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Marketing in a Changing World: Creating Customer Value and Satisfaction

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E.g. At Disney World, each manager spends a day in the park in a Mickey costume or work on the front line - taking tickets, selling pop-corn. ... – PowerPoint PPT presentation

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Title: Marketing in a Changing World: Creating Customer Value and Satisfaction


1
CHAPTER 1
  • Marketing in a Changing World Creating Customer
    Value and Satisfaction
  • Objective Introducing the basic concepts and
    philosophies of marketing.

2
What is Marketing?
  • Marketing is the management of creating and
    exchanging products and value in order to satisfy
    the needs and wants.
  • Marketing satisfy customers at a profit.
  • The goal of marketing is (1) to attract new
    customers by promising superior value (e.g.
    Ritz-Carlton memorable experiences, Always
    Coca Cola) and (2) to keep current customers by
    delivering satisfaction.

3
Needs, Wants, and Demands
  • Consumers have needs (physical, social,
    individual etc.) wants, and demands to be
    satisfied. Consumers view products as bundles of
    value (benefits) and choose products that give
    them the best value for their money. E.g. Honda
    Civic ? transportation, low price, fuel economy
    Mercedes ? comfort, luxury, status

4
Products
  • A product (persons, places, organizations,
    activities, ideas) is anything that can satisfy
    a need or want. Producers must see themselves as
    providing a solution to a need rather than just
    selling a product. Otherwise, when a new product
    satisfies the needs better or less expensively,
    they would not make money.
  • Research is a must to understand the needs and
    wants of the customers to produce the right
    product. E.g. At Disney World, each manager
    spends a day in the park in a Mickey costume or
    work on the front line - taking tickets, selling
    pop-corn.

5
Value, Satisfaction, and Quality
  • How do customers choose among these many
    products? Consumers make choices based on
  • Value is the difference between owning the
    product and the cost of obtaining the product, in
    an way profit to the customer. Customers do not
    judge product values objectively, on the contrary
    they act on perceived value. E.g. Is Hilton
    really the best hotel company?

6
  • Satisfaction is the difference between the
    products performance and buyers expectations.
    If the products performance falls short of
    expectations, the buyer is dissatisfied. If the
    performance matches or exceeds expectations, the
    buyer is satisfied. Smart companies aim to
    satisfy customers by promising only what they can
    give, then giving more than they promise. Benefit
    of satisfying customers Customer satisfaction
    create an emotional tie (customer loyalty) to a
    product. Highly satisfied customers make (1)
    repeat purchases, (2) are less price sensitive,
    (3) talk positively to their friends.

7
  • Quality simply quality can be defined as
    freedom from defects. Today, most companies
    define quality in terms of customer satisfaction.
    E.g. according to Motorola if the customer
    doesnt like the product, its a defect.
    Quality starts with customer needs and ends with
    customer satisfaction. The concept of total
    quality management is in a away total customer
    satisfaction. Improving the quality of a
    product that customers want increases customer
    satisfaction, therefore increases profit.

8
Exchange, Transactions, and Relationships
  • Marketing occurs when people decide to satisfy
    needs and wants through exchange.
  • Exchange (transaction) is the act of getting an
    object (product, service, idea ) from someone
    by giving something in return.
  • Marketing should create mutually beneficial
    relationships (good for both parties) to generate
    profitable transactions.
  • Marketing is the art of attracting and keeping
    profitable customers.

9
Markets
  • A market is the set of actual and potential
    buyers of a product. These buyers share a
    particular need or want that can be satisfied
    through exchanges and relationships.
  • The size of the market depends on the number of
    people (1) who have the need, (2) have resources
    (money) for the exchange and (3) want to spend
    these resources in the exchange.

10
Marketing
  • Marketing means managing markets to bring about
    exchanges and relationships for the purpose of
    creating value and satisfying needs and wants.
  • Exchange process involve work. Sellers must
    identify customer needs, design right products,
    set right prices, promote and deliver the
    products in the right ways. These are the core
    marketing principles.

11
Marketing Management
  • Marketing management is the analysis, planning,
    implementation, and control of programs to create
    exchanges with target buyers to achieve
    organizational objectives. In a way, marketing
    management is demand - customer management.
  • A companys demand comes from two groups new
    customers and repeat customers. Marketing
    management deals with finding ways (1) to attract
    new customers and create transactions with them
    and also (2) to retain current customers and
    build lasting customer relationships.

12
Marketing Management Philosophies
  • There are five concepts that organizations
    conduct their marketing activities the
    production, product, selling, marketing and
    societal marketing concepts.
  • The Production Concept holds that consumers will
    favor products that are available and highly
    affordable. Here, the management focus on
    improving production and distribution. This
    oldest philosophy is useful in two types of

13
  • situation. (1) when the demand for a product
    exceeds the supply (2) when the products cost is
    too high and improved productivity is needed to
    bring it down. E.g. Henry Fords Model T, TI
    watches.
  • The Product Concept holds that consumers favor
    products that offer the most quality,
    performance and innovative features. Here, the
    organization should focus on making continuous
    product improvement.
  • The Selling Concept holds that consumers do not
    buy enough products if there are not large-scale
    selling and promotion effort. Most

14
  • companies use the selling concept when they have
    overcapacity. This concept focuses on creating
    sales transactions rather than on building
    long-term, profitable relationships with
    customers.
  • The Marketing Concept holds that achieving
    organizational goals (making profit) depends on
    understanding the needs and wants of target
    markets and delivering the desired satisfactions
    more effectively and efficiently than competitors
    do. E.g. Disney, McDonalds, Bosch are
    customer-driven companies.

15
  • The Societal Marketing Concept holds that the
    organization should not only satisfy the needs
    and wants but also improve both customers and
    societys well-being. This newest philosophy
    focus on customer long-term welfare, since today
    we have environmental problems, resource
    shortages, population growth etc. E.g. Critics
    against fast-food restaurants that food has a lot
    of fat and salt harmful for health, a lot of
    packaging increasing waste and pollution. Here,
    the companies try to balance (1) company profits,
    (2) consumer wants, (3) societys interests.
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