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Foundations of Marketing

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  1. BA320 Summer 2006 Foundations of Marketing

  2. Agenda for Today • Define the marketing process. • Explain the importance of understanding customers and identify the five core marketplace concepts. • Identify the elements of a customer-driven marketing strategy and discuss the marketing management orientations. • Discuss customer relationship management and creating value for and capturing value from customers. BA320 – Summer 2006

  3. The Marketing Process • Understand the marketplace and customer needs and wants. • Design a customer-driven marketing strategy. • 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. BA320 – Summer 2006

  4. 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 • Brand Experiences: “. . . dazzle their senses, touch their hearts, stimulate their minds.” BA320 – Summer 2006

  5. Marketing in Action Products Can Be Ideas Products do not have to be physical objects. Here the “product” is an idea -- protecting animals. Products can also be people, organizations, places, or information. BA320 – Summer 2006

  6. 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.” BA320 – Summer 2006

  7. Marketing in Action Marketing Myopia in the Recording Industry BA320 – Summer 2006

  8. 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. BA320 – Summer 2006

  9. Marketing in Action Setting Expectations This tongue in cheek ad pokes fun at the advertising industry’s tendency toward hyperbole when setting consumer expectations for goods and services. BA320 – Summer 2006

  10. 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. BA320 – Summer 2006

  11. 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. BA320 – Summer 2006

  12. Discussion BA320 – Summer 2006

  13. Figure 1-2Elements of a Modern Marketing System BA320 – Summer 2006

  14. 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 BA320 – Summer 2006

  15. 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? BA320 – Summer 2006

  16. Segmentation & Target Marketing • Market Segmentation: • Divide the market into segments of customers • Target Marketing: • Select the segment to cultivate BA320 – Summer 2006

  17. Let’s Talk! BA320 – Summer 2006

  18. Marketing Management Philosophies • Production Concept • Product Concept • Selling Concept • Marketing Concept • Societal Marketing Concept BA320 – Summer 2006

  19. Figure 1-3Marketing and Sales Concepts Contrasted BA320 – Summer 2006

  20. Marketing in Action Customer-Driven Marketing Twenty years ago, how many consumers would have thought to ask for laptops, wireless headsets, cell phones, MP3 players, PDAs, and digital cameras? Marketers must often understand customer needs even better than customers themselves do; customers often can’t articulate what they really need. BA320 – Summer 2006

  21. The Marketing Plan • Transforms the marketing strategy into action • Includes the marketing mix and 4 P’s of marketing: • Product • Price • Place (Distribution) • Promotion BA320 – Summer 2006

  22. Customer Relationship Management • The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. • Acquiring customers • Keeping customers • Growing customers BA320 – Summer 2006

  23. Discussion BA320 – Summer 2006

  24. Customer Relationships • Loyalty and retention programs build relationships and may feature: • Financial Benefits • EX: Frequency marketing programs • Social Benefits • EX: Club marketing programs • Structural Ties • Focus is on relating directly to profitable customers, for the longterm. BA320 – Summer 2006

  25. Share of Customer The share a company gets of the customers purchasing in their product categories. Customer Loyalty & Retention • Customer Lifetime Value • The entire stream of purchases that the customer would make over a lifetime of patronage. BA320 – Summer 2006

  26. Discussion BA320 – Summer 2006

  27. Figure 1-5Customer Relationship Groups BA320 – Summer 2006

  28. Rest Stop:Reviewing the Concepts • Define marketing and the marketing process. • Explain the importance of understanding customers and identify the five core marketplace concepts. • Identify the elements of a customer-driven marketing strategy and discuss the marketing management orientations. • Discuss customer relationship management and creating value for and capturing value from customers. BA320 – Summer 2006