Topic One: Introduction

Objectives Course Organization Tasks of Marketing Major Concepts & Tools of Marketing Marketplace Orientations Marketing’s Responses to New Challenges

Course/Text Organization Part I - Understanding Marketing Part II - Analyzing Marketing Opportunities Part III - Identifying customer value Part IV - Creating the Market Offering Part V - Delivering and communicating Market Offering

Defining Marketing Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others. - Philip Kotler (p. 7)

Core Concepts of Marketing Product or Offering Value and Satisfaction Needs, Wants, and Demands Exchange and Transactions Relationships and Networks Target Markets & Segmentation Marketing Channels Supply Chain Competition Marketing Environment

Simple Marketing System Industry (a collection of sellers) Market (a collection of Buyers) Goods/services Money Communication Information

Manufacturer markets Services,money Government markets Services,money Services Services,money Taxes Taxes,goods Taxes,goods Taxes,goods MoneyMoney Consumer markets Intermediary markets Goods, services ResourcesResources Resource markets MoneyMoney Structure of Flows

The Four Ps Marketing Mix Product Price Promotion Place The Four Cs Customer Solution Customer Cost Communication Conven- ience

Production Concept Product Concept Selling Concept Marketing Concept Consumers prefer products that are widely available and inexpensive Consumers favor products that offer the most quality, performance, or innovative features Consumers will buy products only if the company aggressively promotes/sells these products Focuses on needs/ wants of target markets & delivering value better than competitors Company Orientations Towards the Marketplace

Market Integrated marketing Profits through customer satisfaction Customer needs (b) The marketing concept Factory Existing products Selling and promotion Profits through sales volume Starting point FocusMeansEnds (a) The selling concept Customer Delivered Value

Customers Front-line people Middle Management Top Management Traditional Organization Chart

Customer-Oriented Organization Chart Customers Front-line people Middle management Top manage- ment Customers

Evolving Views of Marketing’s Role a. Marketing as an equal function Finance Production Marketing Human resources b. Marketing as a more important function Finance Human resources Marketing Production

Evolving Views of Marketing’s Role c. Marketing as the major function Marketing Finance Human resources Production d. The customer as the controlling factor Customer Human resources Finance Production Marketing

Evolving Views of Marketing’s Role e. The customer as the controlling function and marketing as the integrative function Customer Marketing Production Human resources Finance

Determinants of Customer Delivered Value Image value Personnel value Services value Product value Total customer value Total customer value Monetary cost Time cost Energy cost Psychic cost Total customer cost Total customer cost Customer delivered value Customer delivered value

Satisfaction is a person’s feelings of pleasure or disappointment resulting from comparing a product’s perceived performance (or outcome) in relation to his or her expectations.

Satisfied Customers: Are loyal longer Buy more (new products & upgrades) Spread favorable word-of-mouth Are more brand loyal (less price sensitive) Offer feedback Reduce transaction costs

Capturing value from customers Building customer relationship Creating customer loyalty and retention –C–Customer lifetime value Growing share of customer – share of customer Building customer equity – customer equity: the total combined customer lifetime values of all of the company’s customers.