1 What is Marketing? Marketing Defined: “Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others”Marketing is about managing profitable customer relationshipsAttracting new customersRetaining and growing current customers
4 Understanding the Marketplace Core ConceptsNeedState of felt deprivationExample: Need foodWantsThe form of needs as shaped by culture and the individualExample: Want a Big MacDemandsWants which are backed by buying powerNeeds, wants, and demandsMarketing offers: including products, services and experiencesValue and satisfactionExchange, transactions and relationshipsMarkets
5 Want Need Example: Need is for love—a very basic need. Want is for a product to help us satisfy a need.The specific way a person satisfies a need depends on his or her unique history, learning experiences, and cultural environment.Need
6 Understanding the Marketplace Core ConceptsMarketing offerCombination of products, services, information or experiences that satisfy a need or wantOffer may include services, activities, people, places, information or ideasNeeds, wants, and demandsMarketing offers: including products, services and experiencesValue and satisfactionExchange, transactions and relationshipsMarkets
7 Understanding the Marketplace Core ConceptsValueCustomers form expectations regarding valueMarketers must deliver value to consumersSatisfactionA satisfied customer will buy again and tell others about their good experienceNeeds, wants, and demandsMarketing offers: including products, services and experiencesValue and satisfactionExchange, transactions and relationshipsMarkets
8 Value and Satisfaction Perceived ValueThe customer’s evaluation of the difference between benefits and costs.Customers often do not judge values and costs accurately or objectively.Customer SatisfactionProduct’s perceived performance relative to customer’s expectations.
10 Discussion Question: Customer Satisfaction When have you, personally, been extremely satisfied or dissatisfied with a product? Why?Why is it so difficult for companies to deliver value to consumers?Having students discuss their experience brings out product, pricing, promotion and distribution issues. It also highlights the importance of service and how every company is a service company. Ask them how many people they informed when dissatisfied vs. the number they informed when satisfied (dissatisfied is usually higher). You can also introduce perceived value here. It is also useful on the third question to talk about research and understanding needs, the difficulty in managing costs while delivering quality.1 - 10
11 Understanding the Marketplace Core ConceptsExchangeThe act of obtaining a desired object from someone by offering something in returnOne exchange is not the goal, relationships with several exchanges are the goalRelationships are built through delivering value and satisfactionNeeds, wants, and demandsMarketing offers: including products, services and experiencesValue and satisfactionExchange, transactions and relationshipsMarkets
12 Understanding the Marketplace Core ConceptsMarketSet of actual and potential buyers of a productMarketers seek buyers that are profitableNeeds, wants, and demandsMarketing offers: including products, services and experiencesValue and satisfactionExchange, transactions and relationshipsMarkets
14 Marketing ManagementMarketing management is the art and science of choosing target markets and building profitable relationships with them.This definition must include answers to two questions:What customers will we serve?How can we serve these customers best?
15 Selecting Customers and Creating Value Customer ManagementWhat customers will we serve?Marketers select customers that can be served profitablyValue PropositionHow can we serve these customers best?Includes the set of benefits or values a company promises to deliver to consumers to satisfy their needs
16 Marketing Management orientations PRODUCTION CONCEPTPRODUCT CONCEPTSELLING CONCEPTMARKETING CONCEPTSOCIETAL CONCEPTOver time five alternative concepts have developed under which organizations design and carry out their marketing strategies.
17 Production ConceptConsumers will favor products that are available and affordableImprove production and distributionManagement should focus on improving production and distribution efficiency.
18 Product ConceptConsumers will favor products that offer the most in quality, performance, and innovative featuresMake continuous product improvementsUnder this concept, marketing strategy focuses on making continuous product improvements.
19 Selling ConceptConsumers will not buy enough without a large scale selling and promotion effortPush for more salesThe concept is typically practiced with unsought goods—those that buyers do not normally think of buying, such as insurance or blood donations.These industries must be good at tracking down prospects and selling them on product benefits.
20 Marketing ConceptFocus on satisfying the needs and wants of target markets.«Find right customers for your product»VS«Find right products for your customers»Under the marketing concept, customer focus and value are the paths to sales and profits.The job is not to find the right customers for your product but to find the right products for your customers.Customer-driven marketing is about understanding customer needs and creating products and services that meet existing and latent needs.Deliver satisfaction better than competitors.
22 Societal Marketing Concept Deliver value to customers to improve their AND the society’s well being.Balance short-run and long-run welfare.The societal marketing concept questions whether the pure marketing concept overlooks possible conflicts between consumer short-run wants and consumer long-run welfare.The societal marketing concept holds that marketing strategy should deliver value to customers in a way that maintains or improves both the consumer’s and the society’s well being.
23 The Marketing Plan Transforms the marketing strategy into action Includes the marketing mix and the 4P’s of marketingProductPricePlacePromotion
25 Building Customer Relationships CRM – Customer relationship managementThe overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. It deals with all aspects of acquiring, keeping and growing customers.
26 Not All Customers are Equal Basic RelationshipsLow-margin customersFull PartnershipsKey customersSelective relationship managementWeeding out unprofitable customers
27 Capturing Value from Customers Key ConceptsCustomer delight leads to emotional relationships and loyaltyCustomer Lifetime Value shows true worth of a customerCustomer Loyalty and RetentionShare of CustomerCustomer Equity
28 Capturing Value from Customers Key ConceptsShare of customer’s purchase in a product category.Achieved through offering greater variety, cross-sell and up-sell strategies.Customer Loyalty and RetentionShare of CustomerCustomer Equity
29 Share of customer Sales to your firm Share of customer is the portion of the customer’s purchasing that a company gets in its product categories
30 Capturing Value from Customers Key ConceptsThe combined customer lifetime values of all current and potential customers.Measures a firm’s performance, but in a manner that looks to the future.Choosing the “best” customers is keyCustomer Loyalty and RetentionShare of CustomerCustomer Equity
31 Marketing Landscape Challenges Growth of the Internet Advances in telecommunications, information, transportationCustomer research and trackingProduct developmentDistributionNew advertising tools24/7 marketing through the InternetDigital ageGlobalizationEthics and social responsibilityNot-for-profit marketingMarketing relationships
32 Marketing Landscape Challenges Geographical and cultural distances have shrunkGreater market coverageMore options for purchasing and manufacturingIncreased competition from foreign competitorsDigital ageGlobalizationEthics and social responsibilityNot-for-profit marketingMarketing relationships
33 65%McDonald’s gets 65 percent of its revenues from outside the United States.McDonald’s gets 65 percent of its revenues from outside the United States.
34 Marketing Landscape Challenges Marketers need to take great responsibility for the impact of their actionsDigital ageGlobalizationEthics and social responsibilityNot-for-profit marketingMarketing relationships
35 Marketing Landscape Challenges Many organizations are realizing the importance of strategic marketingPerforming artsGovernment agenciesCollegesHospitalsPoliticiansDigital ageGlobalizationEthics and social responsibilityNot-for-profit marketingMarketing relationships
36 Marketing Landscape Challenges Profits through managing long-term customer equityImprove customer knowledgeTarget profitable customersKeep profitable customersDigital ageGlobalizationEthics and social responsibilityNot-for-profit marketingMarketing relationships
37 What is MarketingThe process of building profitable customer relationships by creating value for customers and capturing value in return