SLIDE principles of marketing chapter 1

LEARNING OBJECTIVES1.1 Core marketplace concepts • Marketing and the marketing process • Needs, wants and demands • Market offerings • Value and satisfaction • Exchanges and relationship

WHAT IS MARKETING?

LEARNING OBJECTIVES

1.1 Core marketplace concepts

• Marketing and the marketing process

• Needs, wants and demands

• Market offerings

• Value and satisfaction

• Exchanges and relationships

• Markets

1.2 Marketing management orientations

1.3 Customer relationship management

1.4 Major marketing trends and forces

• Definitions

“The management process which identifies,

anticipates, and supplies customer requirements

efficiently and profitably”

UK’s Chartered Institute of Marketing

• Definitions

“The process of planning and executing the conception, pricing,

promotion, and distribution of ideas, goods, and services to

create exchanges that satisfy individual and organizational

goals”

American Marketing Association, 1985

-“Marketing is an organizational function and a set of

processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders”.

American Marketing Association, 2004

• Definitions

“Broadly defined, marketing is a

social and managerial process by

which individuals and organizations

obtain what they need and want

through creating and exchanging

value with others.”

Philip Kotler, 2012

-“In a business context, marketing is a

the process by which companies engage customers, build strong customer

relationships, and create customer value

in order to capture value from customers

 Marketing satisfies customer needs efficiently and profitably (exchange).

 Marketing still takes place (customer relationship)

• The marketing process (Kotler, 2012)

1.1 CORE MARKETPLACE CONCEPTS

Customer Needs, Wants and

NEEDS, WANTS, DEMANDS

• States of deprivation

• Physical—food, clothing, warmth, safety

• Social—belonging and affection

• Individual—knowledge and self-expressionNeeds

• Form that needs take as they are shaped by

culture and individual personality

Wants

• Wants backed by buying powerDemands

MARKET OFFERINGS

• Market offerings

– Some combination of products, services,

information, or experiences offered to a

market to satisfy a need or want

MARKET OFFERINGS

• Marketing myopia

– The mistake of paying more attention

to the specific products a company offers than to the benefits and

experiences produced by these products

CUSTOMER VALUE & SATISFACTION

• Customer – perceived value

– The customer’s evaluation of

the difference between all the

benefits and all the costs of a

marketing offer relative to

those of competing offers

CUSTOMER VALUE & SATISFACTION

• Customer satisfaction

– The extent to which a product’s

perceived performance matches

a buyer’s expectations

EXCHANGES & RELATIONSHIPS

• Exchange

– The act of obtaining a

desired object from

someone by offering

something in return

MARKETING MANAGEMENT

– Marketing management is the analysis, planning,

implementation and control of programmes designed to bring about desired exchanges with target markets for the purpose

of achieving organizational objectives

– The aim is to engage, keep, and grow target customers by

creating, delivering, and communicating superior customer

value

MARKETING MANAGEMENT ORIENTATIONS

Production concept

Product concept

Selling concept

Marketing concept

Societal concept

MARKETING MANAGEMENT ORIENTATIONS

Success depends on low production costs, highly efficient processes, and mass distribution.

Success depends on creating the best, most innovative product for the lowest price.

Success depends on a good sales team with the right tools and incentives

Success depends on doing better than competitors at understanding, creating, delivering, and communicating value to their target customers.

Marketing decisions should consider consumers’ wants, the company’s requirements (profits), and society’s long-run

MARKETING MANAGEMENT ORIENTATIONS

products

Selling and promoting

Profits through sales volumes

Market Customer needs Integrated marketing

Profits through customer satisfaction

MARKETING MANAGEMENT ORIENTATIONS

SOCIETY

(Human welfare)

Societal marketing concept

CONSUMERS

(Want satisfaction)

COMPANY

(Profits)

• The marketing process (Kotler, 2012)

• The marketing process (Kotler, 2012)

Pricing strategies| New

product pricing strategies |

Product mix pricing P

Advertising | Personal selling | Sales promotion| PR

| Direct marketing

Marketing channels | Channel design decisions

| Channel management

P

• The marketing process (Kotler, 2012)

CUSTOMER RELATIONSHIP MANAGEMENT

– In the broadest sense, customer

relationship management (CRM) is the

overall process of building and maintaining

profitable customer relationships by

delivering superior customer value and

satisfaction

– On average, it costs 5-10 times as much to

attract a new customer as it does to keep a

current customer satisfied

CUSTOMER RELATIONSHIP MANAGEMENT

• Customer relationship levels

The seller contacts the customer shortly after the sale to inquire whether the product meets expectations.

The seller regularly contacts

to discuss the use

of the product, also asks for feedback if the product or service

The company works continuously with the customer to ensure that the customer gets even more out of

CUSTOMER RELATIONSHIP MANAGEMENT

CUSTOMER RELATIONSHIP MANAGEMENT

• Customer relationship tools

Structural ties

Social benefits

Financial benefits Better price; Special discount; Rewards program

Personalization; Special gifts or greeting cards on special occasions; Customers’ preferences

Customer service; Speed of service

PARTNER RELATIONSHIP MANAGEMENT

• Partner Relationship Management – PRM

– Working closely with partners in other company

departments and outside the company to jointly bring

greater value to customers

– Internal: Functional departments

– External: Suppliers, Intermediaries, Competitors

CUSTOMER LOYALTY

• Customer loyalty

– A deeply held commitment to rebuy or re-patronize a preferred product or service consistently in the future, thereby causing

repetitive same-brand or same brand-set purchasing, despite

situational influences and marketing efforts that have the

potential to cause switching behavior (Oliver, 1999)

• Conceptualization of loyalty

– Behavioral loyalty

– Attitudinal loyalty

CURRENT MARKETING TRENDS

Create value for customers and build customer relationships

Construct an integrated marketing

program

Engage customers, build profitable relationships

Capture value from customers to create profits and customer

Product Customer

relationship management

Create satisfied, loyal customers

Manage marketing

information and

customer data

Partnership relationship management

Capture customer lifetime value

Decide on a value proposition:

differential and positioning

Increase share of market and share