Marketing:

Managing Profitable
Customer Relationships

Chapter 1

Updated by lina 3 july 2008

 Marketing Defined
“Marketing is a social and managerial process by
which individuals and groups obtain what they
need and want through creating and exchanging
value with others”

Keywords:
-creating & exchanging value with others.
-not only telling and selling but the sense of
satisfying customer needs.

Updated by lina 3 july 2008

• Marketing is about managing profitable customer
relationships
Attracting new customers
Retaining and growing current customers

• Marketing is set of activities and processes that include

selling, advertising, market research, internet/e-commerce,
public relations and etc.

Updated by lina 3 july 2008

 Questions
 Identify major marketing campaigns. What brands are
being launched recently? What are the advertisement
saying?
 Be aware of new trends and technologies. Keep a lookout
for “marketing wars”. Give example.

Updated by lina 3 july 2008

 Need, Wants and Demands

Marketing offers

Value and Satisfaction

Exchange, transaction and relationship

Markets
Updated by lina 3 july 2008
 Core Marketing Concepts
Need
State of felt deprivation
Not created by marketer-it is basic part of human life
Example: Need food, cloth, safety
Wants
The form of needs as shaped by culture and the individual
Example: Want a Big Mac, Pagoda T-shirt, ING insurance
Demands
Wants which are backed by buying power
Given their wants & resources, people demand product with
benefits that add up to the most value and satisfaction
Example: Burger King vs Ramly Burger, MNG vs Petaling Street
cloth, ING insurance vs Etiqa.

Updated by lina 3 july 2008

Marketing offers
Combination of products, services, information or experiences that
satisfy a need or want
Keywords: Offer may include services, organization (build brand
name), people/person (celebrities, politician), places (Australia
adventures) , information or ideas (anti-smoking, drugs prevention)
Value and Satisfaction
Marketers must deliver value to consumers
Customers form expectations about the value of various marketing
offers
A satisfied customer will buy again and tell others about their good
experience, dissatisfied customer will tell about she/he experiences
to 11 person.
dissatisfied, satisfied and delighted customer.

Updated by lina 3 july 2008

Exchange, transaction and relationship
Exchange is the act of obtaining a desired object from someone by
offering something in return
Transactions consists of a trade of values between two parties
Relationships are built through delivering value and satisfaction
Keywords: relationships with exchanges are the goal and how you
delivering value and satisfaction.
Market
Set of actual and potential buyers of a product
Marketers seek buyers that are profitable, the marketers try to
fulfill customers’ needs and wants.

Updated by lina 3 july 2008

 Marketing Management

Marketing management is the art and science of

choosing target markets and building profitable
relationships with them.
Keywords:
• What customers will we serve?
-based on segmentation and target marketing
• How can we serve these customers best?
-how you want to differentiate or position your
product in the marketplace.

Updated by lina 3 july 2008

 Marketing Orientations

Production concept
Consumer: will favor products that available and highly
affordable.
Management: focus on improving production/distribution
efficiency.
This concept will occur if product exceeds the supply:
management should look for ways to increase production.
Example: mineral water, national cars

Updated by lina 3 july 2008

Product concept
Consumer: will favor products that offer the most quality,
performance and innovative features.
Marketing strategies: making continuous product improvements.
Ex: shampoo, mousetraps, cameras, handphones

Selling concept
Consumer: will not buy enough of firm’s product unless
undertakes large-scale selling or more promotion effort
Practiced with unsought goods-insurance, blood donation-buyers
do not normally think of buying/using,
Marketing strategies:if the company faces overcapacity, aim to sell
what they make rather than the market wants.
From factory existing product selling/promoting profits through
sales volume

Updated by lina 3 july 2008

Marketing concept
Company goal: on knowing the needs/wants of target markets and
delivering the desired satisfaction better than competitor’s do.
From market customer needs integrated marketing profits through
customer satisfaction

The Societal-Marketing concept

See the conflicts between consumer short run wants and consumer
long run welfare.
Ex: McDonalds-the company should balance the 3 consideration
in marketing strategies: company profit, consumer wants and
society interests.
Stress the honesty, integrity and putting the people (consumer
first) before gain the profit

Updated by lina 3 july 2008

 The Marketing Mix
8P’s of marketing mix
Set of controllable tactical marketing tools
Marketing tools that the firm uses to pursue its marketing
objectives in the target market

Product
-goods and services (combination) the company offers to
the target markets
-product variation, quality, design, features, brand name

Updated by lina 3 july 2008

 Price
-the amount of money customers have to pay to obtain the
product
-list price, discount, allowances

Place
-company activities that make the product available to target
consumers
-channels, locations, coverage

Promotion
-activities that communicate the merits of the product and
persuade target customers to buy it
Updated by lina 3 july 2008
 People
-consumers must be educated in order for their expectations of the
product/service to be managed and employees must be motivated and
well trained in order to ensure that high standards of service are
maintained

Process (Proximity)
-as the success of the service is dependent on the total customer
experience a well designed

Physical Aspect
-appearance of the delivery location and the elements provided to
make the service more tangible can enhance the experience. Great
atmosphere, constant reminders of the firm’s corporate identity help to
build customer awareness and loyalty

Updated by lina 3 july 2008

 Protection
-patent (patent holder legal monopoly status), copyright, trademark-
work, symbol or device)

Updated by lina 3 july 2008

 Building Customer Relationships
CRM – Customer Relationship Management: the overall process of
building and maintaining profitable customer relationships by
delivering superior customer value and satisfaction.
Keywords: It deals with all aspects of acquiring, keeping and growing
customers.
3 approaches: financial benefits, social benefits and structural ties

Updated by lina 3 july 2008

 Marketing Challenges
Digital age
Growth of the Internet
Advances in telecommunications, information, transportation
Customer research and tracking
Product development
Distribution
New advertising tools-Internet, E-Commerce
24/7 marketing through the Internet
Globalization
Geographical and cultural distances have shrunk-borderless
Greater market coverage
More options for purchasing and manufacturing
Increased competition from foreign competitors-pros & cons for SME

Updated by lina 3 july 2008

Ethics and social responsibility
Marketers need to take great responsibility for the impact of their
actions
Keywords: seek profit by serving the best long run interest of their
customers and communities
Not-for-profit marketing
Many organizations are realizing the importance of strategic
marketing. Example: Performing arts (museum, orchestras),
Government agencies, Colleges,Hospitals, Churches
Marketing relationships
Profits through managing long-term customer equity
Improve customer knowledge-for your latest product
Target profitable customers
Keep profitable customers
Keywords: retain and maintain the customer relationship

Updated by lina 3 july 2008