1 CustomerDriven Strategic Marketing 2 Planning Implementing and Evaluating Marketing Strategies 3 The Marketing Environment Social Responsibility and Ethics Chapter 1 CustomerDriven Strategic Marketing ID: 731544
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Slide1
Part 1STRATEGIC MARKETING AND ITS ENVIRONMENTSlide2
1: Customer-Driven Strategic Marketing2: Planning, Implementing, and Evaluating Marketing
Strategies
3:
The Marketing Environment, Social Responsibility, and EthicsSlide3
Chapter 1Customer-Driven Strategic MarketingProfessor Jason
C. H. Chen, Ph.D.
School
of Business AdministrationGonzaga UniversitySpokane, WA 99258chen@jepson.gonzaga.eduSlide4
QuestionWhat is marketing? How did you define the term before you read/ we discuss this chapter?Slide5
ObjectivesTo be able to define marketing as focused on customers
To identify some important marketing terms, including target market, marketing mix,
marketing exchanges, and marketing
environmentTo understand the relationship between marketing and value
To
become aware of the marketing concept and
market
orientation
To understand the importance of building customer
relationships
To recognize the role of marketing in our
societySlide6
Defining MarketingThe process of creating, distributing, promoting,
and pricing goods, services, and
ideas to:
facilitating satisfying exchange relationships with customers
developing
and
maintaining favorable
relationships with stakeholders in a dynamic
environmentSlide7
Marketing Strategies/DecisionsTo Satisfy Market Needs
Select a
Target Market
Develop a
Marketing Mix
A
marketing strategy
is the selection of a
target market
and the creation of a
marketing mix
that will satisfy the needs of target market members.
A
marketing strategy articulates the best use of the company’s resources to accomplish its marketing objectives.Slide8
A Marketing Strategy
C
The
Marketing MixSlide9
A Marketing Strategy – showing the 4 P’s of a
Marketing Mix
Place
Product
Price
Promotion
CSlide10
Marketing Mix Decisions
Marketing
Mix
Integrated Marketing
Communications
Decision
(Promotion)
Product Decisions
Distribution
Decisions
(_______+ ______)
Price Decisions
Time
PlaceSlide11
Figure 1.1 - Components of Strategic Marketing
4 P’s
4 P’s
(
place+time
)Slide12
Marketing Focuses on CustomersCustomersThe purchasers of organizations’ productsThe focal point of all marketing activitiesTarget Market
A specific group of customers on whom an organization focuses its marketing effortsSlide13
Marketing Mix VariablesFour marketing activities a firm can control to meet the needs of customers in its target market
Product
Distribution
PromotionPrice
Marketing mix variables are often viewed as
controllable
but have their limitsSlide14
Product VariableA product can be:
A good
A service
An idea
Involves creating/modifying:
Brand names
Packaging
Product variable decisions are important because they are directly involved with creating products that address customers’ needs and wantsSlide15
Distribution VariableMarketing managers need to make products available in quantities desired to as many target market customers as possible
While minimizing these three
costs:
InventoryTransportation
Storage
Ensures
availability of products:
At the right
time
In
convenient
locationsSlide16
Distribution VariableMarketing managers maySelect/motivate intermediaries (wholesalers and retailers)
Establish/maintain inventory control procedures
Develop/manage transportation and
storage systems
How has the Internet and electronic commerce influenced the distribution variable?
Marketing Information SystemsSlide17
Promotion VariableRelates to activities used to inform individuals or groups about the organization and its productsCan aim to increase public awareness of the organization and of new or existing products
Can educate customers about product features
Can
urge people to take a stance on a political or social issue
Can help sustain interest in established productsSlide18
Price VariableRelates to decisions and actions associated with establishing pricing objectives and policies and determining product prices
Price is
a critical component of the marketing mix as customers are concerned about value obtained in an exchange
used as a competitive toolIntense price competition sometimes leads to price warsSlide19
Marketing Creates ValueValue is a customer’s subjective assessment of benefits relative to costs in determining the worth of a productCustomer
benefits include anything a buyer receives in an exchange
Customer
costs include anything a buyer must give up to obtain the benefits the product provides including cost, time, effort and riskThe marketing mix can be used to enhance perceptions of value (p.8)
Customer Benefits
Customer
Costs
Value
=
–Slide20
CostsMonetary costsNon-monetary costsTime and efforts customers expend to find and purchase desired productsRisk-reduction strategyan offer of a 100 percent satisfaction guarantee and becomes popular in today’s catalog/telephone/Internet shopping environment.Slide21
Figure 1.2 - Marketing Builds RelationshipsExchanges are the provision or transfer of goods, services, or ideas in return for something of value
E
xchange
(and with other stakeholders)Slide22
Relationships with CustomersFor an exchange to take place, four conditions must exist:
Two or more parties must participate, and each must possess something of value that the other party desires
The exchange should provide a benefit or satisfaction to both parties
Each party must have confidence in the promise of the “something of value” held by the other
To build trust, the parties to the exchange must meet expectations
Marketing activities should attempt to
create
and
maintain
satisfying exchange relationships.Slide23
Relationships with StakeholdersStakeholders are constituents
who have a “stake,” or claim, in
some aspect of a company’s products, operations, markets,
industry, and outcomes
Stakeholders include:
Customers
Employees
Investors and shareholders
Suppliers
Governments, communities and moreSlide24
Marketing EnvironmentThe marketing environment is dynamic
and includes the following forces:
Competitive
Economic
Political
Legal and
regulatory
Technological
Socio-cultural
The marketing environment forces surround the customer and affect the marketing mixSlide25
Figure 1.1 - Components of Strategic Marketing
4 P’s
4 P’s
(
place+time
)
#1
#2
#3
#4
#5
#6Slide26
Marketing EnvironmentEffects of these forces on buyers/sellers can be dramatic and difficult to predict
The impact on value can be extensive as market changes can easily impact how stakeholders perceive certain products
Unlike marketing-mix variables, an organization has little to no control over marketing environment forces.
