Market Res

Introduction to Marketing

The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. P.Drucker

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Discuss what is marketing and core concepts of marketing and review some possible definitionsSee the evolution of marketing thought and discuss various orientations toward marketplaceFocus on modern marketing concept, identify four pillars of modern marketingDescribe 4Ps of marketing, as elements of total marketing mix Discuss modern marketing concept comparing it with selling concept and extending it with relationship marketing concept

Preview

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Introduction to Marketing Marketing;Satisfying customer needsMeeting needs profitably Generating customer value at a profitManaging profitable customer relationships by delivering superior value to customers

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What is Marketing?No single correct definition or approach Common subject matters:The ability to satisfy customers,The identification of favorable marketing opportunities,The need to create an edge over competitors,The capacity to make profits to enable a viable future for the organization,The use of resources to maximize a business market position,The aim to increase market share mainly in target markets

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What is Marketing? Marketing a process by which companies create value for customers and build strong customer relationships to capture value from customers in return

What is Marketing?Build profitable relationships and create customer delightCapture value from customers to create profits and customer qualityCreate value for customers and build customer relationshipsCapture value from customers in returnDesign a customer-driven marketing strategy Construct a marketing program that delivers superior valueUnderstand the marketplace and customer needs&wantsThe Marketing Process

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Understanding the Marketplaceand Customer Needs:Core Concepts of MarketingNeeds, wants, and demandsProductsand servicesValue and satisfactionExchange, and relationshipsMarkets

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Core Concepts of MarketingNeeds, wants, and demandsMarketing offers: including products, services and experiencesValue and satisfaction Exchange and relationships Markets

NeedState of felt deprivationBasic human requirements e.g. needs foodWantsNeeds directed to specific objects The form of needs as shaped by culture and the individuale.g. wants a BigMacDemandsWants which are backed by buying power

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Core Concepts of MarketingNeeds, wants, and demandsMarketing offers: including products, services and experiencesValue and satisfaction Exchange and relationships Markets

Marketing offering Combination of products, services, information or experiences offered to a market that satisfy a need or wantOffer may include services, activities, people, places, information or ideas

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Core Concepts of MarketingMarketing myopia is focusing only on existing wants and losing sight of underlying consumer needs.

Market offerings are not limited to physical products; UNCF successfully markets the idea that A mind is terrible thing to waste.

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ProductsAnything that can be Offered to a Market to Satisfy a Need or WantCore Concepts of Marketing

ServicesActivities or Benefits Offered for Sale That Are EssentiallyIntangible and Dont Result in the Ownership of Anything

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Core Concepts of MarketingNeeds, wants, and demandsMarketing offers: including products, services and experiencesValue and satisfaction Exchange and relationships Markets

ValueCustomers form expectations regarding valueMarketers must deliver value to consumersSet the right level of expectations (not to low or high) SatisfactionWhat is the benefit of having a satisfied customer?

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Core Concepts of MarketingNeeds, wants, and demandsMarketing offers: including products, services and experiencesValue and satisfaction Exchange and relationships Markets

ExchangeThe act of obtaining a desired object from someone by offering something in returnThe response may be more than simply buying or trading products and servicesOne exchange is not the goal, relationships with several exchanges are the goal

Relationships are built through delivering value and satisfactionMarketing network consists of the company and all its supporting stakeholders

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Core Concepts of MarketingNeeds, wants, and demandsMarketing offers: including products, services and experiencesValue and satisfaction Exchange and relationships Markets

MarketSet of actual and potential buyers of a productThese buyers share a particular need or want that can be satisfied through exchange relshps

Marketing means managing markets to bring about profitable customer relshps

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Simple Marketing SystemProducts/servicesMoney

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Main Elements in a Marketing System

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Core Concepts of MarketingMarketing system consists of all of the actors (suppliers, company, competitors, intermediaries, and end users) who are affected by major environmental forces such as:

DemographicEconomicPhysicalTechnologicalPoliticallegalSocio-cultural

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Marketing defined as...Process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. Simply put: Marketing the delivery of customer satisfaction at a profit.

