Marketing lecture Chapter 1

Marketing in a Changing World: Creating Customer Value and Satisfaction Emergence of the Marketing Concept • Occurred during the shift from a sellers’ market to a buyer’s market after World War II. • Created the need for greater consumer orientation. • Business philosophy incorporating the marketing concept that  emphasizes first determining unmet consumer needs and then  designing a system for satisfying them. • Marketing concept Companywide consumer orientation for achieving longterm success. • Example: Apple computer, which polls show “delivers great consumer  experiences with outstanding design.” • Relationship marketing Developing and maintaining of longterm, costeffective relationships with individual customers, suppliers, employees, and other partners for mutual benefit.

Chapter

1

Marketing in a Changing World:

Creating Customer Value and

Satisfaction

What is Marketing?

• Process by which individuals and

groups obtain what they need and need want through creating and exchanging

products

products and value with others.

• More simply: Marketing is the delivery

of customer satisfaction at a profit

Core Marketing

Concepts

Products and Services

Value, satisfaction,

and quality

Needs, wants, and demands

Exchange, transactions, and relationships Markets

Core Marketing Concepts

Emergence of the Marketing Concept

• Occurred during the shift from a sellers’ market to a buyer’s market after World War II

• Created the need for greater consumer orientation

• Business philosophy incorporating the marketing concept that

emphasizes first determining unmet consumer needs and then

designing a system for satisfying them

• Marketing concept Company-wide consumer orientation for achieving long-term success

• Example: Apple computer, which polls show “delivers great consumer experiences with outstanding design.”

• Relationship marketing Developing and maintaining of long-term, effective relationships with individual customers, suppliers, employees, and other partners for mutual benefit

cost-What Motivates a Consumer

to Take Action?

• Needs - state of felt deprivation for basic items such

as food and clothing and complex needs such as for belonging i.e I am thirsty

• Wants - form that a human need takes as shaped

by culture and individual personality i.e I want a Coca-Cola.

• Demands - human wants backed by buying power Demands

i.e I have money to buy a Coca-Cola.

What Will Satisfy Consumer’s

Needs and Wants?

• Products Products - anything

that can be offered to a

market for attention,

acquisition, use or

consumption and that

might satisfy a need or

sale that are essentially intangible and don’t result in the ownership of anything

• Examples : banking, airlines, haircuts, and hotels.

CONVERTING NEEDS TO WANTS

•Effective marketing focuses on the benefits resulting from goods and services

 Example: Need for a pair of pants converted to a desire

for jeans.

• Companies must pay attention to what consumers want.

  Example: Demand for cell phones and wireless

services.

 Number of Wi-Fi Internet users grew 57 percent in a

recent year.

AVOIDING MARKETING MYOPIA

Marketing myopia Management’s failure to recognize the scope of its business.

How Do Consumers Choose

Choose Among Products and

Services?

• Customer Value - benefit that the customer

gains from owning and using a product compared to the cost of obtaining the product.

• Customer Satisfaction - depends on the

product’s perceived performance in delivering value relative to a buyer’s expectations

Linked to Quality and Total Quality Management (TQM).

How do Consumers Obtain

Products and Services?

• Exchanges - act of obtaining a desired object from

someone by offering something in return.

• Transactions - trade of values between parties

Usually involves money and a response.

• Relationships - building long-term relationships

with consumers, distributors, dealers, and

suppliers.

Who Purchases Products

and Services?

Market - buyers who share a particular need

or want that can

be satisfied by a company’s products

or services

Actual Buyers

Potential Buyers

Modern Marketing System

Suppliers

End User Market

Marketing Intermediaries

Competitors (Marketer) Company

Marketing Management

Marketing Management Implementing programs to create exchanges with target buyers to achieve organizational

Societal Marketing Concept

• Consumers favor products that are available and highly affordable

•Improve production and distribution

•Consumers favor products that offer the most quality, performance, and innovative features

•Consumers will buy products only if the company promotes/ sells these product

•Focuses on needs/ wants of target markets & delivering satisfaction better than competitors

•Focuses on needs/ wants of target

markets & delivering superior value

•Society’s well-being

Marketing & Sales

Market Customer Needs Integrated Marketing through Profits

Satisfaction

The Selling Concept

The Marketing Concept Starting

Point Focus Means Ends

Societal Marketing Concept

Society (Human Welfare )

Consumers

(Profits)

Societal Marketing Concept

Emerging Challenges

Nonprofit Marketing

New Marketing Landscape &

Information Technology

Ethical Concerns Globalizatio n

Changing World Economy

New Marketing Challenges

EXPANDING THE TRADITIONAL

not-for-• Operate in public sector and private sector

• Not-for-profits sometimes promote their messages through

partnerships with commercial firms

 Example: America’s Second Harvest receiving assistance from food manufacturers and grocery stores

NONTRADITIONAL MARKETING

CREATIVITY AND CRITICAL

THINKING

• The challenges of the marketplace require critical thinking and creativity.

• Creativity produces original ideas or knowledge.

 Example: George de Mestral inventing Velcro after noticing burrs that stuck to his wool socks.

• Critical thinking determines the authenticity, accuracy, and worth of information, knowledge, claims, and arguments.

 Example: Microsoft forming an Internet research lab to develop and evaluate new products.

TECHNOLOGY REVOLUTION IN

MARKETING• Technology—The business application of knowledge based on

scientific discoveries, inventions, and innovations

• Communications technology has revolutionized the way we do

business

More than half of all U.S households have at least one

computer

Internet sales in U.S topped $143 billion in a recent year

• Technology also opens new markets

INTERACTIVE AND INTERNET MARKETING

• Interactive, customizable technology that gives users quick access

to information

• Interactive marketing—Customer controls amount and type of

information received from a marketer

FROM TRANSACTION-BASED MARKETING TO

RELATIONSHIP MARKETING

• View of marketing as transaction-based is being

replaced by a longer-term approach

• Focus is on developing customers into repeat, loyal customers

• Over long-term, increases lifetime value of the

DEVELOPING PARTNERSHIPS AND

STRATEGIC ALLIANCES

• Relationship marketing also applies to business-to-business

relationships with suppliers, distributors, and other partners

• Strategic alliances Partnerships in which two or more companies combine resources and capital to create competitive advantages in a new market

Example: Yahoo! and TiVo blending some of their services

• Not-for-profits often raise awareness and funds through strategic partnerships

COSTS AND FUNCTIONS OF

MAREKTING

• Marketing costs are typically 40 to 60 percent of total product costs

• Marketing performs eight universal functions:

Exchange functions—buying and selling

Physical distribution functions—transporting and storing

Facilitating functions—standardizing and grading, financing, risk taking, and securing marketing information

ETHICS AND SOCIAL

RESPONSIBILITY:

DOING WELL BY DOING GOOD

• Ethics—Moral standards of behavior expected in a society.

• Most businesspeople follow ethical practices.

• Social responsibility—Marketing philosophies, policies,

procedures, and actions whose primary objective is to enhance society.

Often takes the form of philanthropy.

awards annually to corporations that demonstrate a

commitment to social responsibility.

• Kotler, P., & Armstrong, G., (1999), Principles of Marketing,

8th Ed, Prentice Hall International, UK.

• Boone, LE., & Kurtz, DL., (2007), Contemporary Marketing

13th Ed, South-Western, USA.