Marketing strategy and customer relationships. An overview of strategic marketing

able to define marketing as focused on customers
To identify some important marketing terms, including target market, marketing mix, marketing exchanges, and marketing environment
To become aware of the marketing concept and marketing orientation

understand the importance of building customer relationships
To learn about the process of marketing management
To recognize the role of marketing in our society

Marketing
Understanding the Marketing Concept
Managing Customer Relationships
Value-Driven Marketing
Marketing Management
The Importance of Marketing in Our Global Economy

marketing
Financial success depends on marketing ability
Finance, operations, accounting, design, etc. will not really matter if there is not sufficient demand for products and services

process of creating, distributing, promoting, and pricing goods, services, and ideas to facilitate satisfying exchange relationships with customers in a dynamic environment
Meeting needs profitably
Should result in a customer who is ready to buy

needs
Ebay
IKEA
Google

decisions
What features to design into a product
What prices to offer customers
Where to sell products
How much to spend on advertising
Wording on packaging
Design of packaging

person can obtain a product in one of four ways:
Self produce
Steal
Beg
purchase

purchasers of organizations’ products; the focal point of all marketing activities

Strategic Marketing

FIGURE 1.1

on Customers

Target Market
A specific group of customers on whom an organization focuses its marketing efforts
Large or small customer groups
Single or multiple product markets
Single or multiple products
Local to global markets

with Products, Distribution, Promotion, and Price

The Marketing Mix
Four marketing activities—product, distribution, promotion, and pricing—that a firm can control to meet the needs of customers within its target market

Variables

Product

Distribution

Promotion

Pricing

Goods, services, or ideas that satisfy customer needs

The ready, convenient, and timely availability of products

Activities that inform customers about the organization and its products

Decisions and actions that establish pricing objectives and policies and set product prices

Satisfying Exchange Relationships

Exchange
The provision or transfer of goods, services, or ideas in return for something of value

Satisfying Exchange Relationships (cont’d)

Exchange Conditions
Two or more participants have something of value that the other party desires.
Exchange provides mutual benefit/satisfaction.
Each party has confidence in the exchange value of the other party’s offering.
Each party must meet the expectations of the exchange to become trusted by the other parties.

Satisfying Exchange Relationships (cont’d)

Exchange forms
Business firm wants purchases
Political candidate wants votes
Church wants active members
Social-action group wants passionate adoption of some cause

in a Dynamic Environment

Marketing Concept
A philosophy that an organization should try to satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals
Against the “selling concept”, which focuses on the needs of the seller

in a Dynamic Environment

Marketing Concept
Customer satisfaction
Analysis of customers’ current and long-term needs
Analysis of competitors’ capabilities
Integration of firm’s resources

the Marketing Concept

Product Orientation

Sales Orientation

Marketing Orientation

Late 19th century: efficient production of goods allowed firms to meet strong customer demand.

Mid-1920s–early 1950s: weakened demand required that products would have to be “sold.” (personal selling, advertising, and distribution was the focus)

Early 1950s–2000s: adopting a customer focus means a commitment to researching and responding to customer needs.

Marketing Concept

Becoming marketing oriented requires
Establishing an information system to discover customers’ needs and using the information to create satisfying products.
Coordinating all marketing activities by restructuring the organization.
Obtaining the support of all managerial and staff levels in the organization.

Relationships

Relationship Marketing
Establishing long-term, mutually satisfying buyer-seller relationships allowing for cooperation and mutual dependency
Increased value of customer (loyalty) over time results in increased profitability.

Relationships (cont’d)

Customer Relationship Management (CRM)
Using information about customers to create marketing strategies that develop and sustain desirable customer relationships
Identifying buying-behavior patterns of customers
Using behavioral information to focus on the most profitable customers

customer’s subjective assessment of benefits relative to the costs in determining the worth of a product
Customer value = customer benefits – customer costs
Customer benefits
Anything desired by the customer that is received in an exchange
Customer costs
Anything a customer gives up in an exchange for benefits
Monetary price of the benefit
Search costs (time and effort) to locate the product
Risks associated with the exchange

Management
The process of planning, organizing, implementing, and controlling marketing activities to facilitate exchanges effectively and efficiently
Effectiveness
The degree to which an exchange helps an organization achieve its objectives
Efficiency
The process of minimizing the resources an organization must spend to achieve a specific level of desired exchanges

(cont’d)

Planning
Assessing opportunities and resources
Determining marketing objectives
Developing a marketing strategy and plans for implementation and control
How, when and by whom are marketing activities performed?
Organizing
Developing the internal structure of the marketing unit
Functions, products, regions, customer types

(cont’d)

Implementation
Coordinating marketing activities
Motivating marketing personnel
Developing effective internal communications within the unit
Control
Establishing performance standards
Comparing actual performance to established standards
Reducing the difference between desired and actual performance

Control Process

Provides for quick detection of differences in planned and actual performance
Accurately monitors activities and is flexible enough to accommodate changes
Incurs low process costs relative to the costs of a “no-control” situation
Is understandable by both managers and subordinates.

of Marketing in Our Global Economy

Marketing costs consume a sizable portion of buyers’ dollars
Marketing is used in nonprofit organizations
Marketing is important to business and the economy
Marketing fuels our global economy

of Marketing in Our Global Economy (cont’d)

Marketing knowledge enhances consumer awareness
Marketing connects people through technology
Socially responsible marketing can promote the welfare of customers and society
Marketing offers many exciting career prospects

this chapter you should:

Be able to define marketing as focused on customers.
Know the meaning of important marketing terms, including target market, marketing mix, marketing exchanges, and marketing environment.
Be more aware of the marketing concept and marketing orientation.