1-1 Visit UMT online at © UMT 2004 MKT100Version: 11-10-04 PRINCIPLES OF MARKETING University of Management and Technology 1901 N. Fort

1-1Visit UMT online at www.umtweb.edu© UMT 2004 MKT100Version: 11-10-04

PRINCIPLES OF PRINCIPLES OF MARKETINGMARKETING

University of Management and Technology1901 N. Fort Myer Drive

Arlington, VA 22209 USAPhone: (703) 516-0035

Fax: (703) 516-0985Website: www.umtweb.edu

1-2Visit UMT online at www.umtweb.edu© UMT 2004 MKT100Version: 11-10-04

CHAPTER 1:CHAPTER 1:Marketing in a Changing Marketing in a Changing World: Creating Customer World: Creating Customer Value and SatisfactionValue and Satisfaction

Armstrong, G. & Kotler, P. Marketing: An Armstrong, G. & Kotler, P. Marketing: An IntroductionIntroduction

(6th ed.) Prentice Hall © 2003.(6th ed.) Prentice Hall © 2003.

1-3Visit UMT online at www.umtweb.edu© UMT 2004MKT100

Visit UMT online at www.umtweb.eduVersion: 11-10-04

Visit UMT online at www.umtweb.edu

Road Map: Previewing the ConceptsRoad Map: Previewing the Concepts

Define what marketing is and discuss its core concepts.

Explain the relationships between customer value, satisfaction, and quality.

Define marketing management and understand how marketers manage demand and build profitable customer relationships.

Compare the five marketing management philosophies.

Analyze the major challenges facing marketers heading into the new “connected” millennium.




What is Marketing?What is Marketing?

Simply put: Marketing is the delivery of customer satisfaction at a profit.

Goals: Attract new customers by promising superior value and

keep and grow current customers by delivering satisfaction.




Core Marketing Concepts Core Marketing Concepts (Fig. 1-1)(Fig. 1-1)




Marketing DefinedMarketing Defined

Process by which individuals and groups obtain what they needneed and want want through creating and

exchanging products exchanging products and value with others.




What are Consumers’ Needs, Wants, What are Consumers’ Needs, Wants, and Demands?and Demands?

Needs Needs - state of felt deprivation including physical, social, and individual needs i.e hunger

WantsWants - form that a human need takes as shaped by culture and individual personality i.e. bread

DemandsDemands - human wants backed by buying power i.e. money




ExperiencesExperiences PersonsPersons

ProductsAnything that can be Offered to a Market to Satisfy a Need or Want

ProductsAnything that can be Offered to a Market to Satisfy a Need or Want

PlacesPlaces

OrganizationsOrganizations IdeasIdeasActivitiesActivities

What Will Satisfy Consumers’ Needs What Will Satisfy Consumers’ Needs and Wants?and Wants?

ServicesActivity or Benefit Offered for Sale That is Essentially

Intangible and Doesn’t Result in the Ownership of Anything

ServicesActivity or Benefit Offered for Sale That is Essentially

Intangible and Doesn’t Result in the Ownership of Anything




How Do Consumers ChooseHow Do Consumers ChooseAmong Products and Services?Among Products and Services?

Total Quality Management Involves Improving the Quality of Products, Services, and

Business Processes

Product’s Perceived Performance in Delivering Value Relative to Buyer’s

Expectations is Customer Satisfaction

Value Gained From Owning a Product and Costs of Obtaining the Product is

Customer Value




ExchangesExchanges TransactionsTransactions

Relationships Relationships Building a MarketingNetwork by Adding:•Financial Benefits

•Social Benefits•Structural Ties

•Profitable Customers

How Do Consumers Obtain Products How Do Consumers Obtain Products and Services?and Services?




Modern Marketing System Modern Marketing System (Fig. 1-2)(Fig. 1-2)




Marketing ManagementMarketing Management

Attracting new customers and retaining and building relationships with current customers

ProfitableCustomer

Relationships

Finding and increasing demand, also changing or reducing demand such as in Demarketing

DemandManagement

Involves managing demand, which involves managing customer relationships

MarketingManagement




Stage 1. Entrepreneurial MarketingStage 1. Entrepreneurial Marketing

Stage 2. Formulated MarketingStage 2. Formulated Marketing

Stage 3. Intrepreneurial MarketingStage 3. Intrepreneurial Marketing

Marketing Management PracticeMarketing Management Practice




Production ConceptProduction Concept

Product ConceptProduct Concept

Selling ConceptSelling Concept

Marketing ConceptMarketing Concept

Societal Marketing ConceptSocietal Marketing Concept

Marketing Management PhilosophiesMarketing Management Philosophies




Marketing and Sales Concepts Marketing and Sales Concepts Contrasted (Fig. 1-3)Contrasted (Fig. 1-3)




Societal Marketing Concept (Fig. 1-4)Societal Marketing Concept (Fig. 1-4)

http://www.johnsonandjohnson.com/




Marketing Challenges in the New Marketing Challenges in the New “Connected” Millennium (Fig. 1-5)“Connected” Millennium (Fig. 1-5)




Learn About &Track CustomersWith Databases

Communicate WithCustomers in Groups

Or One-on-One

Create Products &Services Tailored to

Meet Customer Needs

Distribute Products More Efficiently &

Effectively

Connecting Technologies in Computers,

Telecommunications,Information, & Transportation

Help To:

Technologies for ConnectingTechnologies for Connecting




The InternetThe Internet

The Internet has been hailed as the technology behind a New Economy.

New applications include:“click-and-mortar” companies

“click-only” companies

Business-to-business e-commerce

Business-to-business transactions online are expected to reach $3.6 trillion in 2003.

By 2005, 500,000 companies will use the Internet to do business.




Connections With CustomersConnections With Customers

Most marketers are targeting fewer, potentially more profitable customers.

Asking:What value does the customer bring to the organization?

Are they worth pursuing?

Connecting for a customer’s lifetime.




BankOne (Marketing at Work BankOne (Marketing at Work 1-3)1-3)

BankOne focuses on connecting with customers they can serve profitably.

Premier One customers know that they are “special, exclusive, privileged, valued.”

http://www.bankone.com/




Direct Connections With CustomersDirect Connections With Customers

Many companies use technologies to let them connect more directly with their customers.

Products available via telephone, mail-order catalogs, kiosks and e-commerce.

Some firms sell only via direct channels (i.e. Dell Computer, http://www.amazon.com/), others use a combination.

Direct marketing is redefining the buyer’s role in connecting with sellers.

Buyers are active participants in shaping the marketing offer and process; some buyers design their own products online such as at http://www.landsend.com/.




Connections With Marketing’s PartnersConnections With Marketing’s Partners

Connecting Inside the Company

Every employee must be customer-focused

Teams coordinate efforts toward customers

Connecting With Outside Partners

Supply Chain Management

Strategic Alliances




Connections With the World Around UsConnections With the World Around Us

Global Connections

Value Connections

Social Responsibility Connections

Broadening Connections




Rest Stop: Reviewing the ConceptsRest Stop: Reviewing the Concepts

Define what marketing is and discuss its core concepts.

Explain the relationships between customer value, satisfaction, and quality.

Define marketing management and examine how marketers manage demand and build profitable customer relationships.

Compare the five marketing management philosophies.

Analyze the major challenges facing marketers heading into the next millennium.

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1-1 Visit UMT online at © UMT 2004 MKT100Version: 11-10-04 PRINCIPLES OF MARKETING University of Management and Technology 1901 N. Fort