c hapter -12 b uilding c ustomer r elationships t hrough e ffective m arketing dr. gehan...
TRANSCRIPT
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CHAPTER-12
BUILDING CUSTOMER RELATIONSHIPS THROUGH EFFECTIVE MARKETING
Dr. Gehan Shanmuganathan, (DBA)
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APPLE RINGS UP $ 43 BILLION IN ANNUAL REVENUE, SELLING 10 MILLION MACINTOSH COMPUTERS, 8 MILLION IPODS, AND 20 MILLION IPHONES EVERY YEAR
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LEARNING OBJECTIVES
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LEARNING OBJECTIVES
1. Understand the meaning of marketing and the
importance of management of customer relationships.
2. Explain how marketing adds value by creating several
forms of utility.
3. Trace the development of the marketing concept and
understand how it is implemented.
4. Understand what markets are and how they are
classified.
5. Identify the four elements of the marketing mix and be
aware of their importance in developing a marketing
strategy.
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LEARNING OBJECTIVES (CONT’D)
6. Explain how the marketing environment affects
strategic market planning.
7. Understand the major components of a marketing
plan.
8. Describe how market measurement and sales
forecasting are used.
9. Distinguish between a marketing information
system and marketing research.
10. Identify the major steps in the consumer buying
decision process and the sets of factors that may
influence this process.
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WHAT IS MARKETING?
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The activity, set of institutions and processes for
creating, communicating, delivering, and
exchanging offerings that have value for
customers, clients, partners, and society at large
MARKETING
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MANAGING CUSTOMER RELATIONSHIPS
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MANAGING CUSTOMER RELATIONSHIPS
Relationship marketing- establishing long-term,
mutually satisfying buyer-seller relationships
Customer relationship management (CRM)-
using information about customers to create
marketing strategies that develop and sustain
desirable customer relationship
Customer lifetime value- measure of a
customer’s worth (sales minus costs) to business
over one’s life time
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UTILITY: THE VALUE ADDED BY MARKETING
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Utility- the ability of a good or service to satisfy a
human need
Form utility- utility created by converting production
inputs into finished products
Place utility- utility created by making product available
at a location convenient for customer to purchase
Time utility- utility created by making a product
available when customers wish to purchase it
Possession utility- utility created by transferring title
(ownership) of a product to a buyer
UTILITY: THE VALUE ADDED BY MARKETING
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THE MARKETING CONCEPT
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THE MARKETING CONCEPT
A business philosophy that firm should provide
goods and services that satisfy customer’s needs
through a coordinated set of activities that allow
the firm to achieve its objectives
To achieve success, a business must
Talk to its potential customers to assess their
needs
Develop a good or service to satisfy those needs
Continue to seek ways to provide customer
satisfaction
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EVOLUTION OF MARKETING CONCEPT AFTER INDUSTRIAL REVOLUTION
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PRODUCTION CONCEPT
“ The production concept holds that consumers
will favour those products that are widely
available and low in cost. Managers of
production oriented organisations concentrate
on achieving high production efficiency and
wide distribution coverage”.
Companies that follow this concept is called
production oriented
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PRODUCT CONCEPT
“The product concept contends that consumers will
favour those products that offer the most
quality, performance or innovative features.
Managers in these product oriented organisations
focus their energy on making superior products
and improving them over time.”
A company following this concept is called
“Myopic”
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SELLING CONCEPT
“The selling concept holds that consumers, if left
alone, will ordinarily not buy enough of the
organisations products. The organisation must
therefore undertake an aggressive selling and
promotional effort.”
A company following this concept is called sales
oriented
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MARKETING CONCEPT
The marketing concept rests on four pillars
Target market – This is where the marketing effort is directed
towards a chosen market sector.
Customer needs - The marketing activities start with the
customers needs in mind.
Coordinated marketing – This is where a coordinated
effort is put in meeting the requirements of the customers across
various functions of the organisation.
Profitability – The ultimate outcome would be profits for a
business organisation or an excess in terms of effort for non profit
organisations.
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SOCIETAL MARKETING CONCEPT
Societal Marketing is a management process
responsible for identifying, anticipating and
satisfying customer requirements at a profit
in a socially acceptable manner.
