global views of the company’s: • Industry • Competitors • Opportunities • Corporate ethics and social responsibility have become important for every business. Copyright © 2015 Pearson Education, Inc. 1-25 Marketing Environment • Outside forces that affect marketing management’s ability to build and maintain successful relationships with target customers • Microenvironment: Actors close to the company that affect its ability to serve its customers • Macroenvironment: Larger societal forces that affect the microenvironment Copyright © 2015 Pearson Education, Inc. 3-26 Figure 3.1 - Actors in the Microenvironment Copyright © 2015 Pearson Education, Inc. 3-27 Figure 3.2 - Major Forces in the Company’s Macroenvironment Copyright © 2015 Pearson Education, Inc. 3-28 Demographic Environment • Demography: Study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics • Marketers analyze: • • • • Changing age and family structures Geographic population shifts Educational characteristics Population diversity Copyright © 2015 Pearson Education, Inc. 3-29 Economic Environment • Economic factors that affect consumer purchasing power and spending patterns: • Industrial economies • Subsistence economies • Developing economies • Changes in consumer spending • Differences in income distribution Copyright © 2015 Pearson Education, Inc. 3-30 Natural Environment • Physical environment and natural resources needed as inputs by marketers or affected by marketing activities • Environmental sustainability concerns have grown steadily over past three decades. • Trends: • Shortages of raw materials • Increased pollution • Increased government intervention Copyright © 2015 Pearson Education, Inc. 3-31 Technological Environment • New technologies create new markets and opportunities. • Radio-frequency identification (RFID) is technology to track products through various points in the distribution channel. • Government agencies investigate and ban potentially unsafe products. Copyright © 2015 Pearson Education, Inc. 3-32 Political Environment • Forces that influence and limit various organizations and individuals in a society • Laws, government agencies, and pressure groups • Goals of enacting business legislation: • Protect companies from each other • Protect consumers from unfair business practices • Protect the interests of society against unrestrained business behavior Copyright © 2015 Pearson Education, Inc. 3-33 Strategic Planning • Strategic planning involves adapting the firm to take advantage of opportunities in its constantly changing environment. • Strategic planning helps a firm to maintain a strategic fit between its goals and capabilities and its changing marketing opportunities. Copyright © 2015 Pearson Education, Inc. 2 - 34 Role of Marketing in Strategic Planning • Provides a guiding philosophy • Marketing concept—company strategy should create customer value and build profitable relationships with the key customers • Provides inputs to strategic planners • Helps identify market opportunities and assess the firm’s potential to take advantage of them • Designs strategies for reaching the unit’s objectives Copyright © 2015 Pearson Education, Inc. 2 - 35 Marketing Strategy • Marketing logic by which the company hopes to create customer value and achieve profitable customer relationships • Marketing mix: Integration of product, price, place, and promotion • Activities for best marketing strategy and mix involve: • Marketing analysis • Planning, implementation, and control Copyright © 2015 Pearson Education, Inc. 2 - 36 Marketing Mix • Set of marketing tools the firm uses to implement its marketing strategy • • • • Product Price Place Promotion • Each tool should be blended into a comprehensive integrated marketing program. Copyright © 2015 Pearson Education, Inc. 1-37 The Four Ps of the Marketing Mix Copyright © 2015 Pearson Education, Inc. 1 - 38 Market Segmentation and Market Targeting Market segmentation • Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs Market segment • Group of consumers who respond in a similar way to a given set of marketing efforts Market targeting • Evaluating each market segment’s attractiveness and selecting one or more segments to enter Copyright © 2015 Pearson Education, Inc. 2 - 39 Positioning • Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers • Begins with differentiation • Differentiation: Differentiating the market offering to create superior customer value • The entire marketing program should support the chosen positioning strategy. Copyright © 2015 Pearson Education, Inc. 2 - 40 Figure 2.7 - SWOT Analysis: Strengths (S), Weaknesses (W), Opportunities (O), and Threats (T) Copyright © 2015 Pearson Education, Inc. 2 - 41 Contents of a Marketing Plan Section Purpose Executive summary Brief summary of the main goals and recommendations Current marketing situation Gives the market description and the product, competition, and distribution review Threats and opportunities analysis Helps management to anticipate important positive or negative developments Objectives and issues States and discusses marketing objectives and key issues Copyright © 2015 Pearson Education, Inc. 2 - 42 Contents of a Marketing Plan Section Purpose Marketing Outlines the broad marketing logic and the specifics of strategy target markets, positioning, marketing expenditure levels, and strategies for each marketing mix element Action programs Spells out how marketing strategies will be turned into specific action programs Budgets Details a supporting marketing budget that is a projected profit-and-loss statement Controls Outlines the controls that will be used to monitor progress, allow management to review implementation results, and spot products that are not meeting their goals Copyright © 2015 Pearson Education, Inc. 2 - 43 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2015 Pearson Education, Inc.
