Introduction 01

to Marketing

Marketing – Managing Profitable

Customer Relationships

Dr. Michael Harker

 Reading

 Armstrong, G., Kotler, P., Harker, M.J. and

Brennan, R. (2009) Marketing: An
Introduction 1e Pearson Prentice-Hall
 Chapter 1

© Pearson Education 2009

 Lecture Outline
 UEFA
 Expert marketers?
 What is Marketing?
 Many answers, mostly unhelpful
 Perspective, profession, process
 A Simple Model of the Marketing Process
 Elements in a modern marketing system
 Marketing concept and market orientation
 The New Marketing Landscape
 An expanded model of the marketing process
 Technology, globalisation and the extended domain of
marketing

© Pearson Education 2009

 UEFA – Expert Marketers?
Competition strategy
Public relations Broadcasting rights –
Marketing and
Media Rights prices, terms and
Social marketing
conditions
programme
management

Marketing &
Communications
Media
and Public Affairs
Management

Multimedia content for Sponsorships,

partners licensing deals and
Media merchandise
Management of online Technologies SA

presence

© Pearson Education 2009

 So What is Marketing all
About Then?

6
 Many Answers
 Definitions of Marketing
 The Marketing Concept
 Marketing as a Business Orientation
 Marketing as the ‘Integrating Function’
 Marketing as a Profession
 Marketing as a Process

© Pearson Education 2009

 Definitions of Marketing
“The process of planning and executing the conception, pricing,
promotion, and distribution of goods, services, and ideas to AMA, 1964
create exchanges that satisfy individual and organisational
objectives”

“Marketing is an organizational function and a set of

processes for creating, communicating, and delivering AMA, 2004
value to customers and for managing customer relationships in
ways that benefit the organization and its stakeholders”

“The process by which companies create value for

customers and build strong customer relationships in AKHB, 2009
order to capture value from customers in return”
http://www.marketingpower.com/mg-dictionary-view1862.php?
© Pearson Education 2009
The Integrating Function
Production

HRM Marketing Finance

R&D

© Pearson Education 2009

Marketing as a Profession
 AMA
 American Marketing Association
 http://www.marketingpower.com/
 CIM
 Chartered Institute of Marketing
 http://www.cim.co.uk/cim/index.cfm
 The Many Types of Marketer
 Market Research
 Brand Manager
 Logistics
 Sales
 Advertising
© Pearson Education 2009
 A Simple Model of the
Marketing Process

Understand the Construct a Build profitable Capture value

Design a
marketplace and programme that relationships and from customers to
customer-driven
customer needs delivers superior create customer create profits and
marketing strategy
and wants value delight customer equity

© Pearson Education 2009

 Understanding the Marketplace
and Customer Needs
 Customer Needs, Wants and Demands
 Needs – states of felt deprivation
 Wants – needs shaped by culture and personality
 Demand – wants backed by buying power
 Market Offerings
 Combinations of products and services
 Also information and experiences?
 Customer Value and Satisfaction
 Customer perceptions and expectations – pre and post
 Exchanges and Relationships
 One-off transaction Vs multiple interactions over time
 Markets
 The set of actual and potential buyers – shared common need
© Pearson Education 2009
 Elements of a Modern
Marketing System

Company
[Marketers]
Marketing Final
Suppliers Intermediaries Users
Competitors

Major environmental forces

© Pearson Education 2009

 Designing a Customer-
Driven Marketing Strategy
 Selecting Customers to Serve
 Trying to serve all customers may mean that no
customer is served well
 Segmenting markets, targeting segments
 Choosing a Value Proposition
 The set of benefits and values it will deliver to
customers
 Must differentiate and position the company in the
marketplace
 Managing Marketing Orientations
 Production Vs product Vs selling Vs marketing
© Pearson Education 2009
 The Marketing Concept
The • Focus is on production and
distribution efficiency
‘The marketing Production • Own operations become
management Concept obsession

philosophy that holds

• Focus is on continuous
that achieving The Product product improvement
• Ignores changing markets
organisational goals Concept and environments
depends on knowing
the needs and want • Focus is on finding and
The Selling converting prospects
of target markets and Concept • Emphasis is on transactions,
not relationships
delivering the desired
satisfactions better
The • Focus is on the customer
than the competitors • Goal is understanding the
Marketing needs and wants of
do’ Concept customers

© Pearson Education 2009

 The Selling and Marketing
Concepts Contrasted
Starting
Focus Means Ends
point

Profits
The selling Factory
Existing Selling and through
concept products promoting sales
volume

The Profits
Customer Integrated through
marketing Market
needs marketing customer
concept satisfaction

© Pearson Education 2009

The Societal Marketing
Concept

Society
[Human
welfare]

Societal
marketing
concept
Consumers
[Want
Company
[Profits]
satisfaction]

© Pearson Education 2009

Preparing a Marketing Plan
and Programme
The 4Ps - a gross over-
simplification of what
marketing is about
Product
• Need-satisfying?

Price
• How much?

Place
• How made available?

Promotion
• How communicated?

© Pearson Education 2009

 Building Customer
Relationships -
 Customer Relationship Management
 The overall process of building and maintaining profitable
customer relationships by delivering superior customer value
and satisfaction
 Relationship Building Blocks
 Customer Value – evaluation and perception of offer
 Customer Satisfaction – does performance meet or exceed
expectation?
 Customer Relationship Levels and Tools
 Stranger, acquaintance, friend, partner?
 Brands, clubs and cards
© Pearson Education 2009
The Changing Nature of
Customer Relationships

Relating
With more
carefully For the
Directly
selected long-term
customers

© Pearson Education 2009

 Capturing Value from
Customers
 Creating Customer Loyalty and Retention
 The concept of customer lifetime value
 Get customers, then keep them
 Growing Share of Customer
 The portion of a customer’s purchasing that a
company gets
 Building Customer Equity
 The combined customer lifetime values of all the
company’s customers

© Pearson Education 2009

 Customer Relationship
Groups

Butterflies True Friends

High Good fit between company’s Good fit between company’s
profitability offerings and customers needs; offerings and customers
high profit potential needs; highest profit potential
Potential
profitability
Strangers Barnacles
Low
Little fit between Limited fit between
profitability company’s offerings and company’s offerings and
customer’s needs; lowest customer’s needs; low profit
profit potential potential

Short-term customers Long-term customers

Projected loyalty

© Pearson Education 2009

 An Expanded Model of the
Marketing Process
Understand the Construct a Build profitable Capture value from
Design a
marketplace and programme that relationships and customers to create
customer-driven
customer needs delivers superior create customer profits and
marketing strategy
and wants value delight customer equity

Research Select customers Product and service Customer Create satisfied,

customers and the to serve: market design: build strong relationship loyal customers
marketplace segmentation and brands management:
targeting build strong
Manage marketing Capture customer
Pricing: create real relationships with
information and lifetime value
Decide on a value value chosen customers
customer data
proposition:
differentiation and Distribution: Partner Increased share of
positioning manage demand relationship market and share
and supply chains management: of customer
build strong
Promotion: relationships with
communicate the marketing partners
value proposition

Harness marketing Manage global Ensure ethical and

technology markets social responsibility

© Pearson Education 2009

 The New Marketing
Landscape

Ethics and
Rapid Not-for-Profit
The Digital Age Social
Globalisation Marketing
Responsibility

St. Paul’s Marketing

VSO
Cathedral Birmingham

© Pearson Education 2009

Bringing it all Together

© Pearson Education 2009

Next Lecture

Company and Marketing

Strategy