1. Introduction to Marketing
Marketing;
“Satisfying customer needs”
“Meeting needs profitably”
“Generating customer value at a profit”
“Managing profitable customer relationships by
delivering superior value to customers”
2. 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
4. Marketing Process
Build
profitable
relationships
and create
customer
delight
Capture
value from
customers
to create
profits and
customer
quality
Create value for customers and
build customer relationships
Capture
value from
customers
in return
Design a
customer-
driven
marketing
strategy
Construct a
marketing
program that
delivers
superior
value
Understand
the
marketplace
and customer
needs&wants
5. Core Concepts of Marketing
Needs, wants,
and demands
Products
and services
Value and
satisfaction
Exchange,
transactions,
and relationships
Markets
6. Core Concepts of Marketing
Needs, wants, and
demands
Marketing offers:
including products,
services and experiences
Value and satisfaction
Exchange, transactions
and relationships
Markets
Need
Basic human requirements
State of felt deprivation
Example: Need food
Wants
Needs directed to specific
objects
The form of needs as
shaped by culture and the
individual
Example: Want a Big Mac
Demands
Wants which are backed by
buying power
7. Core Concepts of Marketing
Needs, wants, and
demands
Marketing offers:
including products,
services and experiences
Value and satisfaction
Exchange, transactions
and relationships
Markets
Marketing offering
Combination of
products, services,
information or
experiences that satisfy
a need or want
Offer may include
services, activities,
people, places,
information or ideas
8. Products
Anything that can be Offered to a Market to Satisfy a Need or Want
Experiences Persons Places
Organizations Ideas
Information
Core Concepts of Marketing
Services
Activities or Benefits Offered for Sale That Are Essentially
Intangible and Don’t Result in the Ownership of Anything
10. “Friends Don’t Let Friends
Drive Drunk”
Marketing ideas
(social marketing)
This is the watch
Stephen Hollingshead, Jr. was
wearing when he encountered a
drunk driver.
Time of death 6:55 p.m.
Market Offerings- examples
11. Core Concepts of Marketing
Needs, wants, and
demands
Marketing offers:
including products,
services and experiences
Value and satisfaction
Exchange, transactions
and relationships
Markets
Value
Customers form
expectations regarding
value
Marketers must deliver
value to consumers
Satisfaction
A satisfied customer will buy
again and tell others about
their good experience
12. Core Concepts of Marketing
Total Quality Management Involves Improving the Quality
of Products, Services, and Marketing Processes
Product’s Perceived Performance in Delivering Value
Relative to Buyer’s Expectations is
“Customer Satisfaction”
Value Gained From Owning a Product and
Costs of Obtaining the Product is
“Customer Value”
13. Core Concepts of Marketing
Needs, wants, and
demands
Marketing offers:
including products,
services and experiences
Value and satisfaction
Exchange, transactions
and relationships
Markets
Exchange
The act of obtaining a
desired object from someone
by offering something in
return
Transaction
Trade of values between two
or more parties
One exchange is not the goal,
relationships with several exchanges
are the goal
Relationships are built through
delivering value and satisfaction
Marketing network ğ consists
of the company and all its
supporting stakeholders
14. Core Concepts of Marketing
Needs, wants, and
demands
Marketing offers:
including products,
services and experiences
Value and satisfaction
Exchange, transactions
and relationships
Markets
Market
Set of actual and
potential buyers of a
product
Marketers seek buyers
that are profitable
15. Simple Marketing System
Industry
(a collection
of sellers)
Market
(a collection
of Buyers)
Products/services
Money
Communication
Information
16. 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 ğ the delivery of
customer satisfaction at a profit.
17. More Definitions of Marketing
A social and managerial process by which individuals and
groups obtain what they need and want through creating,
offering and exchanging products and services of value with
others.
The management process responsible for identifying,
anticipating and satisfying customer requirements profitably.
Marketing consists of individual and organizational activities that
facilitate and enhance satisfying exchange relationships in a
dynamic environment through the creation, servicing, distribution,
promotion and pricing of goods, services and ideas
18. More Definitions of Marketing (cont.)
From the societal perspective; some marketers
describe marketing as the creation and delivery of
a standart of living.
From the managerial perspective; marketing
(management) is the process of planning and
executing the conception, pricing, promotion and
distribution of goods and services to create
exchanges that satisfy individual and
organizational goals.
19. Marketing Management
Marketing management ğ the art and science of
choosing target markets and building profitable
relationships with them.
This definition must include answers to 2 questions:
What customers will we serve?
How can we serve these customers best?
Getting, keeping, and growing customers through
creating, delivering, and communicating superior
customer value
Marketing management involves ğ managing
demand ğ involves managing customer relationships
20. Marketing Management
Marketing management can be defined in
broader terms as “demand management”;
Marketers aim to influence the level, timing and
composition of demand to meet organizational goals.
Marketing management is concerned
not only with finding and increasing demand,
but also with changing or even reducing it : demarketing!
Demarketing’s aim is to reduce the number of customers
or to shift their demand temporarily or permanently
(e.g. move traffic away from a popular tourist attraction during peak
demand times)
21. Evolution of Marketing Thought
How marketing has become
“marketing” as we understand it
and apply its practices today?
