Chapter 1 Creating Customer Relationships and Value Through Marketing I What is marketing a Students are involved in marketing every day b Students are not marketing experts II Marketing defined a Marketing is the activity set of institutions and processes for creating communicating delivering and exchanging offerings that have value for customers clients partners and society at large The American Marketing Association b Some controversy about the definition c Example i Kosec Importance of marketing to Time Warner business services 1 Collect marketing trends and data 2 Helps to determine incentives 3 Use research and tools to drive sales through organizations 4 Through brand awareness d What marketing seeks to do through an integrated effort i Discover needs and wants of customers and satisfy customers at a profit e Involves the idea of exchange which is the trade of things of value between buyer and seller so that each is better off after the trade III Factors influencing marketing a The organization i Mission 1 Goals and objectives ii Management and people skills iii Resources b Society c Environmental factors environmental forces d Ways to satisfy needs i Example i A marketing department relates to many people organizations and 1 Ways to get a funny birthday card a Make it yourself b Steal one c Voluntarily offer someone something of value in exchange for a card i Describes an exchange in the marketing sense IV Requirements for marketing to occur a Two or more parties involved in a voluntary each with unsatisfied needs b Each must have a desire and ability to engage in an exchange 1 They need to be able to communicate c d Each party must have something of value to exchange V What do people want a In order to satisfy consumers needs wants and desires at a profit through an integrated effort of the organization we need to understand what people want i Problems 1 People may not know what they want 2 People may not be able to tell others what they want 3 People may not be able to see the future and how unknown products might satisfy them VI Needs and wants a Consumer needs come from human needs i These are basic to life and society and include the need b Consumer wants are ways to satisfy needs that are shaped by the environment culture and personality VII What is a market a The market is the set of all actual and potential buyers of a product b Implications of the definition MAD i Purchasing power Money 1 Something of value to exchange ii Authority 1 Ability to engage in an exchange iii Willingness to purchase Demand 1 Desire to engage in an exchange VIII Marketing seeks to discover then satisfy consumer needs through research and a marketing program 2 IX How marketing satisfies consumer needs wants and desires a We cannot be all things to all people so we must focus our marketing efforts on one of more specific groups of consumers i Target market X The marketing mix a The marketing mix represents the tools marketers have to satisfy consumers needs wants and desires b This consists of the 4 P s of the marketing mix Product i ii Price iii Promotion iv Place c Most of a firm s marketing efforts involve the design implementation and evaluation of the marketing mix XI Important factors in the marketing environment XII Satisfaction through value 3 a Consumer value is unique combination of benefits received by targeted buyers that includes quality convenience on time delivery and both before sale and after sale service at a specific price b Examples of satisfaction through value i Tim Apel AAA Mobile Homes on creating value 1 Create value though service and doing it right 2 To provide satisfaction and repeat business and referrals 3 Getting more than they are paying for Across many industries we ve seen that the retailers that grow customer service ratings the fastest have greater sales growth Chris Denove of J D Power and Associates ii iii Prices have come down dramatically on electronics items and at the same time the complexity of the products has increased Expert advice is more important than ever Jayne O Donnell of USA Today XIII Value strategies a Best price b Best product Best service c d What is best i It depends on one s firm s missions and objectives one s competitive situation one s environment and one s customers e Examples of value strategies i Douglas Conant President and CEO Campbell s Soup Company 1 Reversed a decline in market value 2 Stressed products that rank number 1 or number 2 in the key categories of simple meals baked snacks and veggie based drinks 3 Dropped non core brands a Godiva chocolates 4 Focused on healthier for soups V8 drinks and Pepperidge Farm 5 Pushed creating products that scream value nutrition and 6 States that there are four musts for consumer products snacks convenience a Value b Wellness c Quality d Convenience ii Fred Hunt Delivering value to the customer at Sherwin Williams 1 Value is the game 2 It is the way to best competition 3 The products may be similar but quality consistency reliability selection the best 4 Get it done right 5 Deliver on the promise 4 XIV Relationship marketing a Relationship marketing links the organization to its individual customers employees suppliers and other partners for their mutual long term benefits b Example of relationship marketing i Rob Felber Felber and Felber Marketing Services Creating value for customers 1 Be a helpful resource for them 2 Be an advisor to them 3 Be there when one is needed 4 Provide a little extra for them XV The evolution of the market orientation Marketing management philosophies a Production concept i ii Assumes consumers want products that are available and highly affordable Implies management should focus on improving production and distribution efficiently iii Useful when 1 Demand exceeds supply 2 Product cost is too high b Product concept i Assumes consumers want products that offer the most quality performance and features Implies the firm should make continuous product improvements ii iii Places the focus on the product not on the customer c Selling concept ii Useful for i Assumes consumers will not buy enough product unless there is a strong sales and promotional effort 1 Unsought goods 2 Industries with overcapacity who must sell what they make rather than make what the market wants d The marketing concept i ii Assumes that achieving the organization s goals depends on determining and satisfying customers more effectively and efficiently than competitors An organization
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