Chapter One

1. Chapter One Marketing: Managing Profitable Customer Relationships

2. Lecture Plan • What is Marketing? • The Marketing Process • Needs, Wants, and Demands • Marketing Myopia • Value and Satisfaction • Exchange vs Transaction • What is a Market? • Modern Marketing Systems • Marketing Management • Value Proposition • Marketing Management Philosophies

3. What Is Marketing? Simple Definition: Marketing is managing profitable customer relationships. Goals: • Attract new customers by promising superior value. • Keep and grow current customers by delivering satisfaction.

4. Marketing Defined • A social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. OLD Viewof Marketing:Making a Sale –“Telling & Selling” New View of Marketing: Satisfying customer needs NEW View of Marketing:Satisfying Customer Needs

5. Lecture Plan • What is Marketing? • The Marketing Process • Needs, Wants, and Demands • Marketing Myopia • Value and Satisfaction • Exchange vs Transaction • What is a Market? • Modern Marketing Systems • Marketing Management • Value Proposition • Marketing Management Philosophies

6. The Marketing Process • A simple model of the marketing process: • Understand the marketplace and customer needs and wants. • Design a customer-driven marketing strategy (4 Ps – Marketing Mix). • Construct a marketing program that delivers superior value. • Build profitable relationships and create customer delight. • Capture value from customers to create profits and customer quality.

7. Lecture Plan • What is Marketing? • The Marketing Process • Needs, Wants, and Demands • Marketing Myopia • Value and Satisfaction • Exchange vs Transaction • What is a Market? • Modern Marketing Systems • Marketing Management • Value Proposition • Marketing Management Philosophies

8. Needs, Wants, & Demands • Need:State of felt deprivation including physical, social, and individual needs. • Physical needs: • Food, clothing, shelter, safety • Social needs: • Belonging, affection • Individual needs: • Learning, knowledge, self-expression

9. Needs, Wants, & Demands • Wants:Form that a human need takes, as shaped by culture and individual personality. • Wants + Buying Power = Demand

10. Need / Want Fulfillment • Needs and wants are fulfilled through a Marketing Offer: Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

11. Services Activity or benefit offered for sale that is essentially intangible and does not result in ownership. Need / Want Satisfiers • Products: • Persons • Places • Organizations • Information • Ideas

12. Lecture Plan • What is Marketing? • The Marketing Process • Needs, Wants, and Demands • Marketing Myopia • Value and Satisfaction • Exchange vs Transaction • What is a Market? • Modern Marketing Systems • Marketing Management • Value Proposition • Marketing Management Philosophies

13. Marketing Myopia • Marketing myopia occurs when sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products. • They focus on the “wants” and lose sight of the “needs.”

14. Lecture Plan • What is Marketing? • The Marketing Process • Needs, Wants, and Demands • Marketing Myopia • Value and Satisfaction • Exchange vs Transaction • What is a Market? • Modern Marketing Systems • Marketing Management • Value Proposition • Marketing Management Philosophies

15. Value & Satisfaction • Care must be taken when setting expectations: • If performance is lower than expectations, satisfaction is low. • If performance is higher than expectations, satisfaction is high.

16. Lecture Plan • What is Marketing? • The Marketing Process • Needs, Wants, and Demands • Marketing Myopia • Value and Satisfaction • Exchange vs Transaction • What is a Market? • Modern Marketing Systems • Marketing Management • Value Proposition • Marketing Management Philosophies

17. Transaction: A trade of values between two parties. One party gives X to another party and gets Y in return. Can include cash, credit, or check. Exchange vs. Transaction • Exchange: • Act of obtaining a desired object from someone by offering something in return.

18. Lecture Plan • What is Marketing? • The Marketing Process • Needs, Wants, and Demands • Marketing Myopia • Value and Satisfaction • Exchange vs Transaction • What is a Market? • Modern Marketing Systems • Marketing Management • Value Proposition • Marketing Management Philosophies

19. What Is a Market? • The set of actual and potential buyers of a product. • These people share a need or want that can be satisfied through exchange relationships.

20. Lecture Plan • What is Marketing? • The Marketing Process • Needs, Wants, and Demands • Marketing Myopia • Value and Satisfaction • Exchange vs Transaction • What is a Market? • Modern Marketing Systems • Marketing Management • Value Proposition • Marketing Management Philosophies

21. Modern Marketing Systems • Main elements in a modern marketing system include: • Suppliers • Company (marketer) • Competitors • Marketing intermediaries • Final users

22. Lecture Plan • What is Marketing? • The Marketing Process • Needs, Wants, and Demands • Marketing Myopia • Value and Satisfaction • Exchange vs Transaction • What is a Market? • Modern Marketing Systems • Marketing Management • Value Proposition • Marketing Management Philosophies

23. Marketing Management • The art and science of choosing target markets and building profitable relationships with them. • Requires that consumers and the marketplace be fully understood

24. Marketing Management • Designing a winning marketing strategy requires answers to the following questions: • 1.What customers will we serve? • What is our target market? • 2.How can we best serve these customers? • What is our value proposition?

25. Demarketing Temporarily or permanently reducing the number of customers or shifting their demand. Marketing Management • Demand Management • Finding and increasing demand, also changing or reducing demand, as in demarketing.

26. Lecture Plan • What is Marketing? • The Marketing Process • Needs, Wants, and Demands • Marketing Myopia • Value and Satisfaction • Exchange vs Transaction • What is a Market? • Modern Marketing Systems • Marketing Management • Value Proposition • Marketing Management Philosophies

27. Value Proposition • The set of benefits or values a company promises to deliver to consumers to satisfy their needs. • Value propositions dictate how firms will differentiate and position their brands in the marketplace.

28. Lecture Plan • What is Marketing? • The Marketing Process • Needs, Wants, and Demands • Marketing Myopia • Value and Satisfaction • Exchange vs Transaction • What is a Market? • Modern Marketing Systems • Marketing Management • Value Proposition • Marketing Management Philosophies

29. Marketing Management Philosophies • Production Concept • Product Concept • Selling Concept • Marketing Concept • Societal Marketing Concept

30. The Marketing Plan • Transforms the marketing strategy into action • Includes the marketing mix and 4 P’s of marketing: • Product • Price • Place (Distribution) • Promotion