1. What is Marketing
Dr. Vesselin Blagoev

2. A simple model of the mktg process
Understand the marketplace and customer needs and wants
Design a customer-driven marketing strategy
Construct an
Integrated marketing program that delivers superior value
Build profitable relationships and create customer delight
Capture value from customers
to create profits and customer equity

3. Needs
Markets
Wants
Core
Marketing
Terms
Transactions
Demand
Exchange
Products

4. Needs
Need
A sense that something necessary is missing, a state of felt deprivation.
Basic physical needs for food, clothing, warmth, and safety;
Social needs for belonging and affection;
Individual needs for knowledge and self-expression.

6. Wants
Wants
The manner in which individuals seek to satisfy a need as consumer decision making is influenced by individual tastes and social factors
The form taken by human needs as they are shaped by culture and individual personality

7. Market offering
Some combination of products, services, information, or experiences offered to a market to satisfy a need or want (Kotler, 2008)

8. 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 (Armstrong and Kotler, 2011, p.35)

9. Customer perceived value
The customer’s evaluation of the difference between all the benefits and all the costs of a market offering relative to those of competing offers (Armstrong and Kotler, 2011, p.41)

10. Customer satisfaction
The extent to which a product’s perceived performance and value matches a buyer’s expectations

11. Customer equity
The total combined customer lifetime values of all the company’s customers (Armstrong and Kotler, 2011, p.50)

12. Customer relationships management
The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction (Armstrong and Kotler, 2011, p.41)

13. Demand and Supply Demand Quantity demanded
The ability and willingness of consumers to purchase a product
Quantity demanded
Maximum quantity of a good that buyers are willing and able to buy at a given price (over a fixed period of time)

14. Demand The Law of Diminishing Demand:
If the price of a product is raised,
a smaller quantity will be demanded
and if the price of a product is lowered,
a greater quantity will be demanded

15. Demand Curve
Price P1 P2
Quantity Q1 Q2

16. Demand curve
Price P1 P2
Quantity Q1 Q2

17. Demand curve
The general demand relationships are typical for all products
A particular demand curve has meaning only for a particular market

18. Elastic demand Elastic demand means that if prices are dropped,
the quantity demanded will increase enough to increase total revenue
Inelastic demand ?

19. Elastic demand
Price
Q=Units demanded

20. Inelastic demand
Price
Q=Units demanded

21. Demand curve
The whole demand curve is almost never only elastic, or only inelastic.
The elasticity refers to the change in total revenue between two points on the curve – not along the whole curve

22. Demand and Supply Supply Quantity supplied
The ability and willingness of producers to provide wanted goods and services
Quantity supplied
Maximum quantity of a good that sellers are willing and able to supply at a given price (over a fixed period of time)

23. Demand & Supply
Demand
Supply
Equilibrium point

24. Mktg- Information Mgmt
Marketing functions
Marketing activities can be categorized within several functions
Product / Service Mgmt
Distribution
Pricing
Mktg Communications
Financing
Mktg- Information Mgmt
Selling
Marketing Education Resource Center (2000), Columbus, Ohio

25. The operational functions of marketing
Advertising
Sales promotion
Public relations
Stockholding
Personal selling
The operational
functions
of marketing
Servicing
Financing
Risk-taking
Buying
Transporting
Forecasting
Market research
Publicity
Pricing
Merchandising
Branding

26. Product
A product is anything that can be offered to a market for attention, acquisition, use, or consumption and might satisfy a need or want (Armstrong and Kotler, 2011, p.237)

27. Market
A group of potential buyers with common needs or problems that can be met by specific products or services
Consumer market
Industrial market
Reseller market
Institutional market
Customer
Consumer (user)

28. Markets Consumer Organizational
Individuals who purchase to benefit from consumption and not for the main purpose of making a profit
Buyers who purchase for resale, direct use in producing the goods or in general daily use in a business

29. Markets Open markets Regulated markets Unregulated markets
De-regulated markets

30. Open markets Single standardized product Many buyers Many sellers
Markets with all of the following characteristics:
Single standardized product
Many buyers
Many sellers
Buyers and sellers have equal access to all available information relevant to the market.

31. Open markets
The products are rarely homogeneous. Apples vary by variety and packaging making comparison by the buyer difficult. It affects Condition 1.
The numbers of potential buyers and the demand for products is constantly changing. It affects Condition 2.

32. Open markets
The individual purchaser usually has a limited choice of supplier. What about Condition 3 ?
The buyers usually do not have as much information about the market as does the supplier. It affects Condition 4.

33. Regulated markets
The regulations governing an open market are designed to ensure that it is able to operate with none of the participants having an unfair advantage over the others.
Regulated markets recognize that there is a lack of balance between the parties and therefore this type of market has rules that are intended to ensure a degree of fair trading.

