Marketing: Managing Profitable Customer Relationships

1. Marketing: Managing Profitable Customer Relationships

2. What Is Marketing? • Marketing: The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return.

3. Marketing Process Understand the marketplace and customer need and wants Construct an integrated marketing program that delivers superior value Design a customer driven marketing strategy Capture value from customers to create profits and customer equity Build profitable relationships and create customer delight

4. Marketing Process (continued) Understand the marketplace and customer need and wants Research customers and the market place Manage marketing information and customer data

5. Marketing Process (continued) Design a customer driven marketing strategy Select customers to serve; Market segmentation; Targeting Decide on a value proposition: Differentiation and positioning

6. Marketing Process (continued) Product and service design: Build strong brands Pricing: Create real value Promotion: Communicate the value proposition Construct an integrated marketing program that delivers superior value Distribution: Manage demand and supply chain

7. Marketing Process (continued) Build profitable relationships and create customer delight Customer relationship management: Build strong relationships with chosen customers Partner relationship management: Build strong relationships with marketing partners

8. Marketing Process (continued) Capture value from customers to create profits and customer equity Create satisfied, loyal customers Increase share of market and share of customer Capture customer lifetime value

9. Marketing Strategy: Build Customer Relationships

10. Marketing Strategy And Marketing Mix • Target: Customer value and relationship. • Marketing Strategy: The marketing logic by which the business unit hopes to achieve its marketing objectives. • Marketing Mix: The set of controllable tactical marketing tools (product, price, place, promotion) that the firm blends to produce the response it wants in the target market.

11. Marketing Strategy And Marketing Mix (continued) • Marketing Strategy: 1. Segmentation. Dividing a market into distinct groups of buyers who have distinct needs, characteristics, or behavior. - geographic segmentation (nations, states, regions). - demographic segmentation (age, gender, family size, income, occupation, education, religion, race). - Psychographic segmentation (social class).

12. Marketing Strategy And Marketing Mix (continued) • Marketing Strategy (continued): 2. Targeting. The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.

13. Marketing Strategy And Marketing Mix (continued) • Marketing Strategy (continued): 2. Targeting (continued). Undifferentiated, (mass) marketing Differentiated, (segmented) marketing Micromarketing, (local/individual) marketing Concentrated, (niche) marketing

14. Marketing Strategy And Marketing Mix (continued) • Marketing Strategy (continued): 3. Differentiation. Actually differentiating the market offering to create superior customer value. 4. Positioning. Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in minds of target consumers.

15. Marketing Mix Price: List Price; Discounts; Payment Period Product: Variety; Quality; Design; Brand Name; Packaging Target Customers Intended Positioning Promotion: Advertising; Personal selling; Sales promotion; PR Place: Channels; Locations; Inventory; Transportation

16. Marketing Mix (continued)

17. Managing The Marketing Effort Marketing Analysis Control: Measure Results, Evaluate Results, Take corrective action Implementations: Carry out the plans Planning: Develop strategic plans Develop marketing plans

18. Marketing Analysis • The marketer should conduct a SWOT analysis, by which it evaluates the company’s overall: Strength (S); Weakness (W); Opportunities (O); Threats (T).

19. Marketing Analysis (continued) Internal External Negative Positive

20. Marketing Planning: Section: • Executive summary, • Current marketing situation, • Threat and opportunities analysis, • Objectives and issues, • Marketing strategy, • Action programs, • Budgets, • Controls.

21. Executive Summary • Present a brief summary of the main goals and recommendations of the plan for management review. • Helping top management to find the plan’s major points quickly.

22. Current Marketing Situation • Describes the target market and company’s position in it. • Information about the market, product performance, competition, and distribution.

23. Threats And Opportunities Analysis • Asses major threats and opportunities.

24. Objectives And Issues • States the marketing objectives that the company would like to attain during the plan’s term, and discuss key issues that will affect their attainment.

25. Marketing Strategy • Outlines the broad marketing logic by which the business unit hopes to achieve its marketing objectives and the specifics of target markets, positioning, and marketing expenditure levels.

26. Action Programs • Spells out how marketing strategies will be turned into specific action programs.

27. Budgets • Details a supporting marketing budget that is essentially a projected profit and loss statement.

28. Controls • Outlines the control that will be used to monitor progress and allow higher management to review implementation results and spot products that are not meeting their goals.

29. The Marketing Environment

30. Marketing Environment: • Microenvironment: The actors close to the company that affect its ability to serve its customers. • Macroenvironment: The larger societal forces that affect the microenvironment.

31. Actors In The Microenvironment: Publics Marketing Intermediaries Competitors Suppliers Customers The Company Marketing

32. Major Forces In The Company’s Macroenvironment: Political Forces Natural Forces Technological Forces Economic Forces Demographic Forces Cultural Forces Company

33. Changing Age Structure Of The Population • The baby boomers: born between 1946 and 1964. • Generation X: born between 1965 and 1976. • Generation Y: born between 1977 and 1994.

34. The Changing Family • Married couple without children. • Single parent. • More people are divorcing or separating. • The number of working women.

35. Geographic Shifts In Population

36. A Better-Educated, More White-Collar, More Professional Population

37. Increasing Diversity

38. Economic Environment • Changes in income. • Changing consumer spending patterns.

39. Managing Marketing Information

40. Marketing Information System (MIS) • People, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decisions.

41. Figure 4.1. Page 91The Marketing Information System Marketing Managers And Other Information Users Analysis Planning Implementation Control Marketing Information System: Developing needed information such as “Internal Databases”, “Information Analysis”, Marketing Intelligence”, “Marketing Research” Assessing Information needs Distributing And Using Information Marketing Environment Target Markets Marketing Channels Competitors Publics Macroenv

42. Developing Marketing Information • Internal Data: Electronic collections of consumer and market information obtained from data sources within the company network. • Marketing Intelligence. • Marketing Research.

43. Marketing Intelligence • Marketing Intelligence: The systematic collection and analysis of publicly available information about competitors and developments in the marketing environment.

44. Marketing Research • Marketing research: The systematic design, collection, analysis, and reporting of data relevant to specific marketing situation facing an organization.

45. The Marketing Research Process Defining the problem and research objectives Developing the research plan for collecting information Implementing the research plan, collecting and analyzing data Interpreting and reporting the findings

46. Product, Services, And Branding Strategy • Three levels of product Augmented Product: Delivery and Credit, Installation, After Sale Service, Warranty Actual Product: Brand Name, Quality Level, Packaging, Design, Features Core Benefit

47. Product, Services, And Branding Strategy • Important Decision In The Development And Marketing Of Individual Products/Services Branding: Name, Term, Sign, Symbol, Design Product Attributes: quality, features, style, design Packaging: Labeling: who made it, where it was made, when it was made, its contents Product Support Services

48. Product, Services, And Branding Strategy • Services Marketing Inseparability: Services cannot be separated from their provider Intangibility: Service cannot be seen, tasted, felt, heard, or smelled before purchase Services Perishability: Services cannot be stored for later sale or use Variability: Quality of services depends on who provides them and when, where, and how

49. Product, Services, And Branding Strategy • 3 Type Of Service Marketing Company Internal Marketing External Marketing Customers Employees Interactive Marketing

50. Pricing Product: Understanding And Capturing Customer Value • Considerations In Setting Price Other Internal And External Considerations =========================== Marketing Strategy, Objectives, and Mix Nature Of the Market and Demand Competitors’ Strategies And Prices Customer Perception Of Value Product Costs Price Floor, No profits below this price Price Ceiling, No demand above this price