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Designing a Customer-Driven Marketing StrategyMarketing management the art and science of choosing target markets & building profitable relationships with them.This definition must include answers to 2 questions:What customers will we serve?How can we best serve these customers?Getting, keeping, and growing customers through creating, delivering, and communicating superior customer value

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Designing a Customer-Driven Marketing StrategyMarket segmentation refers to dividing the markets into segments of customers

Target marketing refers to which segments to go afterSelecting Customers to Serve

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Designing a Customer-Driven Marketing StrategyMarketing management involves managing demand involves managing customer relationshipsMarketers aim to influence the level, timing and composition of demand to meet organizational goals. Marketing management is concernednot only with finding and increasing demand, but also with changing or even reducing it

Demarketing marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but to reduce or shift it

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Marketing management:Customer management & Demand management

Choosing a Value Proposition

The value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needs

Designing a Customer-Driven Marketing Strategy

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Designing a Customer-Driven Marketing StrategyMarketing Management Orientations

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Production ConceptConsumers will favor those products that are widely available and higly affordable.Managers concentrate on achieving high production efficiency and wide distribution.

The assumption is valid at least in 2 situations :The demand for a product exceeds supply (suppliers will concentrate on finding ways to increase production)The products cost is high and has to be decreased to expand the market.

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Product Concept

Consumers will favor those products that offer the most quality, performance and features. Managers in product-oriented organizations concentrate on making superior products and improving them over time.The assumption the customers will admire well-made products and can evaluate product quality and performance This concept may lead to marketing myopia

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Selling ConceptConsumers will not buy enough of the firms products unless it undertakes a large scale selling and promotion effortConsumers must be convinced of buying company productsCompany is powerful in generating effective selling and promotion to stimulate more buyingAgressive selling & promotion Mostly used by firms which have overcapacity. The aim is to sell what they make rather than make what the market wants. Short-term profits are more important

(customer dissatisfaction may occur)

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Marketing ConceptAchieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do

4 pillars of modern marketing :

Target marketCustomer needsIntegrated marketingProfitability through customer satisfaction

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Marketing and Sales Concepts Contrasted

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Marketing Concept (cont.)Target market homogenous group of customers to whom the company wishes to appeal

Customer needsConsumers may not be fully conscious of their needsIt may not be easy to articulate these needsThey may use words that require some interpretation Customer-oriented thinking to define customer needs from the customers point of viewSales revenue New customers + Repeat customers Customer Retention vs. Customer Attraction Customer value and customer satisfaction are building blocks of customer relationship management

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Marketing Concept (cont.)Integrated Marketing Various marketing functions must work together for customer satisfaction (coordination of 4Ps; marketing mix elements)Marketing Mix controllable variables the company puts together to satisfy its target market(s).

Product: Product variety, quality, design, features, brand name, packaging, sizes, services, warranties, returnsPrice: List price, discounts, allowances, payment period, credit termsPromotion: Sales promotion, advertising, sales force, public relations, direct marketingPlace: Channels, coverage, assortments, locations, inventory, transport

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Marketing Concept - The 4 Ps

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Marketing Concept - The 4 Ps The 4 CsMarketingMixCustomerSolutionCustomerCostCommunicationConvenience

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Marketing Concept (cont.)Integrated Marketing (cont.)Marketing must be well coordinated with other departments in the company;all departments have to work together to satisfy customers needs and wants

Profitability through customer satisfaction To achieve profits as a result of creating superior customer value

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Selling Marketing...There will always be need for some selling. But the aim of marketing is to make selling unnecessary. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. Peter Drucker

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Societal Marketing ConceptCompanys negative effects on society Conflict between consumer wants and long-term social welfare Societal marketing concept is the idea that a company should make good marketing decisions by considering consumers wants, the companys requirements, consumers long-term interests, and societys long-run interests

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Societal Marketing Concept

Company(Profits)Consumers(Want Satisfaction)Society(Human Welfare)Societal Marketing Concept

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The marketing mix is the set of tools (four Ps) the firm uses to implement its marketing strategy.It includes product, price, promotion, and place.

Integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers.

Constructing an Integrated Marketing Program

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Building Customer RelationshipsThe overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction

Customer Relationship Management (CRM)

Relationship Building BlocksThe aim to increase consumer lifetime value!to gain a greater proportion of an existing customers purchases over a long period

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Our slogan 5+Million More Smiling Customers is not about reaching sales targets but about whether we are able to provide greater satisfaction to a greater number of customers...