34. Unregulated and Deregulated markets
Unregulated markets :
street market
The buyer is ‘on their own’. Caveat emptor!
De-regulated markets : Removal of artificial monopoly restrictions in order to encourage free competition and increase customers’ choice.
telecommunications; e-commerce

35. Exchange is :
A marketing transaction, in which the buyer gives something of value to the seller in return for goods or services

36. A simple exchange process
Something of value
Goods, services, benefits
Supplier
Customer
Money, exchange goods
Something of value

37. 10 exchanges
Pots
Fruits
Meat
Baskets
Knives

38. A market – 5 exchanges Pots Fruits Meat Baskets Knives Central Market
Middleman
Fruits
Meat
Baskets
Knives

39. Exchanges Involving Intermediaries
Retailer
Consumer
Producer
Wholesaler

40. Definition 1
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 (AMA,2005)

41. Definition 2
Marketing is the process by which the companies create value for customers and build strong customer relationships in order to capture value from customers in return
Armstrong and Kotler (2011)

42. Definition 3
Marketing is the management process responsible for identifying, anticipating and satisfying customers’ requirements profitably
British Chartered Institute of Marketing, UK

43. Definitions 4 and 5
Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others (Kotler et al, 2005)
Marketing is the study of exchange processes especially those associated with the provision of goods and services (Adcock et al, 2001)

44. Definitions 6 and 7
Marketing is the process of planning and executing the various activities, which are involved in selling goods, services, or ideas and which lead to an exchange between a seller and a buyer (Keegan et al, 1992)
Marketing is a human activity directed at satisfying needs and wants through exchange processes (Kotler, 2001)

45. Definitions 8
Marketing is the management process that seeks to maximise returns to shareholders by developing relationships with valued customers and creating a competitive advantage
(Doyle, 2004)

46. Three major goals Satisfaction of customer needs
Attainment of a competitive advantage over the rivals
Increasing the value of the company for the shareholders

47. Selling vs. Marketing Concepts

48. Marketing mix

49. Influences on Decisions of Companies
Uncontrollable market influences
Controllable
company
decisions
Product
Place
Price
Promotion

50. Marketing mix Product Price Marketing mix Target market Place
Quality, Features, Options, Style,
Brand name, Packaging, Sizes, Warranties
Product
List price, Discounts,
Allowances, Payment
Terms, Credit terms
Marketing
mix
Price
Target market
Channels, Locations,
Inventory, Transport
Place
Promotion
Advertising, Personal selling, Sales
Promotion, PR

51. Elements of Marketing Mix – 4P
PROMOTION
PLACE
PRICE
Fact Finding
& Analysis
Physical
Handling
Servicing
Display
Packaging
Promotions
Advertising
Personal
Selling
Channels of
Distribution
Branding
Pricing
Product
Planning
PRODUCT
Borden 1964
McCarthy 1978
Source: Based on Borden, N. (1964) ‘The concept of the marketing mix’, Journal of Advertising Research, June, 2–7; McCarthy, E.J. (1978) Basic Marketing: A Managerial Approach, 6th edn. Homewood, IL: Richard D. Irwin

52. Marketing Mix – 4P New product development Brand management
Features, Benefits
Packaging & After-sales
Channel management
Retail location
Retail image
Logistics
PROMOTION
PLACE
PRICE
PRODUCT
Costs, Profit,
Liquidity
Competitiveness
Value, Incentives
Marketing
communications mix,
Integrated
communications

53. 5S of e-marketing objectives
Wider distribution, promotion and sales
Sell
Extent the brand online
Adding value by extra benefits online
Sizzle
Serve
Save by using the online services
Save
Speak
Asking quest, dialog, use web

54. 6C of Online Value Proposition The Chartered Institute of Marketing
Content
Custo-
misation
Cost
reduction
Community
Choice
Convenience

55. 7P of Customer Service & Mktg Mix
Price
Promotion
Physical
Evidence
Processes
People
Place
Product
Source: Adapted from Christopher, M., Payne, A. and Ballantyne, D. (1991) Relationship Marketing. Oxford: Butterworth Heinemann

56. From ‘4Ps’ to ‘4Cs’ COMMUNICATION CONVENIENCE COST TO CUSTOMER
NEEDS/WANTS
PROMOTION
PLACE
PRICE
PRODUCT/
SERVICE
Source: Based on Kotler, P., Armstrong, G., Saunders, J. and Wing, V. (1999) Principles of Marketing, 2nd European Edition. New York: Prentice Hall

57. Value & Types of Utility
Form
Place
Utility
Value that comes
from satisfying
human needs
Time
Possession

58. Value & Types of Utility
Form Utility: results from changes in the tangible parts of the product or service, i.e. made of more durable material
Time Utility: available when the customer needs it
Place Utility: Location, location, location
Possession Utility: affordability or lack of resources. Using credit options, payment in installments

