Marketing Creating Value for Customers Irwin/McGraw-Hill Gilbert A. Churchill, Jr. © The McGraw-Hill J. Paul Peter Companies, Inc., 1998
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Marketing Creating Value for Customers Irwin/McGraw-Hill Gilbert A. Churchill, Jr. © The McGraw-Hill J. Paul Peter Companies, Inc., 1998 Marketing Chapter 1 Marketing: Creating Value for Customers Gilbert A. Churchill, Jr. J. Paul Peter Slide 1-1 What is Marketing 1948 AMA 1985 AMA • Marketing is the • Marketing is the process of planning performance of and executing the business activities conception, pricing, directed towards, and promotion, and incident to, the flow of distribution of ideas, goods, and services goods and services to create exchanges from the producer to that satisfy individual consumer or user. and organizational goals. Slide 1-2 Necessary Conditions for Exchange At Least Two Parties Ability to Communicate Offer Exchange Process Freedom to Accept or Reject Desire to Deal With Other Party The interchange of something of value between parties Slide 1-3 Importance of Marketing Distribution Packaging Research and Development Selling Expense Communications Raw Materials and Production Entry level salaries range between $30,000 to $50,000 Slide 1-4 Table 1.1 Major Types of Marketing TYPE DESCRIPTION EXAMPLE Product Marketing designed to create exchange for tangible products Strategies to sell Gateway computers Service Marketing designed to create exchanges for intangible products Strategies by Hertz to rent cars to travelers Person Marketing designed to create favorable actions toward persons Strategies to get votes for Bill Clinton Place Marketing designed to attract people to places Strategies to get people to vacation in Puerto Rico Cause Marketing designed to create support for ideas or issues or to get people to change socially undesirable behaviors Strategies to get people to stop using illicit drugs Organization Marketing designed to attract donors, members, participants or volunteers Strategies to increase membership in the National Rifle Association Slide 1-5 Levels of Marketing Analysis Macromarketing Micromarketing • The study of marketing processes, activities, institutions, and results at a societal level. • The study of marketing processes and activities at organizational, product, or brand levels. – Social responsibility – Business ethics – Product development – Product distribution – Product pricing Slide 1-6 Table 1.1 Marketing Management Philosophies TYPE DESCRIPTION EXAMPLE Production Focus on efficiency of internal operations (not wants and needs) Make the best black car you can and people will buy it Sales Focus on aggressive selling techniques for overcoming customer resistance You don’t like the black car? I’ll throw in a free radio Marketing Focus on satisfying customer needs and wants, long-term profitability, and integrating all organizational functions while achieving organizational objectives. What type of car do you want? Value Focus on developing and delivering superior value to customers as a way to achieve organizational objectives. You will get a 5 year 100,000 mile warranty. This car is better than the one made 3 years ago. Slide 1-7 Figure 1.1 Stakeholders in Marketing Activities at Organizational Activities Govt. Agencies Marketing Activities Slide 1-8 Figure 1.3 Creating Value for Customers Slide 1-9 Figure 1.4 The Consequences of Superior Customer Value Superior Customer Value Customer Satisfaction and Delight Customer Loyalty Long Term Profitable Relationships Slide 1-10 Transactional vs Relationship Marketing Transactional Marketing Relationship Marketing • Strategy that focus on attracting new customers • Strategy that entails forging long-term partnerships with customers – individual isolated exchanges – making the sale – offering value – providing satisfaction Slide 1-11 Figure 1-5 Marketing Management Develop Marketing Plan and Strategies Understanding Customers and Markets Developing Marketing Mix Implement and control Marketing Activities The process of setting marketing goals for an organization and planning, implementing, and controlling strategies to meet them. Slide 1-12 Marketing Plan • • • • • • • • • Executive Summary Introduction Situation Analysis Competitive Analysis Marketing Planning Implementation and Control Summary Appendix References Slide 1-13 Target Market Target Market The portion of a market that an organization attempts to serve with its marketing mix. The group most likely to buy a firm’s product Slide 1-14 Marketing Mix Product Price Four P’s Placement Promotion The strategic tools a firm uses to create value for customers and achieve organizational objectives. Elements created by management to satisfy mutually satisfying exchanges. Slide 1-15 Marketing Mix - Product Product Price Target Market Placement Promotion Something offered by marketers to customers for exchange. It may be a good, service, or an idea. Slide 1-16 Marketing Mix - Price Product Price Target Market Placement Promotion The amount of money or other resources required to exchange for goods and services. Sometimes called rent, fee, tuition, toll, etc. Slide 1-17 Marketing Mix - Placement Product Price Target Market Placement Promotion The channels of distribution used to get products and services to market. Including wholesalers and retailers. Slide 1-18 Marketing Mix - Promotion Product Price Target Market Placement Promotion The personal and impersonal means used to inform, persuade, and remind customers about products and services. This includes advertising, sales promotion, publicity, and personal selling.