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CREATING CUSTOMER

RELATIONSHIPS AND VALUE

THROUGH MARKETING

CHAPTER

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AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:

1. Define marketing and identify the requirements for marketing to occur.

2. Explain how marketing discovers and satisfies consumer needs.

3. Distinguish between marketing mix elements and environmental factors.

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AFTER READING THIS CHAPTERYOU SHOULD BE ABLE TO:

4. Explain how organizations build strong relationships and customer value through marketing.

5. Describe how today’s customer era differs from prior eras oriented to production and selling.

6. Explain how marketing creates utilities for consumers.

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AERO? THE NEXT ACT AFTER LAUNCHING AN INDUSTRY?

• A New Idea ThatWasn’t So New

• Understandingthe Consumer

• Success InvitesImitation, WhichStimulatesInnovation

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WHAT IS MARKETING?

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• Marketing: Using Exchanges to Satisfy Needs

Marketing

Exchange

• Rollerblade Skates, Marketing, and You

• The Diverse Factors Influencing Marketing Activities

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WHAT IS MARKETING?

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• Requirements for Marketing to Occur

Two or More Parties with Unsatisfied Needs

Desire and Ability to Satisfy These Needs

A Way for the Parties to Communicate

Something to Exchange

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HOW MARKETING DISCOVERS AND SATISFIES CONSUMER NEEDS

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• Discovering Consumer Needs

The Challenge of Meeting Consumer NeedsWith New Products

Consumer Needs and Consumer Wants

What a Market Is

• “Focus on the consumer benefit”

• “Learn from the past”

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FIGURE 1-4FIGURE 1-4 Marketing’s first task: discovering consumer needs

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• Satisfying Consumer Needs

The Four P’s: Controllable Marketing MixFactors

Target Market

• Product • Promotion• Price • Place

The Uncontrollable, Environmental Factors

HOW MARKETING DISCOVERS AND SATISFIES CONSUMER NEEDS

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FIGURE 1-AFIGURE 1-A Summary of factors that affect an organization’s marketing program

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THE MARKETING PROGRAM:HOW CUSTOMER RELATIONSHIPS

ARE BUILT

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• Relationship Marketing:

Difficult to Implement

Easy to Understand

• The Marketing Program

• Global Competition, Customer Value, and Customer Relationships

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FIGURE 1-5FIGURE 1-5 Marketing’s second task: satisfying consumer needs

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• A Marketing Program for Rollerblade

Listening to Consumers to Stay Aheadof the Trends

Focusing the Marketing Program on FourKey Segments

Exploiting Strengths in Technology

THE MARKETING PROGRAM:HOW CUSTOMER RELATIONSHIPS

ARE BUILT

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FIGURE 1-6FIGURE 1-6 Marketing programs for two of Rollerblade’s skates, targeted at two distinctly different customer segments: fitness/recreational skaters and children

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HOW MARKETING BECAMESO IMPORTANT

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• Evolution of the Market Orientation

Production Era

Customer Era

Sales Era

Marketing Concept Era

• Market Orientation

• Customer Relationship Management (CRM)

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FIGURE 1-7FIGURE 1-7 Four different orientations in the history of American business

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• Societal Marketing Concept

• Ethics and Social Responsibility: Balancing the Interests of Different Groups

Ethics

Social Responsibility

• Macromarketing

• Micromarketing

HOW MARKETING BECAMESO IMPORTANT

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• The Breadth and Depth of Marketing

Who Markets?

What Is Marketed?

• Goods • Services

Who Buys and Uses What Is Marketed?

• Ultimate Consumers

• Organizational Buyers

HOW MARKETING BECAMESO IMPORTANT

• Ideas

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• The Breadth and Depth of Marketing

Who Benefits?

How Do Consumers Benefit?

• Utility

Form Utility

Place Utility

Time Utility

Possession Utility

HOW MARKETING BECAMESO IMPORTANT

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FIGURE 1-BFIGURE 1-B How Rollerblade’s marketing mix actions today differ from those in 1986

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ROLLERBLADE: BENEFITS BEYOND EXPECTATIONS

VIDEO CASE 1

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VIDEO CASE 1Rollerblade

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VIDEO CASE 1Rollerblade

1. What trends in the environmental forces (social, economic, technological, competitive, and regulatory) identified in Figure 1-3in the chapter (a) work for and(b) work against Rollerblade’s potential growth in the 21st century?

