CHAPTER 1

Fundamentals of (FBTM1013)

Managing Profitable Customer Relationships

What image comes to mind when you hear the word Marketing? Marketing? Telling & Selling
YES NO

Your Answer

NO
why
your responses vary based on personal experiences and opinions

then What is Marketing

Simple Definition:
Marketing is managing profitable customer relationships.

How? By accomplishing the following:

Attracting NEW customers by promising superior value. KEEPING and GROWING current customers by delivering satisfaction.

Marketing Defined
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.
Old View: Telling and Selling New View: Satisfying Needs

Many Things Can Be Marketed Goods Services Experiences Events Persons Places Properties Organizations Information / Ideas

What is not marketing Manufacturing Finance HR

Who markets

Everyone profit firm/organizations IBM & BMW non profit firm/organizations - UTAR

Marketing In Malaysia

Previewing The Concepts

Chapter Objectives
1. 2. 3. 4. Define marketing and outline the steps in the marketing process. process. Understand consumers and identify the five core marketplace concepts. Identify the marketing strategy and discuss the marketing management orientations that guide marketing strategy. Discuss customer relationship management and strategies for creating value for customers and capturing value from customers in return.

Figure 1-1 1A Simple Five Step Model of the Marketing Process

1. Understand The Marketplace And Customer Needs And Wants. 2. Design A Customer - Driven Marketing Strategy. Strategy. 3. Construct A Marketing Program That Delivers Superior Value. Value. 4. Build Profitable Relationships And Create Customer Delight. Delight. Quality. 5. Capture Value From Customers To Create Profits And Customer Quality.

Understand The Marketplace And Customer Needs And Wants

a) Companies must first understand what the customer needs and wants, as well as the marketplace in which they operate. Five core marketplace concepts are reviewed in this section: 1. Needs, wants, and demands; 2. Marketing offers (products, services, and experiences); 3. Value and satisfaction; 4. Exchanges, transactions, and relationships; and 5. Markets.

b)

Design A Customer - Driven Marketing Strategy

Designing a winning marketing strategy requires answers to the following questions: 1. What customers will we serve? What is our target market? 2. How can we best serve these customers? What is our value proposition? The company must decide whom it will serve by dividing the market into segments of customers (market segmentation) and selecting which segments to serve (target marketing). A companys value proposition is the set of benefits or values it promises to deliver; these value propositions differentiate one brand from another. Marketing Management Orientations - There are five alternative philosophies production concept product concept marketing concept selling concept societal marketing concept

Construct A Marketing Program That Delivers Superior Value

a. b. c. Guided by that strategy, marketing programs are developed to deliver value to the target customers. The marketing mix is the set of tools the company uses to implement the strategy. The marketing tools are classified into four categories, called the four Ps of marketing: product, price, place, and promotion.

Marketing Mix Variables Product Place Promotion Pricing

Build Profitable Relationships And Create Customer Delight The fourth and most important step is building profitable customer relationships. The process of building and relationships. maintaining profitable customer relationships by delivering superior customer value and satisfaction. Relationships can be built at many levels using a Customer Satisfaction: Perceived Value: variety of tools The customer the product of the difference customer Dependent ons evaluations perceived product Selective relationship management is key between all relative to buyer the performancethe benefitsaand alls costs of a buyer marketing marketing Direct offer relative to those of competing expectations. Dont promise more than the Don offers. Creating long-term profitable relationships with longproduct can deliver! customers is the goal

1. 2.

3.

4.

Partner Relationship Marketing Companies work with many partners and engage in partner relationship management. Inside the company, every functional area could interact with customers ; no longer is the marketing department solely responsible for understanding customers. Many companies are forming crosscrossfunctional selling teams, which can consist of sales teams, and marketing people, operations specialists, financial analysts, and more. Outside the firm, the company may deal with distributors, retailers, and others. The supply chain others. stretches from raw materials to components to final products that are carried to final buyers. Connections must also be made with the members of the supply chain. chain.

Capture Value From Customers To Create Profits And Customer Quality

a. In the last step in the marketing process, the company captures value from the customer. b. Satisfied customers stay loyal and buy more, which means greater long-run returns for the company. longc. Superior customer value results in:

Creating Customer Loyalty and Retention Growing Share of Customer Building Customer Equity

So, What Is Marketing ? 1. Marketing is the process of building profitable customer relationships by creating value for customers and capturing value in return. The first four steps are focused on creating value for the customer, while the last step returns value from the customer to the company. After the marketing strategy is defined, the marketing program is developed, which consists of the four Ps. When building value for customers, companies must utilize marketing technology, go global in both selling and sourcing, and act in an ethical and socially responsible way.

2.

3. 4.

Thank You