Marketing:ManagingProfitableCustomerRelationshipsChapter11-1Objectives•Beabletodefinemarketinganddiscussitscoreconcepts.•Beabletodefinemarketingmanagementandcomparethefivemarketingmanagementorientations.1-2Objectives•Understandcustomerrelationshipmanagementandstrategies.•Realizethemajorchallengesfacingmarketersinthenew“connected”millennium.1-3•Strongsales,noprofits•Customer-driventoitscore•Eachcustomer’sexperienceisunique•Providesgreatselection,goodvalue,discoveryandconvenience•AtrueonlinecommunityAmazon.comDiscussion:WillAmazon.comSurvive?CaseStudy1-4WhatisMarketing?•MarketingismanagingprofitablecustomerrelationshipsAttractingnewcustomersRetainingandgrowingcurrentcustomers•“Marketing”isNOTsynonymouswith“sales”or“advertising”1-5WhatisMarketing?•Kotler’ssocialdefinition:“Marketingisasocialandmanagerialprocessbywhichindividualsandgroupsobtainwhattheyneedandwantthroughcreatingandexchangingproductsandvaluewithothers.”1-6•Goods•Services•Experiences•Events•Persons•Places•Properties•Organizations•Information•IdeasManyThingsCanBeMarketed!WhatisMarketing?1-7•Needs,wants,anddemands•Marketingoffers:includingproducts,servicesandexperiences•Valueandsatisfaction•Exchange,transactionsandrelationships•MarketsCoreMarketingConceptsWhatisMarketing?1-8MarketingManagement•Marketingmanagementis“theartandscienceofchoosingtargetmarketsandbuildingprofitablerelationshipswiththem.”Creating,deliveringandcommunicatingsuperiorcustomervalueiskey.1-9MarketingManagement•CustomerManagement:Marketersselectcustomersthatcanbeservedwellandprofitably.•DemandManagement:Marketersmustdealwithdifferentdemandstatesrangingfromnodemandtotoomuchdemand.1-10MarketingManagement•Productionconcept•Productconcept•Sellingconcept•Marketingconcept•SocietalmarketingconceptManagementOrientationsMarketingManagement1-11CRM•CRM–Customerrelationshipmanagement...“istheoverallprocessofbuildingandmaintainingprofitablecustomerrelationshipsbydeliveringsuperiorcustomervalueandsatisfaction.”1-12CRM•Itcosts5to10timesMOREtoattractanewcustomerthanitdoestokeepacurrentcustomersatisfied.•Marketersmustbeconcernedwiththelifetimevalueofthecustomer.1-13CRM•Attracting,retainingandgrowingcustomers•Buildingcustomerrelationshipsandcustomerequity•Customervalue/satisfactionPerceptionsarekeyMeeting/exceedingexpectationscreatessatisfaction•LoyaltyandretentionBenefitsofloyaltyLoyaltyincreasesassatisfactionlevelsincreaseDelightingconsumersshouldbethegoal•GrowingshareofcustomerCross-sellingKeyConcepts1-14CRM•CustomerequityThetotalcombinedcustomerlifetimevaluesofallcustomers.Measuresafirm’sperformance,butinamannerthatlookstothefuture.KeyConcepts•Attracting,retainingandgrowingcustomers•Buildingcustomerrelationshipsandcustomerequity1-15CRM•CustomerrelationshiplevelsandtoolsTargetmarkettypicallydictatestypeofrelationshipBasicrelationshipsFullrelationshipsCustomerloyaltyandretentionprogramsAddingfinancialbenefitsAddingsocialbenefitsAddingstructuralties•Attracting,retainingandgrowingcustomers•BuildingcustomerrelationshipsandcustomerequityKeyConcepts1-16MarketingChallenges•Technologicaladvances,rapidglobalization,andcontinuingsocialandeconomicshiftsarecausingmarketplacechanges.•MajormarketingdevelopmentscanbegroupedunderthethemeofConnecting.1-17MarketingChallenges•Viatechnology•Withcustomers•Withmarketingpartners•Withtheworld•Advancesincomputers,telecommunications,video-conferencing,etc.aremajorforces.Databasesallowforcustomizationofproducts,messagesandanalysisofneeds.•TheInternetFacilitatesanytime,anywhereconnectionsFacilitatesCRMCreatesmarketspacesConnecting1-18MarketingChallenges•Selectiverelationshipmanagementiskey.Customerprofitabilityanalysisseparateswinnersfromlosers.•Growing“shareofcustomer”Cross-sellingandup-sellingarehelpful.•Directsalestobuyersaregrowing.Connecting•Viatechnology•Withcustomers•Withmarketingpartners•Withtheworld1-19MarketingChallenges•Partnerrelationshipmanagementinvolves:ConnectinginsidethecompanyConnectingwithoutsidepartnersSupplychainmanagementStrategicalliancesConnecting•Viatechnology•Withcustomers•Withmarketingpartners•Withtheworld1-20MarketingChallenges•GlobalizationCompetitionNewopportunities•Greaterconcernforenvironmentalandsocialresponsibility•Increasedmarketingbynonprofitandpublic-sectorentitiesSocialmarketingcampaignsConnecting•Viatechnology•Withcustomers•Withmarketingpartners•Withtheworld