The goal is to improve customer satisfaction which translates to an increased number of smiling customers.

Tokuichi UranishiEx Vice President, Toyota Motor Corporation

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Building Customer RelationshipsCustomer Relationship Levels and Tools

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Building Customer RelationshipsRelating with more carefully selected customers uses selective relationship management to target fewer, more profitable customersWhat value does the customer bring to the organization?Are they worth pursuing? customer profitability analysis

Relating more deeply and interactively by incorporating more interactive two way relationships through blogs, Websites, online communities and social networks

The Changing Nature of Customer Relationships

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Building Customer RelationshipsRelating for the long term uses customer relationship management to retain current customers and build profitable, long-term relationshipsFocus has shifted to:keeping current customers, and building lasting relationships based on superior satisfaction and valueIt costs 5 to 10 times as much to attract a new customer as it does to keep a current customer satisfied.

The Changing Nature of Customer Relationships

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Partner relationship management involves working closely with partners in other company departments and outside the company to jointly bring greater value to customers

Building Customer Relationships

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Building Customer RelationshipsPartners inside the company every function area interacting with customersElectronicallyCross-functional teamsPartners outside the company how marketers connect with their suppliers, channel partners, and competitors by developing partnerships

Partner Relationship Management

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Capturing Value from CustomersCustomer lifetime value (CLV) is the value of the entire stream of purchases that the customer wouldmake over a lifetime of patronage

Creating Customer Loyalty and Retention

CLV shows true worth of a customer

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Capturing Value from Customers

Share of customer is the portion of the customers purchase that a company gets in its product categoriesAchieved through offering greater variety, cross-sell and up-sell strategies.

Growing Share of Customer

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Capturing Value from CustomersCustomer equity is the total combined customer lifetime values (CLVs) of all of the companys customersA measure of the firms performance

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Capturing Value from CustomersBuilding the right relationships with the right customers involves treating customers as assets that need to be managed and maximizedDifferent types of customers require different relationship management strategiesBuild the right relationship with the right customers

Building Customer Equity

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Evolution of Marketing Thought How marketing has become marketing as we understand it and apply its practices today?

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Evolution of Marketing ThoughtProduction Era (1850s-1920s) Industrial revolution; mass productionFew products and little competitionSales Era (1920s-1950s)The focus was on personal selling and advertisingSales seen as the major means for increasing profitsMktg Era (1950s-present)Customer orientation replaced the hard sell of the sales-led eraDetermination of the needs and wants of customers before introducing products or servicesRelationship Marketing Era: 1990s-Marketing era has recently shifted from being transaction-based to focusing on relationshipsBoth attracting and retaining customers

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Evolution of Marketing Thought: New Era in Marketing (The Millenium)..from Relationship Marketing to...Network marketingE-marketingCommunity marketingBuzz marketingDigital marketingMobile marketing... ... ...

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The New Marketing LandscapeMajor Developments

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The New Marketing LandscapeGrowth of the InternetAdvances in telecommunications, information, transportationCustomer research and trackingProduct developmentDistributionNew advertising tools24/7 marketing through the Internet

Challenges

Digital ageGlobalizationEthics and social responsibilityNot-for-profit marketing

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The InternetThe Internet has been hailed as the technology behind a new model for doing business.New applications include:Internet connecting with customers,Intranets connecting with others in the company (internal customer), andExtranets connecting with strategic partners, suppliers, and dealers.

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Digital ageGlobalizationEthics and social responsibilityNot-for-profit marketing

Geographical and cultural distances have shrunkGreater market coverageMore options for purchasing and manufacturingIncreased competition from foreign competitors

Challenges

The New Marketing Landscape

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The New Marketing LandscapeDigital ageGlobalizationEthics and social responsibilityNot-for-profit marketing

Marketers need to take great responsibility for the impact of their actions

Challenges

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The New Marketing LandscapeDigital ageGlobalizationEthics and social responsibilityNot-for-profit marketing

Many organizations are realizing the importance of strategic marketingPerforming artsGovernment agenciesColleges, universitiesHospitals

Challenges

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So, What Is Marketing? Pulling It All Together

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