Managing Profitable Customer Relationships

Welcome to the exciting world of marketing. In this chapter, to start you off, we will first introduce you to the basic concepts. We’ll start with a simple question: What is marketing? Simply put, marketing is managing profitable customer relationships. The aim of marketing is to create value for customers and to capture value in return. Chapter 1 is organized around five steps in the marketing process—from understanding customer needs, to designing customer-driven marketing strategies and programs, to building customer relationships and capturing value for the firm. Understanding these basic concepts, and forming your own ideas about what they really mean to you, will give you a solid foundation for all that follows. To set the stage, let’s first look at NASCAR. In only a few years, NASCAR has swiftly evolved from a pastime for beerguzzling Bubbas into a national marketing phenomenon. How? By creating highoctane value for its millions of fans. In return, NASCAR captures value from these fans, both for itself and for its many sponsors. Read on and see how NASCAR does it. When you think of NASCAR, do you think of tobacco-spitting rednecks and run-down race tracks? Think again! These days, NASCAR (the National Association for Stock Car Auto Racing) is much, much more. In fact, it’s one great marketing organization. And for fans, NASCAR is a lot more than stock car races. It’s a high-octane, totally involving experience. As for the stereotypes, throw them away. NASCAR is now the second-highest rated regular season sport on TV—only the NFL draws more viewers—and races are seen in 150 countries in 23 languages. NASCAR fans are young, affluent, and decidedly family oriented—40 percent are women. What’s more, they are 75 million strong—according to one survey, one in three Americans follows NASCAR. Most important, fans are passionate about NASCAR. A hardcore NASCAR fan spends nearly $700 a year on NASCAR-related clothing, collectibles, and other items. NASCAR has even become a cultural force, as politicians scramble to gain the favor of a powerful demographic dubbed “NASCAR dads.” What’s NASCAR’s secret? Its incredible success results from a single-minded focus: creating lasting customer relationships. For fans, the NASCAR relationship develops through a careful blend of live racing events, abundant media coverage, and compelling Web sites. Each year, fans experience the adrenalin-charged, heart-stopping excitement of NASCAR racing firsthand by attending national tours to some two dozen tracks around the country. NASCAR races attract the largest crowds of any U.S. sporting event. About 240,000 people attended the recent Daytona 500, far more than attended the Super Bowl, and the Allstate Brickyard 400 sells out its more than 300,000 seats each year. Last year alone, NASCAR events captured 306 million television viewers. At these events, fans hold tailgate parties, camp and cook out, watch the cars roar around the track, meet the drivers, and swap stories with other NASCAR enthusiasts. Track facilities even include RV parks next to and right inside the racing oval. Marvels one sponsor, “[In] what other sport can you drive your beat-up RV or camper into the stadium and sit on it to watch the race?” NASCAR really cares about its customers and goes out of its way to show them a good time. For example, rather than fleecing fans with over-priced food and beer, NASCAR tracks encourage fans to bring their own. Such actions mean that NASCAR might lose a sale today, but it will keep the customer tomorrow. To further the customer relationship, NASCAR makes the sport a wholesome family affair. The environment is safe for kids—uniformed security guards patrol the Part 1: Defining Marketing and the Marketing Process