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Marketing:AnIntroductionFifteenthEditionChapter01Marketing:CreatingCustomerValueandEngagementCopyright©2023,2020,2017PearsonEducation,Inc.AllRightsReservedObjectivesOutline(1of2)1.1
Definemarketingandoutlinethestepsinthemarketingprocess.1.2
Explaintheimportanceofunderstandingthemarketplaceandcustomersandidentifythefivecoremarketplaceconcepts.1.3
Identifythekeyelementsofacustomervalue-drivenmarketingstrategyanddiscussthemarketingmanagementorientationsthatguidemarketingstrategy.ObjectivesOutline(2of2)1.4Discusscustomerrelationshipmanagementandidentifystrategiesforcreatingvaluefor
customersandcapturingvaluefromcustomersinreturn.1.5Describethemajortrendsandforcesthatarechangingthemarketinglandscapeinthisageofrelationships.FirstStop:AmazonAmazondoesmuchmorethanjustsellgoodsonline.Itengagescustomersandcreatessatisfyingcustomerexperiences.“Thethingthatdriveseverythingiscreatinggenuinevalueforcustomers,”saysAmazonfounderJeffBezos.ObjectiveOutline1.1Definemarketingandoutlinethestepsinthemarketingprocess.WhatIsMarketing?Marketingisengagingcustomersandmanagingprofitablecustomerrelationships.GoalsofMarketingAttractnewcustomersbypromisingsuperiorvalueKeepandgrowcurrentcustomersbydeliveringsatisfactionFormsofMarketingTraditionalMakingasaleAbundanceofproductsinthenearbyshoppingcentersTelevision,magazine,anddirect-mailadsContemporarySatisfyingcustomerneedsImaginativeWebsitesandmobilephoneapps,blogs,onlinevideos,andsocialmediaReachcustomersdirectly,personally,andinteractivelyFigure1.1TheMarketingProcess:CreatingandCapturingCustomerValueObjectiveOutline1.1SummaryMarketing
createsvalueforcustomersunderstandmarketplaceandcustomersdesignacustomervalue-drivenmarketingstrategyconstructamarketingprogramengagecustomers,buildrelationshipsCapturesvaluefromcustomersObjectiveOutline1.2Explaintheimportanceofunderstandingthemarketplaceandcustomersandidentifythefivecoremarketplaceconcepts.UnderstandingtheMarketplaceandCustomerNeedsFivecorecustomerandmarketplaceconcepts:Needs,wants,anddemandsMarketofferingsValueandsatisfactionExchangesandrelationshipsMarketsCustomerNeeds,Wants,andDemands(1of2)NeedsStatesoffeltdeprivationPhysicalneeds—food,clothing,warmth,andsafetySocialneeds—belongingandaffectionIndividualneeds—knowledgeandself-expressionWantsFormtakenbyhumanneedswhenshapedbycultureandindividualpersonalityDemandsHumanwantsthatarebackedbybuyingpowerCustomerNeeds,Wants,andDemands(2of2)Stayingclosetocustomers:Airbnb’sCEOBrianChesky(left)andco-founderJoeGebbia(center)regularlystayatthecompany’shostlocations,helpingthemshapenewcustomersolutionsbasedonrealuserexperiences.MarketOfferingsProducts,services,information,orexperiencesOfferedtosatisfyaneedorwantMarketingmyopia—payingmoreattentiontothespecificproductsthantothebenefitsandexperiencesproducedCustomerValueandSatisfactionCustomersformexpectationsaboutthevalueandsatisfactionofmarketofferings.SatisfiedcustomersbuyagainDissatisfiedcustomersswitchtocompetitorsSettingtherightlevelofexpectationsLowexpectationsmayfailtoattractbuyersHighexpectationsmaydisappointbuyersExchangesandRelationshipsExchangeistheactofobtainingadesiredobjectbyofferingsomethinginreturn.Marketingconsistsofcreating,maintaining,andgrowingdesirableexchangerelationships.Strongrelationshipsarebuiltbyconsistentlydeliveringsuperiorcustomervalue.MarketsAllactualandpotentialbuyersofaproductSellersandConsumersmarketCustomer-managedrelationshipsFigure1.2AModernMarketingSystemObjectiveOutline1.2SummaryCustomersneeds,wants,anddemandsCustomerlifetimevalueandshareofcustomerLong-termcustomerequityOthermarketplaceconceptsmarketofferingsvalueandsatisfactionexchangeandrelationshipsmarketsValuepropositionObjectiveOutline1.3Identifythekeyelementsofacustomervalue–drivenmarketingstrategyanddiscussthemarketingmanagementorientationsthatguidemarketingstrategy.DesigningaCustomerValue–DrivenMarketingStrategy(1of4)Customervalue-drivenmarketingstrategy
