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Principles of Marketing
Learning Objectives
After studying this chapter, you should be able to: 1. Define marketing and outline the steps in the marketing process 2. Explain the importance of understanding customers and the marketplace, and identify the five core marketplace concepts 3. Identify the key elements of a customer-driven marketing strategy and discuss the marketing management orientations that guide marketing strategy 4. Discuss customer relationship management, and identify strategies for creating value for customers and capturing value from customers in return 5. Describe the major trends and forces that are changing the marketing landscape in this age of relationships
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Chapter Concepts
1. 2. 3. 4. 5. 6. 7. 8.
What Is Marketing? Understanding the Marketplace and Customer Needs Designing a Customer-Driven Marketing Strategy Preparing an Integrated Marketing Plan and Program Building Customer Relationships Capturing Value from Customers The New Marketing Landscape So, What Is Marketing? Pulling It All Together
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What Is Marketing?
Marketing Defined
Marketing is the process by which companies create value for customers and build strong customer relationships to capture value from customers in return
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What Is Marketing?
The Marketing Process
1. 2. 3. 4. 5.
Understand the marketplace and customer wants and needs Design a customer-driven marketing strategy Construct a marketing plan that delivers superior value Build profitable relationships and create customer satisfaction Capture value from customers to create profit and customer equity
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Needs are states of deprivation Physicalfood, clothing, warmth, safety Socialbelonging and affection Individualknowledge and selfexpression
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Wants are the form that needs take as they are shaped by culture and individual personality Demands are wants backed by buying power
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Expectations Customers
Marketers
Exchange is the act of obtaining a desired object from someone by offering something in return Relationships consist of actions to build and maintain desirable relationships
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Marketing management is the art and science of choosing target markets and building profitable relationships with them What customers will we serve? How can we best serve these customers?
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De-marketing: Marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but to reduce or shift it.
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The value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needs
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Production concept Product concept Selling concept Marketing concept Societal concept
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Production concept is the idea that consumers will favor products that are available or highly affordable
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Product concept is the idea that consumers will favor products that offer the most quality, performance, and features for which the organization should therefore devote its energy to making continuous improvements
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Selling concept is the idea that consumers will not buy enough of the firms products unless it undertakes a large scale selling and promotion effort
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Marketing concept is the idea that achieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do
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Societal marketing concept is the idea that a company should make good marketing decisions by considering consumers wants, the companys requirements, consumers long-term interests, and societys long-run interests
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The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing strategy Product Price Promotion Place
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Integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers
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Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior value and satisfaction
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Basic relationship Full relationships Frequency marketing programs Club marketing programs
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Partner relationship management refers to working closely with partners in other company departments and outside the company to jointly bring greater value to customers
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Supply chain is a channel that stretches from raw materials to components to final products to final buyers Supply management Strategic partners Strategic alliances
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Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage
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Share of customer is the portion of the customers purchasing that a company gets in its product categories
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Customer equity is the total combined customer lifetime values of all of the companys customers
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Building the right relationships with the right customers involves treating customers as assets that need to be managed and maximized
Different types of customers require different relationship management strategies Build the right relationship with the right customers
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Recent technology has had a major impact on the ways marketers connect with and bring value to their customers Market research
Learning about and tracking customers
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Marketers are being called upon to take greater responsibility for the social and environmental impact of their actions in a global economy
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Social marketing campaigns encourage energy conservation and concern for the environment or discourage smoking, excessive drinking, and drug use
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Dowling College, MBA Georgetown University, BS Business Administration Adjunct Professor, LIM College, NY Adjunct Professor, Long Island University, NY Lecturer, California Polytechnic State University, Pomona, CA President, Walter Heimler, Inc.