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VIDEO CASE 1Rollerblade

2. Compare the marketing goals for Rollerblade (a) in 1986 when Rollerblade was launched and(b) today?

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VIDEO CASE 1Rollerblade

3. What kind of focused communication and promotion actions might Rollerblade take to reach the(a) recreational and (b) children market segments? For some starting ideas, visit rollerblade.com.

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VIDEO CASE 1Rollerblade

4. In searching for global markets to enter, (a) what are some criteriathat Rollerblade should use toselect countries to enter, and(b) what three or four countriesmeet these criteria best and are the most likely candidates?

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Marketing

AMA Definition of Marketing

Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.

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Exchange is the trade of things of value between buyer and seller so that each is better off after the trade.

Exchange is the trade of things of value between buyer and seller so that each is better off after the trade.

Exchange

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A market consists of people with both the desire and ability to buy a specific product.

A market consists of people with both the desire and ability to buy a specific product.

Market

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The target market consists of one or more specific groups of potential customers toward which an organization directs its marketing program.

The target market consists of one or more specific groups of potential customers toward which an organization directs its marketing program.

Target Market

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The marketing mix consists ofthe marketing manager’s controllable factors—product, price, promotion, and place (the 4Ps)—that can be used to solve a marketing problem.

The marketing mix consists ofthe marketing manager’s controllable factors—product, price, promotion, and place (the 4Ps)—that can be used to solve a marketing problem.

Marketing Mix

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Environmental factors are the uncontrollable factors involving social, economic, technological, competitive, and regulatory forces.

Environmental factors are the uncontrollable factors involving social, economic, technological, competitive, and regulatory forces.

Environmental Factors

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Customer value is the unique combination of benefits received by targeted buyers that includes quality, price, convenience, on-time delivery, and both before-sale and after-sale service.

Customer value is the unique combination of benefits received by targeted buyers that includes quality, price, convenience, on-time delivery, and both before-sale and after-sale service.

Customer Value

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Relationship marketing links the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefits.

Relationship marketing links the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefits.

Relationship Marketing

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A marketing program is a plan that integrates the marketing mix to providea good, service, or idea to prospective buyers.

A marketing program is a plan that integrates the marketing mix to providea good, service, or idea to prospective buyers.

Marketing Program

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The marketing concept is the idea that an organization should (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization’s goals.

The marketing concept is the idea that an organization should (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization’s goals.

Marketing Concept

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An organization that has a market orientation focuses its efforts on(1) continuously collecting information about customers’ needs, (2) sharing this information across departments, and(3) using it to create customer value.

An organization that has a market orientation focuses its efforts on(1) continuously collecting information about customers’ needs, (2) sharing this information across departments, and(3) using it to create customer value.

Market Orientation

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Customer relationship management (CRM) is the process of identifying prospective buyers, understanding them intimately, and developing favorable long-term perceptions of the organization and its offerings so that buyers will choose them in the marketplace.

Customer relationship management (CRM) is the process of identifying prospective buyers, understanding them intimately, and developing favorable long-term perceptions of the organization and its offerings so that buyers will choose them in the marketplace.

Customer Relationship Management (CRM)

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The societal marketing concept is the view that an organization should satisfy the needs of consumers in a way that provides for society’s well-being.

The societal marketing concept is the view that an organization should satisfy the needs of consumers in a way that provides for society’s well-being.

Societal Marketing Concept

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Macromarketing is the study of the aggregate flow of a nation’s goods and services to benefit society.

Macromarketing is the study of the aggregate flow of a nation’s goods and services to benefit society.

Macromarketing

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Micromarketing is how an individual organization directs its marketing activities and allocates its resources to benefit its customers.

Micromarketing is how an individual organization directs its marketing activities and allocates its resources to benefit its customers.

Micromarketing

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Ultimate consumers are the people who use the goods and services purchased for a household.

Ultimate consumers are the people who use the goods and services purchased for a household.

Ultimate Consumers

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Organizational buyers are those manufacturers, wholesalers, retailers,and government agencies that buy goods and services for their own use or for resale.

Organizational buyers are those manufacturers, wholesalers, retailers,and government agencies that buy goods and services for their own use or for resale.

Organizational Buyers

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Utility is the benefits or customer value received by users of the product.Utility is the benefits or customer value received by users of the product.

Utility