Onceacompanyfullyunderstandsitsconsumersandthemarketplace,itmustdecidewhichcustomersitwillserveandhowitwillbringthemvalue.”Marketingmanagement:ChoosingtargetmarketsandbuildingprofitablerelationshipsDesigningawinningmarketingstrategyTargetmarket?Valueproposition?DesigningaCustomerValue–DrivenMarketingStrategy(2of4)SelectingcustomerstoserveMarketsegmentationreferstodividingthemarketsintosegmentsofcustomers.Targetmarketingreferstowhichsegmentstogoafter.DesigningaCustomerValue–DrivenMarketingStrategy(3of4)Choosingavalueproposition—thecompanymustdecidehowitwilldifferentiateandpositionitselfinthemarketplace.DesigningaCustomerValue–DrivenMarketingStrategy(4of4)MarketingManagementOrientationsProductionconceptProductconceptSellingconceptMarketingconceptSocietalmarketingconceptFigure1.3TheSellingandMarketingConceptsContrastedFigure1.4ThreeConsiderationsUnderlyingtheSocietalMarketingConceptPreparinganIntegratedMarketingPlanandProgramMajormarketingmixtoolsFourPsofmarketingProductPricePlacePromotionMarketingmixtoolsshouldbeblendedintoacomprehensiveintegratedmarketingprogram.ObjectiveOutline1.3SummaryMarketsegmentationTargetmarketingDifferentiationandpositioningProductionandproductconceptsSellingandmarketingconceptsSocietalmarketingconceptObjectiveOutline1.4Discusscustomerrelationshipmanagementandidentifystrategiesforcreatingvalueforcustomersandcapturingvaluefromcustomersinreturn.CustomerRelationshipManagementDeliveringsuperiorcustomervalueandsatisfactiontobuildandmaintainprofitablecustomerrelationshipsCustomer-perceivedvalue:Customer’sevaluationofamarketingofferrelativetothoseofcompetingoffersCustomersatisfaction:Extenttowhichaproduct’sperceivedperformancematchesabuyer’sexpectationsCustomerRelationshipLevelsandTools(1of2)LevelsBasicrelationshipsLow-margincustomersFullpartnershipsHigh-margincustomersToolsFrequencymarketingprogramsLoyaltyrewardsprogramsClubmarketingprogramsCustomerRelationshipLevelsandTools(2of2)Relationshipmarketingtools:AsanUberRewardsmember,themoreyouuseUber,themoreyoubenefit,withperkssuchaslocked-inpricing,priorityairportpickups,accesstohighlyrateddrivers,andcomplimentaryupgradesatnoextracost.Customer-EngagementMarketingCustomer-engagementmarketingmakesthebrandameaningfulpartofconsumers’conversationsandlives.Greaterconsumerempowermentmeansthatcompaniesmustpracticemarketingbyattraction.Marketersmustfindwaystoenterconsumers’conversationswithengagingandrelevantbrandmessages.Consumer-GeneratedMarketingBrandexchangescreatedbyconsumersConsumersplayanincreasingroleinshapingtheirownbrandexperiencesandthoseofotherconsumers.UninvitedandInvitedConsumer-to-consumerexchangesConsumersinvitedbycompaniesNewproductandserviceideasActiveroleinshapingadsPartnerRelationshipManagementWorkingcloselywithpartnersbothinsideandoutsidethecompanytojointlybringmorevaluetocustomersPartnersinsidethefirm—cross-functionalteamsPartnersoutsidethefirm—suppliers,channelpartnersCreatingCustomerLoyaltyandRetentionKeepingcustomersloyalmakesgoodeconomicsense.Customerlifetimevalueisthevalueoftheentirestreamofpurchasesacustomermakesoveralifetimeofpatronage.CustomerdefectionscanbecostlyCanlosethatcustomer’