Marketing environment forces can fluctuate quickly and dramatically, which is one reason why marketing is so interesting and challenging.
Changes in the marketing
environmen
produce
uncertainty
for marketers and at times hurt marketing efforts.Slide27
Marketing EnvironmentThe forces of the marketing environment affect a marketer’s ability to facilitate value-driven marketing exchanges in three ways
:
They influence customers by affecting their
lifestyle, standards of living, and
preferences and needs for products
They
help to determine whether and how a marketing manager can perform certain marketing
activities
They
may affect a marketing manager’s decisions and actions by influencing buyers’ reactions to the firm’s marketing mix
.Slide28
Marketing ConceptAccording to the marketing concept, an
organization should try to provide products that satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals
The marketing concept is a
management philosophy guiding an organization’s overall activities
A firm
that adopts the marketing concept must satisfy not only its customers’ objectives but also its own objectives
Customers are the main
focusSlide29
Evolution of the Marketing ConceptProduction OrientationSecond half of the nineteenth century, the Industrial Revolution improved speed and efficiency
Large increases in availability of products and consumer response was strongSlide30
Evolution of the Marketing ConceptSales OrientationDuring the first half of the 20th century competition increased and focus shifted to
selling products to buyers
Marketers were able to learn that many products did not meet consumers needs
Businesses viewed sales and selling as the main means of increasing profitsSlide31
Evolution of the Marketing ConceptMarket Orientation Emerged in the mid-20th century
Market orientation requires an organization-wide commitment to researching and responding to customer needs and
d
issemination of the marketing intelligence across departmentsNew-product innovation
by developing a strategic focus to explore and develop new products to serve target markets
Involves being responsive to ever-changing
customer needs
and
wantsSlide32
Implementing the Marketing Concept
Establish an information system to discover customers’ real
needs (e.g.,
BI – data mining)
Use the information to create satisfying products
Company must coordinate all its activities to satisfy objectives
Listen and respond to consumers frustrations and appreciation
is the key in implementing the marketing
conceptSlide33
Customercentric
Who are the customers?
Where are the customers?
Their purchasing habits
What they need/want?
How many they need/want?
When they need/want?
How to reach them?
Demands
Products/
Services
IS/E-BUSINESS
BUSINESS VALUE & FOCUS –IS Perspective
SCM
CRM
BPR
ERP
Value
Business Models & Strategies
33
SCM: Supply Chain Management
CRM: Customer Relationship Management
BPR: Business Process Reengineering
ERP: Enterprise Resources PlanningSlide34
Customer Relationship Management (CRM)
Marketing Strategy
Information Technology
???
(what is a
strategic bridge?)Slide35
Customer Relationship Management (CRM)
Marketing Strategy
Information Technology
CRM
(CRM provides a strategic bridge between marketing strategy and IT aimed at long-term relationships)Slide36
Customer Relationship ManagementCustomer relationship management (CRM) means using information about customers to create marketing strategies that develop and sustain desirable customer relationships
Marketing relationships with customers are the lifeline of all businesses
Profits can be obtained through relationships in the following ways:
1) By acquiring new customers
2) By enhancing profitability of existing customers
3) By extending the duration of customer relationships
How?