59. Customer value is formed by
Perceived benefits
Product
benefits
Relational
benefits
Service
benefits
Image
benefits
Perceived sacrifice
Monetary
costs
Time
costs
Energy
costs
Psycholo-
gical costs
Other
costs

60. Income and purchasing power
Disposable income
Money that consumers have left after paying taxes
Purchasing power (PP)
The potential ability of consumers to buy goods and services
PP=Disposable income + Available credit
Discretionary income
Money that consumers have left after paying taxes and making essential personal and household expenditures

61. Marketing Concept
Because the purpose of business is to create and keep customers, it has only two central functions – marketing and innovation. The basic function of marketing is to attract and retain customers at a profit
Peter Drucker

62. The Marketing Concept
The marketing concept, also referred to as marketing orientation, can be expressed as:
The achievement of corporate goals through meeting and exceeding customer needs better than the competition

63. Value-Based Marketing
Marketing is the management process that seeks to maximize returns to shareholders by developing relationships with valued customers and creating a competitive advantage
(Doyle, 2009)

64. The Changing Role of Mktg
Past
Future
Objective of Mktg
Create customer value
Create shareholder value
Marketing strategy
Increase market share
Develop and manage marketing assets
Assumptions
Positive market performance leads to positive fin. results
Marketing strategies need to be tested in value terms
Contribution
Knowledge of buyers,
competitors, channels
Knowledge how to lever mktg to increase shareholder value
Focus of marketing
Marketing orientation
General management

65. The Changing Role of Mktg
Past
Future
Concept of Assets
Tangible
Intangible
Rationale
Improves profits
Increases shareholder value
Performance measures
Market share, customer satisfaction, return on sales and investment
Shareholder value: discounted cash flows

66. Marketing orientations
Production orientation
Product orientation
Sales (selling) orientation
Classical marketing orientation
Societal marketing orientation
Relationship marketing
Value-Based Marketing

67. Production orientation
capabilities
Manufacture
product
Aggressive
sales effort
Customers

68. Product orientation
New product
development
Manufacture
product
Aggressive
sales efforts
Customers
Develop a better mousetrap and the world will beat a path to your door

69. Sales orientation Manufacture product Aggressive advertising
sales effort
Customers

70. Marketing orientation
Customer
needs
Potential
Market
opportunities
Marketing
products and
services
Customers

71. Marketing orientation
Customer oriented No
Yes No
Product orientation
Customer orientation
Competition oriented
Marketing orientation
Competitor orientation
Yes

72. Societal marketing concept
It is based on the understanding that the customers’ needs must be satisfied only if they correspond to the long-term interests of the society

73. Marketing orientations
Profit driver
Time
frame
Characteristics
Production
Production methods
Until 1960
Improve production and distribution to reduce costs
Product
Quality of product
Until 1970
Quality is paramount. Focus on product, not on needs
Selling
Selling methods
Effective selling and promotion are the major drivers to success
Marketing
Needs & Wants
1970+
Focus of satisfying the needs and wants

74. Marketing orientations
Profit driver
Time
frame
Characteristics
Societal marketing
Benefit to society
1990+
Same as marketing with the proviso that no harm will be done to society or nature
Relationship
marketing
Building and retaining good relations with the customers
1980+
Best possible attention, customer services and therefore build customers’ loyalty
Value-Based marketing
Value of the shares
2000+
Do everything to increase the value of the shares

75. Ethics and social responsibility
Ethics: Moral principles and values that govern the actions and decisions of an individual or group. They serve as guidelines on how to act rightly and justify when faced with moral dilemmas
Laws: Society’s values and standards that are enforceable in the courts
Can make marketing decisions that are legal but unethical
Can make marketing decisions that are illegal but ethical

76. Consumer Bill of Rights (1962)
Right to safety
Right to be informed
Right to choose
Right to be heard

77. Laws reduce confusion Socially responsible packaging:
Federal Fair Packaging and Labeling Act (USA, 1966) – the consumer goods must be clearly labeled in easy to understand terms.
Do you know the main points of the law in Bulgaria?

