Third Edition

Roger A. Kerin
Lau Geok Theng
Steven W. Hartley
William Rudelius

Copyright © 2015 by McGraw-Hill Education. All rights reserved.

Copyright © 2015 by McGraw-Hill Education. All Rights Reserved.
LEARNING OBJECTIVES
After reading Chapter 1, you should be able to :

LO1-1
Define marketing and identify the diverse factors
that influence marketing actions.

LO1-2 Explain how marketing discovers and satisfies

consumer needs.

LO1-3
Distinguish between marketing mix factors and
environmental forces.

1-2

Introduction – Creating Customer Relationships & Value through Marketing

LEARNING OBJECTIVES
After reading Chapter 1, you should be able to :

LO1-4
Explain how organizations build strong customer
relationships and customer value through marketing.

LO1-5 Describe how today’s customer relationship era

differs from prior eras.

1-3

Introduction – Creating Customer Relationships & Value through Marketing

 Alibaba
Trailblazing E-Commerce Market in China

1-4

Opening Story
 Anticipating Market Needs
Alibaba Riding on First Wave of China’s Integration Into
Global Economy

1-5

Opening Story
 What is Marketing?
Definitions and Examples

 You are already a marketing expert

 Marketing is not easy

1-6
LO1-1
Defining Marketing
 What is Marketing?
Marketing is about Delivering Benefits

 Marketing: Using exchanges to satisfy

needs

 The diverse factors influencing

marketing activities

1-7
LO1-1
Defining Marketing
 What is Marketing?
Diverse Factors influence Marketing Activities

 Organization

 Society

 Environmental Forces

1-8
LO1-1
Defining Marketing
 What is Marketing?
How Marketing relates to people, groups and forces

1-9
LO1-1
Defining Marketing
 What is Marketing?
Requirements for ‘Marketing’

 Parties with unsatisfied needs

 A desire and ability to be satisfied

 A way for the parties to communicate

 Something to exchange

1-10
LO1-1
Defining Marketing
 Discovering Consumer Needs
How Marketing discovers Consumer Needs

 Customers may not know what they

need or want

 They may not know how to describe

what they want

 We must ask the right questions

 Chapter 9: Market Segmentation

1-11
LO1-2
Consumer Needs
 New Product Challenges
How Marketing discovers Consumer Needs

 Most new products fail

 The challenge of new products is to:

 Learn from the past

 Offer consumers a new benefit

1-12
LO1-2
Consumer Needs
 Benefits & Show-Stoppers
Dr. Care Vanilla Mint Aerosol Toothpaste

1-13
LO1-2
Consumer Needs
 Benefits &Show-Stoppers
Transition: A Flying Car

1-14
LO1-2
Consumer Needs
 Benefits & Show-Stoppers
Diet Cola with Ginseng & Extra Caffeine

1-15
LO1-2
Consumer Needs
 Needs vs Wants
An important distinction

 Need

 Want

 Does marketing persuade people to

buy the “wrong” things?
 Can marketers create needs?

1-16
LO1-2
Consumer Needs
 What is a Market?
Who is a ‘consumer’?

Potential
consumers

Potential
consumers
Whole population

Potential consumers = People with both the desire

and the ability to buy a specific product
1-17
LO1-2
Consumer Needs
 Discovering Consumer Needs
The first task is to discover consumer needs

1-18
LO1-2
Consumer Needs
 The Marketing Mix : 4 P’s
Controllable Market Factors

 Target Market : 1 or more specific potential

consumer groups

 The 4 P’s: Controllable marketing mix factors

• Product • Promotion

• Price $399 • Place

1-19
LO1-3
Marketing Mix
 Environmental Forces
Uncontrollable Market Factors

 Uncontrollable environmental forces

(More to be discussed in Chapter 3)

• Social
• Economic
• Technological
• Regulatory

1-20
LO1-3
Marketing Mix
 Customer Relationships
What is Value?

Sheng Siong: Low-priced, Market Place: Premium-

self-service, no-frills priced, full-service with a
concept wide range of international
brands
1-21
LO1-4
Customer Relationships
 Relationship Marketing
As a Marketing Program

 Global competition, customer value

and customer relationships

 Relationship marketing

• Easy to understand
• Difficult to implement
• Building relationships with consumers
 Marketing program – integrating marketing mix
to provide a good, services or idea
1-22
LO1-4
Customer Relationships
 Creating Value
The second task is to satisfy consumer needs

1-23
LO1-4
Customer Relationships
 UNIQLO’s Marketing Program
Satisfying Consumer Needs

 Knowing customers and understanding

their needs and wants

 Developing core strategy and concept

 Assembling right mix of product or

service, price, promotion and place

1-24
LO1-4
Customer Relationships
 UNIQLO’s Marketing Program
3 Distinct Shopper Segments

1-25
LO1-4
Customer Relationships
 Different Segments, Different Needs
Distinct Products for Distinct

●Casual ●Fashionistas

1-26
LO1-4
Customer Relationships
 Evolution of Market Orientation
How Marketing became Important

 Production era
 Sales era
 Marketing concept era
 Customer relationship era
• Market orientation
• Customer relationship management (CRM)

1-27
LO1-5
The Era of Customer Relationship Marketing
 Evolution of Market Orientation
How Marketing became Important

 Production era
• Focused on production;
goods would ‘sell themselves’
• Few products so buyers would accept
anything
• E.g. 1910 Sanyo – radios, bicycle lamps
 Sales era
• More products available; difficult to sell
• Hire salespeople to increase sales
1-28
LO1-5
The Era of Customer Relationship Marketing
 Evolution of Market Orientation
How Marketing became Important

 Marketing concept era

• Shift from firm-oriented production
to consumer-orientated research/marketing
• ‘The marketing concept’
1. Finding out what consumers want
2. Satisfying their needs by selling them that
• Marketing occurs before production, not
after

1-29
LO1-5
The Era of Customer Relationship Marketing
 Evolution of Market Orientation
How Marketing became Important

 Customer relationship era

• Market orientation
1. Continuously determine consumer needs
2. Share info across departments
3. Create customer value
• Customer relationship management
• Developing favourable long-term relationships
rather than one-off transactional purchases

1-30
LO1-5
The Era of Customer Relationship Marketing
 Evolution of Market Orientation
Four Eras in the History of American Businesses

1-31
LO1-5
The Era of Customer Relationship Marketing
 Ethics & Social Responsibility
Importance of Marketing

 Ethics

 Social responsibility

• Societal marketing concept

• Macromarketing

• Micromarketing

1-32
LO1-5
The Era of Customer Relationship Marketing
 Ethics & Social Responsibility
Importance of Marketing

 Societal marketing concept

• Satisfy consumer needs without compromising
society, e.g. recycled bottles

 Macromarketing
• Study of how marketing affects a nation/society,
e.g. pollution, advertising

 Micromarketing
• Study of how organisational marketing activities
benefit consumers
1-33
LO1-5
The Era of Customer Relationship Marketing
 Breadth and Depth of Marketing
Who Markets & What is Marketed

 Who markets?

 What is marketed?

• Goods • Services • Ideas

1-34
LO1-5
Marketing and Utility
 Breadth and Depth of Marketing
Who Benefits, and How?

 Who benefits?
 Who buys & uses what is marketed?
• Ultimate consumers
• Organizational buyers
 How do consumers benefit?
• Utility
 Form utility  Time utility
 Place utility  Possession utility
1-35
LO1-5
Marketing and Utility