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Marketing: Managing ProfitableCustomer Relationships

Principles of Marketing: 6th Canadian Edition

Introduction to KK-BSM

Mia T.D. Indriani MS.c
http://www.pearsoned.ca/kotler/


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Kotlers social definition:

Marketing is a societal process bywhich individuals and groupsobtain what they need and wantthrough creating, offering, and

freely exchanging products andservices of value with others.

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The AMA managerial definition:

Marketing is the process ofplanning and executing the

conception, pricing, promotion,and distribution of ideas, goods,and services to create exchanges

that satisfy individual andorganizational objectives.

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4 Types of Markets

Consumer Markets

Business Markets

Global Markets

Nonprofit andGovernmental

Markets

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Core Marketing Concepts Target markets and

market segmentation

Marketplace, market-space, metamarkets

Marketers & prospects

Needs, wants,

demands Product offering and

brand

Value and satisfaction

Exchange andtransactions

Relationship andnetworks

Marketing channels

Supply chain

Competition Marketing

environment

Marketing program

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Core Marketing Concepts

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Needs, Wants, and Demands

Marketing: The managing of profitable relationships

Satisfying customer needs

Needs: Felt deprivation

Wants: Form of needs shaped

by culture andpersonality

Demands: Wants backed by

buying power

Principles of Marketing:

6th Canadian

Edition

1.7

Figure 1.1


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Value and Satisfaction

Value: Benefits gained versus costs of obtaining product

Satisfaction: Degree of meeting consumers expectations

Exchange: Trade of value

between parties

Transaction: Two things of value

Agreed-uponconditions

Time/place ofagreement


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Marketing Management

Market: Set of actual or potential buyers

Marketing management: Choosing target markets

Building profitable relationships with them

Demarketing: Reduce, not

destroydemand

Temporarily orpermanently


6th Canadian

Edition

1.9

Figure 1.2


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Marketing ManagementOrientations

Production concept

Product concept

Selling concept

Marketing

concept


6th Canadian

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1.10

Figure 1.3


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Societal Marketing Concept

Societal marketing concept: Determine needs/wants of target markets

Deliver desired satisfactions

More efficiently andeffectively

Maintain or improveconsumers andsocietys well-being


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Figure 1.4


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Customer Satisfaction andLoyalty

Customer __________ Relationship management

Lifetime value

Perceivedvalue

Satisfaction Loyalty and

retention

Equity


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Figure 1.5


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Todays Marketing Connections

The Internet

One to one marketing Selective relationship

management

Increase share of

customer Partner relationship

management

Supply chainmanagement

Strategic alliances


6th Canadian

Edition

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Figure 1.6


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Marketing Connections in Transition

Old marketingthinking:

Sales/product centered

Practice mass marketing

Focus on product/sales

Make sales to customers

Get new customers

Grow share of market

Serve any customer

Use mass media

Standardized products

Sales/marketing responsiblefor customersatisfaction/value

Go it alone

Market locally

Profit responsibility

Corporations

Use marketplaces

New marketing thinking: Market/customer centered

Selected market segments Focus on customer satisfaction/value

Develop customer relationships

Keep old customers

Grow share of customer

Serve profitable customers

Connect with customers directly

Customized products Enlist all departments to deliver

customer satisfaction/value

Partner with others

Market locally and globally

Social/environmental responsibility

Non-profits

Use marketspaces


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Generic Business Strategies

Differentiation strategyThese firms aim to serve broad segment of

market by offering products/services thatare perceived as unique.

Likely to work best with products/services thatlend themselves well to differentiation. Even commodities can be differentiated: Morton

salt.


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Differentiation strategy (cont.) It is theperception of differences that is

most important -- not just the actualcharacteristics of competing products.Customer perceptions can be fragile and

short-lived.

Firms must develop strong marketingcapabilities and a reputation for quality or

uniqueness.


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Firms pursuing differentiation must alsoenhance their: Creativity and research capabilities;

Coordination among R&D, marketing, andmanufacturing; and

Ability to attract highly skilled labor,scientists, or creative people.

Value-chain analysis is helpful.


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18

Basic Model ofStrategic Management

Four Basic Elements


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Ronaldo ParenteChapter 1

Wheelen & Hunger 10ed

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1. Environmental Scanning

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