78. Consumerism
A social movement that seeks to increase the rights and powers of consumers
Nader R.(1966) Unsafe at any speed, Pocket Books, NY

79. Ethical exchange relationships
Both buyer and seller should be better off after a transaction
Ethical choices are based on personal moral philosophy
Moral idealism
Utilitarianism
“Justice” perspective
Social responsibility

80. Supply >> Demand
SOCIETAL MARKETING
Balance the interests
of the company
and the society
LATE MARKETING
ERA
Supply >> Demand
Demand management
EARLY MARKETING
ERA
Supply > Demand
Stiff competition
SELLING ERA
Demand = Supply
Weak competition
PRODUCTION ERA
Demand > Supply
Producers run the
show
BARTER ERA
Self-supply
Markets do not exist
History of Marketing

81. History of Marketing MARKETING RELATIONSHIPS SOCIETAL MARKETING
Supply >> Demand
Know thy customer
SOCIETAL MARKETING
Balance the interests
of the company
and the society
LATE MARKETING
ERA
Supply >> Demand
Demand management
EARLY MARKETING
ERA
Supply > Demand
Stiff competition
SELLING ERA
Demand = Supply
Weak competition
History of Marketing

82. Why the marketing is important?
Marketing is the science of exchange
Exchange is the foundation of organization activities
Unless the organizations can encourage exchange, their resource bases disappear
Move to marketing in many sectors. Marketing concepts can be used for Business, Services, Financial services, Non-for-profit, Politics, Schools, Public opinion

83. Marketing must be POISE
Hugh Davidson argues that successful marketing is marked with POISE. It must be:
P Profitable
O Offensive (rather than defensive)
I Integrated
S Strategic (future-oriented)
E Effective (it gets results)

84. Developments in Marketing
Consumer
marketing
Industrial
Non-profit
Services
Relationship ?
Source: Adapted from Christopher, M., Payne, A. and Ballantyne, D. (1991) Relationship Marketing. London: Butterworth Heinemann

85. Influences on RM Nordic School Services Anglo-Australian Relationship
Consumer Gds
Relationship
Marketing
Services
Industrial (B2B)
Nordic
School
Network
Approach
Anglo-Australian
Strategic Alliances
& Partnership
Research
(Egan, 2001)

86. (Company Relationships)
RM Definitions
Database
Marketing
Business/Customer
Partnering
Customer Partnering
(Company Relationships)
Catch-all Category
Breadth of relationship definition
Most generally
accepted definitions of relationship marketing
Source: Based on Brodie, R.J., Coviello, N.E., Brookes, R.W. and Little, V. (1997) ‘Towards a paradigm shift in marketing; an examination of current marketing practices’, Journal of Marketing Management, 13(5), 383–406

87. Relationship Marketing
Terms used either as substitute for or to describe
similar concepts to Relationship Marketing
direct marketing
customer relationship management (CRM)
micromarketing
loyalty-based marketing
wraparound marketing
symbiotic marketing
relevance marketing
frequency marketing
dialogue marketing
database marketing
data-driven marketing
one-to-one marketing
‘segment-of-one’ marketing
customer partnering
individual marketing
bonding
integrated marketing
interactive marketing
Source: Based on Vavra, T.G. (1992) Aftermarketing. Homewood, IL: Richard D. Irwin; Buttle, F.B. (1996) Relationship Marketing Theory and Practice. London: Paul Chapman; Tapp, A. (1998) Principles of Direct and Database Marketing. London: Financial Times Management/Pitman Publishing

88. RM Definitions Christopher et al (1991):
RM is where
customer service
quality management
marketing
come together
Other definitions stress time frame and commitment

89. RM Definitions Grönroos (1994)
“identify and establish, maintain and enhance and, when necessary, terminate relationships with customers and other stakeholders, at a profit so that the objectives of all parties involved are met; and this is done by mutual exchange and fulfilment of promises”
Source: Grönroos, C. (1994) ‘From marketing mix to relationship marketing: towards a paradigm shift in marketing’, Management Decisions, 32(2), 4–20

90. Relationship Marketing
Seeks to create new value for customers and share it
Recognises the key role that customers have both as purchasers and in defining the value they wish to achieve.
Businesses are seen to design and align processes, communication, technology and people to achieve customer value.
Represents continuous cooperative effort between buyers and sellers.
Recognises the value of customer’s purchasing lifetimes (i.e. lifetime value)
Seeks to build a chain of relationships within the organisation (to create customer value) and between the organisation and its main stakeholders including suppliers, distr.channels, intermediaries,shareholders.
Source: Adapted from Gordon, I.H. (1998) Relationship Marketing. Etobicoke, Ontario: John Wiley & Sons

91. TM versus RM RELATIONSHIPS TRANSACTIONS Retention focus
Continuous customer contact
Benefits orientation
Long time scale
High service emphasis
High commitment
Quality everyone’s concern
TRANSACTIONS
Single sale focus
Discontinuous customer contact
Features orientation
Short time scale
Little service emphasis
Low commitment
Quality a production issue
Source: Adapted from Payne, A., Christopher, M. and Peck, H. (eds) (1995) Relationship Marketing for Competitive Advantage: Winning and Keeping Customers. Oxford: Butterworth Heinemann

92. TM/RM Continuum Importance of Customer Service Importance of
TRADITIONAL MARKETING
RELATIONSHIP MARKETING
Importance of
Core Product
TM/RM Continuum