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IMPLEMENTING THE MARKETING CONCEPT
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IMPLEMENTING THE MARKETING CONCEPT
Obtain information about present and potential
customers
Their needs; how well those needs are being satisfied;
how products might be improved; customer opinions
about the firm
Pinpoint specific needs and potential customers
toward which to direct marketing activities and
resources
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IMPLEMENTING THE MARKETING CONCEPT (CONT’D)
Mobilize marketing resources to
Provide a product that will satisfy customers
Price the product at an acceptable and profitable
level
Promote the product to potential customers
Ensure distribution for product availability when
and where wanted
Obtain information on the effectiveness of the
marketing effort and modify efforts as necessary
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MARKETS AND THEIR CLASSIFICATION
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MARKETS AND THEIR CLASSIFICATION
Market- group of individuals or organizations,
or both, that need products in a given
category and that have the ability,
willingness, and authority to purchase such
products
Consumer markets (B to C)
Business-to-business (industrial- B to B)
markets
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DEVELOPING MARKETING STRATEGIES
Marketing strategy
Consists of
The selection and analysis of a target market
The creation and maintenance of an
appropriate marketing mix (a combination of
product, price, distribution, and promotion
developed to satisfy a particular target
market)
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DEVELOPING MARKETING STRATEGIES (CONT’D)
Target market selection and evaluation
Target market- a group of individuals or
organizations for which the firm develops and
maintains a marketing mix suitable for the specific
needs and preferences of that group
Market segment- a group of individuals or
organizations within a market that share one more
common characteristics
Market segmentation- the process of dividing a
market into segments
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One Marketing Mix Seg 1Seg 2Seg 3
Marketing Mix 1 Seg 1Seg 2Seg 3
Marketing Mix 2 Marketing Mix 3
One Marketing Mix Seg 1
Undifferentiating
Differentiating
Concentrated
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MARKETING ENVIRONMENT
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DEFINITION OF MARKETING ENVIRONMENT
A company’s marketing environment consists of the actors
and forces external to the marketing management
function of the firm that impinge on the marketing
management’s ability to develop and maintain
successful transaction with its target customers.- Kotler : 2001:42 -
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Marketing Environment
Internal Environment
External Environment
Micro Environment
Macro Environment
Customers, Distributors, Suppliers & Competitors
PESTEEL Factors
5 M’s 7 S’s
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DEVELOPING A MARKETING PLAN
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DEVELOPING A MARKETING PLAN
A written document that specifies an organization’s resources,
objectives, strategy, and implementation and control efforts to
be used in marketing a specific product or product group
Elements of a marketing plan
Executive summary
Environmental analysis
Strengths and weaknesses
Opportunities and threats
Marketing objectives
Marketing strategies
Marketing implementation
Evaluation and control
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MARKET MEASUREMENT AND SALES FORECASTING
Sales forecast- an estimate of the amount of
a product that an organization expects to sell
during a certain period of time based on a
specific level of marketing effort
Importance of measuring sales potential
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MARKETING INFORMATION
Marketing information system- a system for
managing marketing information that is gathered
continually from internal and external sources
Internal data sources
External data sources
Outputs
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MARKETING INFORMATION (CONT’D)
The six steps of marketing research
1. Define the problem
2. Make a preliminary investigation
3. Plan the research
4. Gather factual information
5. Interpret the information
6. Reach a conclusion
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BUYING BEHAVIOR
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TYPES OF BUYING BEHAVIOR
Buying behavior- the decisions and actions of
people involved in buying and using products
Consumer buying behavior- the purchasing of
products for personal or household use, not
for business purposes
Business buying behavior- the purchasing of
products by producers, resellers,
governmental units, and institutions
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BUYING PROCESS
Need Recognition
Identification of Alternatives
Evaluation of Alternatives
Purchase Decision
Post Purchase Evaluation
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WRITE FIVE KEY THINGS (AREAS) THAT YOU CAN CRITICALLY REMEMBER IN TODAY’S DISCUSSION
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WHAT WE DISCUSSED TODAY..
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WHAT WE DISCUSSED TODAY..
1. Understand the meaning of marketing and the
importance of management of customer relationships.
2. Explain how marketing adds value by creating several
forms of utility.
3. Trace the development of the marketing concept and
understand how it is implemented.
4. Understand what markets are and how they are
classified.
5. Identify the four elements of the marketing mix and be
aware of their importance in developing a marketing
strategy.
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WHAT WE DISCUSSED TODAY.. (CONT’D)
6. Explain how the marketing environment affects
strategic market planning.
7. Understand the major components of a marketing
plan.
8. Describe how market measurement and sales
forecasting are used.
9. Distinguish between a marketing information
system and marketing research.
10. Identify the major steps in the consumer buying
decision process and the sets of factors that may
influence this process.