22. Evolution of Marketing Thought
Production Era (1850s-1920s)
Industrial revolution; mass production
Few products and little competition
Sales Era (1920s-1950s)
The focus was on personal selling and advertising
Sales seen as the major means for increasing profits
Mktg Era (1950s-present)
Customer orientation replaced the “hard sell” of the sales-led era
Determination of the needs and wants of customers before
introducing products or services
23. Evolution of Marketing Thought
Relationship Marketing Era: 1990s-
Marketing era has recently shifted from being “transaction-
based” ğ to focusing on “relationships”
The argument ğ traditional marketing practices focused on
attracting new customers rather than retaining existing
ones.
It is equally important to hang on to existing customers so
that they become repeat buyers and long term loyal
customers
“customer relationship management”!
24. 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
25. Production Concept
Consumers will favor those products that are
widely available and low in cost.
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 product’s cost is high and has to be decreased to
expand the market.
26. Product Concept
Consumers will favor those products that offer
the most quality, performance or innovative
features.
Managers in product-oriented organizations
concentrate on making superior products and
improving them over time.
The assumption ğ the customers will admire
well-made products and can evaluate product
quality and performance
This concept may lead to marketing myopia
27. Selling Concept
Agressive selling and promotion
Assumptions are;
Consumers must be convinced of buying company
products
Company is powerful in generating effective selling and
promotion to stimulate more buying
This concept is 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)
28. Marketing Concept
Key to achieving organizational goals consists
of being more effective than competitors in
creating, delivering and communicating
customer value to target markets.
4 pillars of modern marketing :
1. Target market
2. Customer needs
3. Integrated marketing
4. Profitability through customer satisfaction
30. Marketing Concept (cont.)
1) Target market ğ homogenous group of customers
to whom the company wishes to appeal
2) Customer needs
Consumers may not be fully conscious of their needs
It may not be easy to articulate these needs
They may use words that require some interpretation
Customer-oriented thinking ğ to define customer needs from
the customer’s point of view
Sales revenue ğ New customers + Repeat customers
“Customer Retention” vs. “Customer Attraction”
Customer satisfaction is a function of the product perceived
performance and buyer’s expectations
31. Marketing Concept (cont.)
3) Integrated Marketing
1. Various marketing functions must work together for
customer satisfaction (coordination of 4Ps; marketing
mix elements)
Marketing Mix ğ controllable variables the company puts
together to satisfy its target market(s).
Product: Product variety, quality, design, features, brand name,
packaging, sizes, services, warranties, returns
Price: List price, discounts, allowances, payment period, credit
terms
Promotion: Sales promotion, advertising, sales force, public
relations, direct marketing
Place: Channels, coverage, assortments, locations, inventory,
transport
33. Marketing Concept - The 4 P’s ğ
ğ The 4 Cs
Marketing
Mix
Product
Price
Promotion
Place
Customer
Solution
Customer
Cost Communication
Convenience
34. Marketing Concept (cont.)
Integrated Marketing (cont.)
2. Marketing must be well coordinated with other
departments in the company;
all departments have to work together to satisfy
customers’ needs and wants
4) Profitability through customer satisfaction
To achieve profits as a result of creating superior
customer value
35. Selling – Marketing...
“There will always be need for
some selling. But the aim of marketing
is to make selling superfluous. 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
37. Modern Marketing Concept Customer-
Oriented Organization Chart
Customers
Front-line people
Middle management
Top
manage-
ment
C
u
s
t
o
m
e
r
s
C
u
s
t
o
m
e
r
s
38. Relationship Marketing Concept
Customer Relationship Management ğ the 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
Relationship building blocks ğ “customer value” and
“customer satisfaction”
“Customer retention” and “customer loyalty”
The intention ğ to gain a greater proportion of an
existing customer’s purchases over a long period
(increase “consumer lifetime value”!)
39. Relationship Marketing Concept
“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 Uranishi
Executive Vice President,
Toyota Motor Corporation
40. Connections With Customers –
Not All Customers are Equal
Most marketers are targeting fewer, potentially
more profitable customers.
Asking:
What value does the customer bring to the
organization?
Are they worth pursuing? – customer profitability analysis
Focus has shifted to:
keeping current customers, and
building lasting relationships based on superior
satisfaction and value.
It costs 5 to 10 times as much to attract a new customer as it
does to keep a current customer satisfied.
41. Customer Relationship Management
Capturing Value from Customers
Customer Loyalty
and Retention
Share of Customer
Customer Equity
Customer delight
leads to emotional
relationships and
loyalty
Customer Lifetime
Value (CLV) shows
true worth of a
customer
Key Concepts
Key Concepts
42. Customer Relationship Management
Capturing Value from Customers
Customer Loyalty
and Retention
Share of Customer
Customer Equity
Share of customer’s
purchase in a product
category.
Achieved through
offering greater
variety, cross-sell and
up-sell strategies.
Key Concepts
Key Concepts
43. Customer Relationship Management
Capturing Value from Customers
Customer Loyalty
and Retention
Share of
Customer
Customer Equity
The 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 key
Key Concepts
Key Concepts
44. Societal Marketing Concept
Company’s negative effects on society
Conflict between consumer wants and long-term
social welfare
Marketing managers should be concerned with
social responsibility
The societal marketing concept
Company’s task is to determine needs and wants of
target markets & to satisfy them more effectively and
efficiently than competitors --in a way that preserves or
enhances the consumer’s and society’s well-being.