slifetimevalueMaycauseothercustomerstodefectGrowingShareofCustomerPortionofthecustomer’spurchasingintheirproductcategoriesShareofCustomerisincreasedby:GoodcustomerrelationshipmanagementOfferinggreatervarietytocurrentcustomersCreatingprogramstocross-sellandup-selltoexistingcustomersBuildingCustomerEquityTotalcombinedcustomerlifetimevaluesofallofthecompany’scustomersMeasuresthefuturevalueofthecompany’scustomerbaseIncreaseswhentheloyaltyofthefirm’sprofitablecustomersincreasesBettermeasureofafirm’sperformancethancurrentsalesormarketshareCustomerEquityCadillac:ManagingCustomerEquityManagingcustomerequity:Toincreasecustomerequity,Cadillacismakingtheclassiccarcoolagainamongyoungerbuyers.Forexample,saysGM,“Cadillacwillleadthecompanytoanall-electricfuture.”Figure1.5CustomerRelationshipGroupsObjectiveOutline1.4SummaryCustomerrelationshipmanagementCustomer-engagementmarketingCustomerequityCustomervalueandsatisfactionCreatingvaluefor
customersandcapturingvaluefromcustomersinreturn.ObjectiveOutline1.5Describethemajortrendsandforcesthatarechangingthemarketinglandscapeinthisageofrelationships.TheChangingMarketingLandscapeDigitalAgeChangingEconomicEnvironmentGrowthofNot-for-ProfitMarketingRapidGlobalizationSustainableMarketingTheDigitalAge:Online,Mobile,andSocialMediaMarketingDigitalandsocialmediamarketing:EngagingconsumersviatheirdigitaldevicesusingdigitalmarketingtoolsMobilemarketing:Usingmobilechannelstostimulateimmediatebuying,makeshoppingeasier,andenrichthebrandexperienceBlendingthenewdigitalapproacheswithtraditionalmarketingcreatesasmoothlyintegratedmarketingstrategyandmix.SocialMediaMarketingOnlinesocialmediaprovideadigitalhomeforpeopletoconnectandshareimportantinformationandlife’smoments.Socialmediaofferanidealplatformforreal-timemarketingandengagement.Facebook,Twitter,Snapchat,andsmallermorefocusedsites.BigDataandArtificialIntelligence(AI)MarketerscannowamassmountainsofdataBrandscanusebigdatato:gaindeepcustomerinsightspersonalizemarketingoffersandimprovecustomerengagementsandserviceGrowthofNot-for-ProfitMarketingSoundmarketingcanhelpnot-for-profitsattractmembership,funds,andsupport.RapidGlobalizationandSustainableMarketingManagersaroundtheworldaretakingbothlocalandglobalviewsofthecompany’s:IndustryCompetitorsOpportunitiesCorporateethicsandsocialresponsibilityhavebecomeimportantforeverybusiness.ObjectiveOutline1.5SummaryOnline,mobile,andsocialmediamarketingPost-recessioneconomyNot-for-profitmarketingConnectinggloballyEthicalandsocietalresponsibilitiesFigure1.6AnExpandedModeloftheMarketingProcessFinalThoughtsHowdidtheCOVID-19pandemicimpactmarketsandmarketing?Intheaftermathofthepandemic,arethingsreturningtothewaytheywerebefore?Whyorwhynot?Marketing:AnIntroductionFifteenthEditionChapter02CompanyandMarketingStrategy:PartneringtoBuildCustomerEngagement,Value,andRelationshipsCopyright©2023,2020,2017PearsonEducation,Inc.AllRightsReservedObjectivesOutline(1of2)2.1 Explaincompany-widestrategicplanninganditsfoursteps.2.2 Discusshowtodesignbusinessportfoliosanddevelop
