Marketing: Managing

Profitable Customer
Relationships

Chapter 1
 What is Marketing?
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”
Marketing is about managing
profitable customer relationships
 Attracting new customers
 Retaining and growing current
customers
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Goal 1: Define marketing and the marketing process.
 The Marketing Process
A Five-Step Process
1. Understand the marketplace and
customer needs and wants
2. Design a customer-driven marketing
strategy
3. Construct a marketing program that
delivers superior value
4. Build profitable relationships and
create customer delight
5. Capture value from customers to
create profits and customer quality

1-3
Goal 1: Define marketing and the marketing process.
Core Marketing Concepts

1-4
 Understanding the
Marketplace
Core Concepts Need
 State of felt deprivation
Needs, wants, and  Example: Need food
demands
Marketing offers: Wants
including products,  The form of needs as
services and shaped by culture and
experiences the individual
Value and satisfaction  Example: Want a Big
Mac
Exchange, transactions
and relationships Demands
Markets  Wants which are backed
by buying power
1-5
Goal 2: Identify the five core marketplace concepts.
 Eight types of demand
Negative Consumers Avoid
Non-existent Unaware
Latent Evolving /New
Declining Falling
Irregular Seasonal
Full Demand = Supply
Overfull Demand > Supply
Unwholesome Undesirable

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 Understanding the
Marketplace
Core Concepts Marketing offer
Needs, wants, and
demands
Marketing offers:
including products,
services and
experiences
Value and satisfaction
Exchange, transactions
and relationships
Markets
 Combination of
products, services,
information or
experiences that
satisfy a need or
want
 Offer may include
services, activities,
people, places,
information or ideas

1-7
Goal 2: Identify the five core marketplace concepts.
 Understanding the
Marketplace
Core Concepts Value
 Customers form
Needs, wants, and expectations regarding
demands value
Marketing offers:  Marketers must deliver
including products, value to consumers
services and
experiences Satisfaction
 A satisfied customer will
Value and satisfaction
buy again and tell others
Exchange, transactions about their good
and relationships experience
Markets

1-8
Goal 2: Identify the five core marketplace concepts.
 Understanding the
Marketplace
Core Concepts Exchange
Needs, wants, and
demands
Marketing offers:
including products,
services and
experiences
Value and satisfaction
Exchange, transactions
and relationships
Markets
 The act of obtaining a
desired object from
someone by offering
something in return
 One exchange is not the
goal, relationships with
several exchanges are
the goal
 Relationships are built
through delivering value
and satisfaction

1-9
Goal 2: Identify the five core marketplace concepts.
 Understanding the
Marketplace
Core Concepts Market
 Set of actual and
Needs, wants, and potential buyers of a
demands product
Marketing offers:  Marketers seek buyers
including products, that are profitable
services and
experiences
Value and satisfaction
Exchange, transactions
and relationships
Markets

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Goal 2: Identify the five core marketplace concepts.
 Elements of a
Modern Marketing System

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 Marketing Management
Marketing management is the art
and science of choosing target
markets and building profitable
relationships with them.
 This definition must include answers
to two questions:
• What customers will we serve?
• How can we serve these customers
best?

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Goal 3: Identify elements of a customer-driven strategy.
 Selecting Customers and
Creating Value
Customer Management
 What customers will we serve?
 Marketers select customers that can be
served profitably
Value Proposition
 How can we serve these customers best?
 Includes the set of benefits or values a
company promises to deliver to consumers
to satisfy their needs

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Goal 3: Identify elements of a customer-driven strategy.
 Marketing Management

Production Management Product

Concept Orientations Concept

Selling Marketing
Concept Concept
Societal
Marketing
Concept
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 Marketing Management
Philosophies
Production Concept •Consumers favor products that are
available and highly affordable.
•Improve production and distribution.

Product Concept •Consumers favor products that offer

the most quality, performance, and
innovative features.

Selling Concept •Consumers will buy products only if

the company promotes/ sells these
products.
Marketing Concept •Focuses on needs/ wants of target
markets & delivering satisfaction
better than competitors.
Societal Marketing Concept
•Focuses on needs/ wants of target 1 - 15
markets & delivering superior value.
The Selling and Marketing
Concepts Contrasted

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 What is Marketing

The process of building profitable

customer relationships by creating
value for customers and capturing
value in return

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