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Creating Customer Relationships and Value Through Marketing

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					MTC Chapter 1- Creating Customer Relationships and Value Through Marketing


   -   David Windorski, 3M inventor, converted his knowledge about student study
       habits into a product they would find useful.
   -   Art Fry discovered an adhesive that would temporarily stick, sent it to 500 large
       corporations, and found out they loved it Post-It Notes
   -   WHAT marketing strategy is the 3M Post-it marketing team using today?

   -   marketing is more broad than advertising; it delivers genuine value to customers.
       Marketing provides value to customers through close relationships with them to
       benefit the organization and those closely related to it.
   -   have to discover needs and wants of prospective customers and then satisfy them;
       the key to this is exchange, which is the trade of things of value between buyer
       and seller so each is better off

The Diverse Forces Influencing Marketing Activities
   - foremost is the organization
   - management is responsible for establishing goals
   - marketing dept works with a network of other depts. And employees to provide
       satisfying products
   - see image on page 8

How Marketing Discovers and Satisfies Consumer Needs
  - need marketing research to discover consumer needs; difficult because not all
     consumers know that they want something (like Apple’s first personal computer-
     consumers had to be educated on how to use it)

Product Fails:
   1. Dr. Care toothpaste in aerosol container- easy to use and sanitary, but messy if
       used by children
   2. Hot Pockets- convenient food, but ice crystals form, and doesn’t taste as good
   3. Robotic floor washer- effective at cleaning, but can get stuck under furniture and
       doesn’t clean dirt in corners
   4. Coca-Cola’s C2- reduced-carb cola that still had some sugar, for people 20-40,
       but C2 was flat, had unpleasant aftertaste, and was expensive
   - meeting the changing needs of consumers is a continuing challenge for firms

Needs and Wants
   - a need occurs when a person feels deprived of basic necessities; a want is a need
       shaped by knowledge, culture, and personality
   - marketing shapes a person’s wants

Markets
   - a market is people with desire and ability to buy a specific product
   -   target market- specific group of potential consumers toward which an org directs
       its marketing program
   -   Market first discovers consumer needs, then chooses a target market, then takes
       steps to satisfy their needs
       (develop a complete marketing program to reach consumers by using the four P’s)
   -   Product- a good, service, or idea to satisfy consumer’s needs
   -   Price- what is exchanged for the product
   -   Promotion- a means of communication between seller and buyer
   -   Place- a means of getting product to the consumer
   -   The four P’s are elements of the marketing mix, the marketing manager’s
       controllable factors that can be used to solve a marketing problem
           o Example: when a product goes on sale, changing the price component of
               the marketing mix

Uncontrollable Environmental Forces
   - marketers can control marketing mix, but not environmental forces-
      uncontrollable factors involving social, economic, technological, competitive, and
      regulatory forces (what consumers want and need, changing technology, state of
      economy, govt restrictions)

The Marketing Program: How Customer Relationships are Built
   - customer value is the unique combo of benefits received by targeted buyers that
      includes quality, price, convenience, on-time delivery, and before- and after-sale
      service
   - firms now try to place a dollar value on a loyal customer
   - firms must find ways to build long-term customer relationships to provide unique
      values that they alone can deliver to targeted markets; can’t be all things to all
      people
   - Examples: Wal-Mart, SWA, Costco, and Dell offer best price
          o Starbucks, Nike, Microsoft, J & J offer best products
          o Land’s End and Home Depot deliver best service
   - firm achieves customer relationships through marketing mix
   - relationship marketing- linking the org to its individual customers, employees,
      suppliers, and other partners for their mutual long-term benefit
   - marketing program- a plan that integrates the marketing mix to provide a good,
      service, or idea to prospective buyers
   - MARKETING DEPARTMENT
          o 1. Discover consumer needs
          o 2. Concepts for products
          o 3. Satisfy needs by finding right combo of 4 P’s
          o 4. Goods, services, ideas
          o 5. Potential consumers: the Market
          o 6. Information about needs
          o 7. Discover Consumer needs

Evolution of the Market Orientation
   1. Production era- early years of US to 1920s- buyers accept virtually any goods
   2. Sales era- 1920s -1960s- manufacturers produced more goods than buyers could
      consume; competition grew; firms hired more salespeople
   3. Marketing concept era- idea that an organization should strive to satisfy the
      needs of consumers while also trying to achieve the org’s goals (1960s)
   - market orientation- focusing organizational efforts to collect and use info about
      customers’ needs to create customer value
   4. Customer era- today- firms seek continuously to satisfy the high expectations of
      customers; this focus has led to customer relationship management (CRM), the
      process of identifying prospective buyers, understanding them, and developing
      favorable perceptions of the org and its offerings so that buyers will choose them
      in the marketplace

Ethics and Social Responsibility: Balancing Interests
    - social responsibility- individuals and orgs are accountable to a larger society;
        well-being of a society should be recognized in an org’s marketing decisions
    - societal marketing concept- view that orgs should satisfy needs of consumers in
        a way that provides for society’s well- being (some products made from recycled
        plastic)

   -   business firms, nonprofits, and politicians all market
   -   goods, services, and ideas are marketed
   -   both individuals and orgs buy and use goods and services that are marketed
   -   ultimate consume rs- people who use the goods and services purchased for a
       household
   -   organizational buyers- manufacturers, wholesalers, retailers, and govt agencies
       that buy goods and services for their own use or resale
   -   three groups benefit from effective marketing: consumers who buy, orgs that sell,
       and society as a whole
   -   marketing creates utility- the benefits or customer value received by users of the
       product; utility is the result of the marketing exchange process
           o form utility- production of good or service
           o place utility- having the offering available where needed
           o time utility- having it available when needed
           o possession utility- making it easy to purchase through provision of credit
               cards or financial arrangements
   -   marketing creates its utilities by bridging space (place) and hours (time) to
       provide products (form) for consumers to own and use (possession).

Rollerblade used a “guerilla marketing” campaign to get the word out- used a tiny budget
to develop attention-getting promos to make people aware of the skates and try them

				
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