growthstrategies.2.3 Explainmarketing’sroleinstrategicplanningandhowmarketingworkswithitspartnerstocreateanddelivercustomervalue.ObjectivesOutline(2of2)2.4 Describetheelementsofacustomervalue-drivenmarketingstrategyandmixandtheforcesthatinfluencethem.2.5 Listthemarketingmanagementfunctions,includingtheelementsofamarketingplan,anddiscusstheimportanceofmeasuringandmanagingmarketingreturnoninvestment.FirstStop:Nike’sCustomerValue-DrivenMarketingStrategyTheNikeswoosh—it’severywhere.Nike’soutstandingsuccessresultsfromcreatingdeepbrand–customerengagement,valuedbrandexperiences,andclosebrandcommunitywithandamongcustomers.ObjectiveOutline2.1Explaincompany-widestrategicplanninganditsfoursteps.StrategicPlanningGameplanforlong-runsurvivalandgrowthHelpstomaintainastrategicfitbetweenitsgoalsandcapabilitiesandchangingmarketingopportunities.Figure2.1StepsinStrategicPlanningMissionStatementStatementoftheorganization’spurposeMarketoriented—definedintermsofsatisfyingbasiccustomerneedsEmphasizethecompany’sstrengthsFocusoncustomersandthecustomerexperienceTable2.1(1of2)Product-versusMarket-OrientedBusinessDefinitionsCompanyProduct-OrientedDefinitionMarket-OrientedDefinitionStarbucksWesellcoffeeandsnacks.Wesell“TheStarbucksExperience,”onethatenrichespeople’slivesonemoment,onehumanbeing,oneextraordinarycupofcoffeeatatime.WalmartWerundiscountstoresWedeliverlowpriceseverydayandgiveordinaryfolksthechancetobuythesamethingsasrichpeople.“SaveMoney.LiveBetter.”ZoomWehostonlinemeetings.Wedeliverhappinessbymakingvideocommunicationsfrictionlessandsecure,empoweringpeopletoaccomplishmore.HomeDepotWeselltoolsandhomerepairandimprovementitemsWeempowerconsumerstoachievethehomesoftheirdreams.Table2.1(2of2)Product-versusMarket-OrientedBusinessDefinitionsCompanyProduct-OrientedDefinitionMarket-OrientedDefinitionNPRWeareapublicradionetwork.Wecreateamoreinformedpublic—onechallengedandinvigoratedbyadeeperunderstandingandappreciationofevents,ideas,andculturesSephoraWeareabeautyproductsretailer.Weselllifestyleandself-expressionbyhelpingcustomerstounlocktheirbeautypotentialAirbnbWerentplacesonlineWehelpcreateaworldwherepeoplecan“belonganywhere,”wheretheycanliveinaplaceinsteadofjusttravellingtoit.SettingCompanyObjectivesandGoals(1of2)DetailedsupportingobjectivesforeachlevelofmanagementSettingahierarchyofobjectivesBusinessobjectivesMarketingobjectivesSettingCompanyObjectivesandGoals(2of2)ObjectiveOutline2.1SummaryStrategicplanningDefiningthecompany’smissionSettingobjectivesandgoalsDesigningabusinessportfolioDevelopingfunctionalplans CompanymissionstatementMarket-oriented,realistic,specificMotivating,consistentwithmarketenvironmentObjectiveOutline2.2Discusshowtodesignbusinessportfoliosanddevelop
growthstrategies.BusinessPortfolio(1of2)CollectionofbusinessesandproductsthatmakeupthecompanyStepsinbusinessportfolioplanning:Analyzethefirm’scurrent
businessportfolioDevelopstrategiestoshapethefutureportfolioBusinessPortfolio(2of2)MarsInc.isnotonlytheworld’snumberonecandymakerbutaworld-leadingpetnutritionandhealth-carecompany.PortfolioAnalysisManagement’sevaluationoftheproductsandbusinessesthatmakeupthecompanyIdentifythestrategicbusinessunits(SBUs)AssessSBUs’attractivenessanddecideonthelevelofsupportSBUdeservesDirectresourcestowardmoreprofitablebusinessesandphasedownordropitsweakeronesFigure2.2TheBCGGrowth-ShareMatrixGrowth-ShareMatrixEvaluatesacompany’sSBUsintermsofmarketgrowthrateandrelativemarketshareProblemswithGrowth-ShareMatrixDifficult,timeconsuming,andcostlyDifficulttodefineandmeasureProvideslittleadviceforfutureplanningFigure2.3TheProduct/MarketExpansionGridDevelopingStrategiesforGrowthInonlythreedecades,StarbuckshasgrownatanastoundingpacefromasmallSeattlecoffeeshoptoanover$24billionpowerhousewithmorethan33,000retailstoresinmorethan76countries.DownsizingProductsorbusinessunitsthatareunprofitableornolongerfitthecompany’soverallstrategyReasonstoabandonproductsormarketsRapidgrowthofthecompanyLackofexperienceinamarketChangeinmarketenvironmentDeclineofaparticularproductObjectiveOutline2.2SummaryPortfolioanalysisBCGGrowth-ShareMatrixProduct/marketexpansiongridStrategiesforgrowthanddownsizingObjectiveOutline2.3Explainmarketing’sroleinstrategicplanningandhowmarketingworkswithitspartnerstocreateanddelivercustomervalue.PlanningMarketing:PartneringtoBuildCustomerRelationshipsProvidesaguidingphilosophyMarketingconcept—companystrategyshouldcreatecustomervalueandbuildprofitablerelationshipsProvidesinputstostrategicplannersIdentifymarketopportunitiesandpotentialtotakeadvantageofthemDesignsstrategiesforreachingthebusinessunit’sobjectivesPartneringwithOtherCompanyDepartments(1of2)Companydepartmentsarelinksinthecompany’sinternalvaluechain.Firm’ssuccessdependsonhowwellthevariousdepartmentscoordinatetheiractivities.Marketersshouldensureallthedepartmentsarecustomer-focusedanddevelopasmoothfunctioningvaluechain.PartneringwithOtherCompanyDepartments(2of2)TrueValue’sInternalValueChain.PartneringwithOthersintheMarketingSystemCompaniesshouldassessvaluechainsInternaldepartmentsExternal:suppliers,distributorsandcustomersValuedeliverynetworkiscomposedofthecompany,itssuppliers,itsdistributors,anditscustomersObjectiveOutline2.3SummaryPlanningMarketingPartneringtobuildcustomerrelationshipsPartneringwithothercompanydepartmentsPartneringwithsuppliers,distributors,andcustomersValuedeliverynetworkObjectiveOutline2.4Describetheelementsofacustomervalue-drivenmarketingstrategyandmixandtheforcesthatinfluencethem.Figure2.4
ManagingMarketingStrategiesandtheMarketingMixCustomerValue-DrivenMarketingStrategyMarketinglogicbywhichthecompanycreatescustomervalueandachievesprofitablecustomerrelationshipsIntegratedmarketingmix:product,price,place,andpromotionActivitiesforbestmarketingstrategyandmixMarketinganalysisPlanning,implementation,andcontrolMarketSegmentationandMarketTargetingMarketsegmentationDividingamarketintodistinctgroupsofbuyerswhohavedifferentneeds,characteristics,orbehaviors,andwhomightrequireseparateproductsormarketingprogramsMarkettargetingEvaluatingeachmarketsegment’sattractivenessandselectingoneormoresegmentstoenterMarketDifferentiationandPositioningPositioningtheproducttooccupyaclear,distinctive,anddesirableplacerelativetocompetingproductsDifferentiatingthemarketofferingtocreatesuperiorcustomervalueTheentiremarketingprogramshouldsupportthechosenpositioningstrategy.PositioningPositioning:ShareableurbantransportationcompanyLimepositionsitselfas“Smartmobilityforthemodernworld.”Suchsimplestatementsformthebackboneofabrand’smarketingstrategy.Figure2.5TheFourPsoftheMarketingMixCriticismsoftheFourPsOmitsorunderemphasizesserviceproductsNeedstoincludepackagingasaproductdecisionBuyer’sperspectivewouldemphasizethefourAs:AcceptabilityAffordabilityAccessibilityAwarenessObjectiveOutline2.4SummaryCustomervalue-drivenmarketingstrategyMarketsegmentationandmarketsegmentMarkettargetingPositioninganddifferentiatingFourPsofthemarketingmixObjectiveOutline2.5Listthemarketingmanagementfunctions,includingtheelementsofamarketingplan,anddiscusstheimportanceofmeasuringandmanagingmarketingreturnoninvestment.Figure2.6ManagingMarketing:Analysis,Planning,Implementation,andControlFigure2.7SWOTAnalysis:Strengths(S),Weaknesses(W),Opportunities(O),andThreats(T)ContentsofaMarketingPlan(1of2)SectionPurposeExecutivesummaryBriefsummaryofthemaingoalsandrecommendationsCurrentmarketingsituationGivesthemarketdescription
andtheproduct,
competition,anddistribution
reviewThreatsandopportunitiesanalysisHelpsmanagementtoanticipateimportantpositiveornegativedevelopmentsObjectivesandissuesStatesanddiscussesma
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