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Marketing: Managing

Profitable Customer
Relationships
Chapter 1
Objectives
• Be able to define marketing
and discuss its core
concepts.
• Be able to define marketing
management and compare
the five marketing
management orientations. 1-2
Objectives
• Understand customer
relationship management
and strategies.
• Realize the major
challenges facing
marketers in the new
“connected” millennium. 1-3
Case Study
Amazon.com
• Strong sales, • Provides
no profits great
• Customer- selection,
driven to its good value,
core discovery
• Each and
customer’s convenience
Discussion: Will Amazon.com Survive?
experience is • A true online1 - 4
What is Marketing?
• Marketing is managing
profitable customer
relationships
 Attracting new customers
 Retaining and growing
current customers
• “Marketing” is NOT
synonymous with “sales” or 1-5
What is Marketing?
• Kotler’s social definition:
“Marketing is 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.” 1-6
What is Marketing?

Many Things Can Be


Marketed!
• Goods • Places
• Services • Properties
• Experiences • Organizations
• Events • Information
• Persons • Ideas
1-7
What is Marketing?

Core Marketing Concepts


• Needs, • Value and
wants, and satisfaction
demands
• Exchange,
• Marketing transactions
offers:
and
including
products, relationships
services and • Markets 1-8
Marketing
Management
• Marketing management is
“the art and science of
choosing target markets and
building profitable
relationships with them.”
 Creating, delivering and
communicating superior
customer value is key.
1-9
Marketing
Management
• Customer Management:
 Marketers select customers
that can be served well and
profitably.
• Demand Management:
 Marketers must deal with
different demand states
ranging from no demand to
1 - 10
Marketing
Marketing
Management
Management
Management Orientations
• Production • Selling
concept concept
• Product • Marketing
• concept concept
Societal marketing concept

1 - 11
CRM
• CRM – Customer
relationship
management . . .
“is the overall process of
building and maintaining
profitable customer
relationships by delivering
superior customer 1 - 12
CRM
• It costs 5 to 10 times
MORE to attract a new
customer than it does to
keep a current customer
satisfied.
• Marketers must be
concerned with the
lifetime value of the 1 - 13
CRM
• Customer
Key Concepts value/satisfaction
 Perceptions are key
 Meeting/exceeding
• Attracting, expectations creates
satisfaction
retaining and • Loyalty and retention
growing  Benefits of loyalty
 Loyalty increases as
customers satisfaction levels
increase
• Building  Delighting consumers
customer should be the goal
• Growing share of
relationships customer 1 - 14
CRM
• Customer equity
Key Concepts  The total
combined
• Attracting, customer lifetime
retaining and values of all
growing customers.
customers  Measures a firm’s
performance, but
• Building in a manner that
customer looks to the
relationships future.
1 - 15
CRM
• Customer
Key Concepts relationship levels
and tools
• Attracting,  Target market
typically dictates
retaining and type of relationship
growing  Basic relationships
 Full relationships
customers  Customer loyalty
• Building and retention
programs
customer  Adding financial
relationships benefits
 Adding social benefits
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Marketing Challenges
• Technological advances, rapid
globalization, and continuing
social and economic shifts are
causing marketplace changes.
• Major marketing
developments can be grouped
under the theme of
Connecting.
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Marketing Challenges
Connecting • Advances in
computers,
telecommunications,
• Via video-conferencing,
etc. are major forces.
technology  Databases allow for
customization of
• With products, messages
and analysis of
customers needs.
• The Internet
• With  Facilitates anytime,
anywhere
marketing connections 1 - 18
Marketing Challenges
Connecting • Selective
relationship
management is
• Via key.
technology  Customer
profitability
• With analysis separates
winners from
customers losers.
• Growing “share of
• With customer”
marketing  Cross-selling and
1 - 19
Marketing Challenges
Connecting • Partner
relationship
• Via management
involves:
technology  Connecting inside
• With the company
 Connecting with
customers outside partners
• With  Supply chain
management
marketing  Strategic 1 - 20
Marketing Challenges
• Globalization
Connecting  Competition
 New opportunities
• Via • Greater concern
technology for environmental
and social
• With responsibility
customers • Increased
marketing by
• With nonprofit and
marketing public-sector
entities 1 - 21

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