We will learn
BI
–
RapidMiner
a
dataming
tool for exploring “
Market Basket
” and “
Target Market
” if time is allowed.Slide37
CRM Suite of applications, a database, and a set of inherent processesIntended to support customer-centric organization
Integrates all primary activities of value chain
Manage all interactions with customer though four phases of
customer life cycle:Marketing - marketing sends messages to target marketCustomer ___________ - customer prospects order and need to be supported
___________ Management - support and resale processes increase value to existing customers
Loss/churn - win-back processes categorize customers according to value and attempt to win back high-value customers
Customer Relationship Management (CRM)
37
Acquisition
RelationshipSlide38
Four Phases of Customer Life Cycle
Fig
1-Extra:
The Customer Life Cycle
Figure
below depicts
the
four
phases of the customer life cycle and shows how a
CRM
system integrates them into three major processes: solicitation, lead-tracking, and relationship management.Slide39
CRM Applications39
Fig
(Extra):
CRM Applications
Customer Relationship Management (CRM) systems store data in a single database and link CRM processes to one another.Slide40
Customer Relationships
40Slide41
“Long-term and mutually beneficial arrangement in which both the buyer and seller focus on value enhancement through the creation of more satisfying exchanges.”Deepens the buyers trust Building satisfying exchange relationships between buyers and sellers requires:Gathering useful data at all customer contact points Analyzing that data to better understand customers’ needs, desires, and habitsRelationship MarketingSlide42
Importance of Marketing in a Global Economy SummaryMarketing costs (50% - 60%) consume a sizable portion of buyers’ dollarsUsed in nonprofit organizationsImportant to businesses and the economyFuels global economyMarketing knowledge enhances consumer awarenessConnects people through technologyComputers and telecommunications helps marketers understand and satisfy more customers than ever before
The Internet provides information about products and allows customer interaction
As more consumers adopt smartphones, mobile marketing is also becoming a major trendSlide43
People, Process and Technology
Start with People
43Slide44
The Importance of Marketing in Our Global EconomySocially responsible marketing – Promoting the welfare of customers and stakeholders
Green marketing
– A strategic process involving stakeholder assessment to:
create meaningful long-term relationships with customers while maintaining, supporting, and enhancing the natural environment (Safeway Whole Foods)Market orientation combined with social responsibility improves overall business performance.
All
organizations engage in some kind of marketing
The field offers interesting and challenging career opportunities throughout the
world
25-33% of civilian workers in the U.S. perform marketing
activities and marketing
skills are valuable in every fieldSlide45
Video Case 1.1: Cruising to Success: The Tale of New Belgium BrewingSummaryThis case illustrates how New Belgium Brewing’s market orientation has helped the company grow from a small business to America’s third largest brewery. Since its founding, New Belgium has emphasized the importance of meeting the needs of its many stakeholder groups, and that philosophy continues to guide the company’s marketing activities. While students may be familiar with the company’s corporate social responsibility activities, it is important for them to realize that those activities are part of the company’s marketing strategy and thus its profitability. Slide46
1. How has New Belgium implemented the marketing concept? According to the marketing concept, an organization should try to provide products that satisfy customers’ needs through a coordinated set of activities that also allow the organization to achieve its goals. New Belgium considers its customers and other stakeholders at every level of its marketing activities, which has led to the company’s popularity and success. Students may cite examples related to each part of the marketing mix, so make sure they focus on how the marketing mix contributes to customer satisfaction and the marketing concept. To ensure customer satisfaction, New Belgium focuses on creating quality products. The company engages in market research when creating its beers. It continually creates new products to keep customers engaged and excited about the brand. Even the company’s focus on sustainability reflects what is important to their customers. However, New Belgium’s corporate social responsibility activities are not just philanthropic—they are strategic. Because New Belgium beers provide more value, customers are willing to pay premium prices, which leads to higher profits for the company and its impressive 15 percent growth rate. Slide47
2. What has Kim Jordan done to create success at New Belgium? Kim Jordan created a unique marketing mix for New Belgium. Under her direction, the company crafted quality beers (product), placed them on shelves and in bars (distribution), created a unique indie brand (promotion), and increased their profit by providing more value and charging a higher price. In addition, Jordan’s vision for New Belgium’s corporate culture creates value for all stakeholder groups, including employees, customers, the environment, and the community and fosters loyalty to the New Belgium brandSlide48
3. How does New Belgium’s focus on sustainability as a core value contribute to its corporate culture and success? Sustainability has been a major part of the company’s vision since its founding. For this reason, NBB strives to incorporate environmental responsibility directly into its business strategies. Sustainability is important to several of New Belgium’s stakeholder groups, which increases customer and employee loyalty. Because of this, the company’s environmental philosophy creates a competitive advantage. Environmentally conscious consumers are more likely to do business with a company that incorporates green practices into its business activities. Sustainable practices also increase consumers’ perceptions of the value of New Belgium’s prices, which results in higher prices and better financial returns for the company.