Marketing in a Changing World: Creating Customer Value and Satisfaction

1. Chapter 1 Marketing in a Changing World: Creating Customer Value and Satisfaction

2. What is Marketing? Process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. Simply put: Marketing is the delivery of customer satisfaction at a profit.

3. Core Marketing Concepts (Fig. 1-1) Needs, wants, and demands Markets Products and services Exchange, transactions, and relationships Value, satisfaction, and quality

4. What are Consumer’s Needs, Wants and Demands? • Needs - state of felt deprivation for basic items such as food and clothing and complex needs such as for belonging. i.e. I am hungry. • Wants - form that a human need takes as shaped by culture and individual personality. i.e. I want a hamburger, French fries, and a soft drink. • Demands - human wants backed by buying power. i.e. I have money to buy this meal.

5. Experiences Persons Places Organizations Information Ideas What Will Satisfy Consumer’s Needs and Wants? Products Anything that can be Offered to a Market to Satisfy a Need or Want Services Activities or Benefits Offered for Sale That Are Essentially Intangible and Don’t Result in the Ownership of Anything

6. Value Gained From Owning a Product and Costs of Obtaining the Product is Customer Value Product’s Perceived Performance in Delivering Value Relative to Buyer’s Expectations is Customer Satisfaction Total Quality Management Involves Improving the Quality of Products, Services, and Marketing Processes How Do Consumers ChooseChoose Among Products and Services?

7. How Do Consumers Obtain Products and Services? Exchanges Transactions Relationships Building a Marketing Network Consisting of The Company and All Its Supporting Stakeholders

8. Unexpected Situational Factors Market –Buyers who share a particular need or want that can be satisfied through exchange or relationships. People Who Exhibit Need Actual Buyers Ethical Resources to Exchange Attitudes of Others Potential Buyers Willingness to Exchange Who Purchases Products and Services?

9. Suppliers Modern Marketing System (Fig. 1-3) Competitors Company (Marketer) Marketing Intermediaries Environment End User Market Environment

10. Discussion Connections • In your own words, what is marketing? • What does marketing mean to you? • Form small groups, and select a brand of athletic shoes that a group member has purchased recently. • What Customer Value did the group member expect? • Did the member experience Customer Satisfaction? Why or why not?

11. Marketing Management Profitable Customer Relationships Attracting new customers and retaining and building relationships with current customers Demand Management Finding and increasing demand, also changing or reducing demand such as in Demarketing Marketing Management Implementing programs to create exchanges with target buyers to achieve organizational goals

12. Marketing Management Practice Stage 1. Entrepreneurial Marketing Stage 2. Formulated Marketing Stage 3. Entrepreneurial Marketing

13. Marketing Management Philosophies • Consumers favor products that are • available and highly affordable. • Improve production and distribution. • Consumers favor products that offer • the most quality, performance, and • innovative features. • Consumers will buy products only if • the company promotes/ sells these • products. • Focuses on needs/ wants of target • markets & delivering satisfaction • better than competitors. • Focuses on needs/ wants of target • markets & delivering superior value. Production Concept Product Concept Selling Concept Marketing Concept Societal Marketing Concept

14. The Selling Concept Starting Point Focus Means Ends Selling and Promoting Profits through Volume Factory Existing Products The Marketing Concept Integrated Marketing Profits through Satisfaction Market Customer Needs Marketing and Sales Concepts Contrasted

15. Societal Marketing Concept Society (Human Welfare) Societal Marketing Concept Consumers (Want Satisfaction) Company (Profits)

16. Marketing Challenges in the New “Connected” Millennium Connections with Customers Connecting more selectively Connecting for life Connecting Directly Connecting Technologies Computer Information Communication Transportation • Connections with the world around us • Global Connections • Connections with values and responsibilities • Broadened connections • Connections with Marketing Partners • Connecting with other company departments • Connecting with suppliers and distributors • Connecting through strategic alliances Text page 23

17. Technologies for Connecting Learn About & Track Customers With Databases Create Products & Services Tailored to Meet Customer Needs Connecting Technologies in Computers, Telecommunications, Information, & Transportation Help To: Communicate With Customers in Groups Or One-on-One Distribute Products More Efficiently & Effectively

18. The Internet • The Internet has been hailed as the technology behind a new model for doing business. • New applications include: • Internet – connecting with customers, • Intranets – connecting with others in the company, and • Extranets – connecting with strategic partners, suppliers, and dealers. • Purchasing will be over $1.4 trillion in 2003. • 400,000 companies are now using the Internet to do business.

19. Connections With Customers • Most marketers are targeting fewer, potentially more profitable customers. • Asking: • What value does the customer bring to the organization? • Are they worth pursuing? • Focus has shifted to: • keeping current customers, and • building lasting relationships based on superior satisfaction and value.

20. Direct Connections With Customers • Many companies use technologies to let them connect more directly with their customers. • Products available via telephone, mail-order catalogs, kiosks and e-commerce. • Some firms sell only via direct channels (i.e. Dell Computer, www.Amazon.com), others use a combination. • Direct marketing is redefining the buyer’s role in connecting with sellers. • Buyers are active participants in shaping the marketing offer and process; some buyers design their own products online such as at www.LandsEnd.com.

21. Connecting Inside the Company Every employee must be customer-focused Teams coordinate efforts toward customers Connecting With Outside Partners Supply Chain Management Strategic Alliances Connections With Marketing’s Partners

22. Connections With the World Around Us Global Connections Broadening Connections Values Connections Social Responsibility Connections

23. Review of Concept Connections • Define what marketing is and discuss its core concepts. • Explain the relationships between customer value, satisfaction, and quality. • Define marketing management and examine how marketers manage demand and build profitable customer relationships. • Compare the five marketing management philosophies. • Analyze the major challenges facing marketers heading into the next millennium.