Principles of Marketing Chapter 1

Marketing -Is the process of building profitable customer relationships by creating value for customers and capturing value in return -Satisfying customer needs 2 GOALS OF MARKETING †¢To attract new customers by promising superior value †¢To keep and grow current customers by delivering satisfaction MARKETING PROCESS 1. Understanding the Marketplace and Customer Needs 1. 1. Needs, Wants, and Demands 1. 1. 1. NEEDS – states of felt deprivation. 1. 1. 2. WANTS – the form human needs take as shaped by culture and individual personality. 1. 1. 3. DEMANDS – human wants that are backed by buying power. 1. 2.Marketing Offerings (Products, services, and experiences) – some combination of products, services, information, or experiences offered to a market to satisfy a need or want. †¢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. 1. 3. Customer Value Satisfaction – are key building blocks for developing and managing customer relationships. 1. 4. Exchanges and Relationships – the act of obtaining a desired object from someone by offering in return. 1. 5. Markets – set of all actual and potential buyers of a product or service. . Designing a Customer-Driven Marketing Strategy †¢ Marketing Management – the art and science of choosing target markets and building profitable relationships with them. 2. 1. What customers will we serve? (What’s our target market? ) 2. 1. 1. MARKET SEGMENTATION – dividing the market into segments of customers 2. 1. 2. TARGET MARKETING – selecting which segments it will go after. 2. 2. How can we serve these customer’s best? (What’s our value proposition? ) – is the company’s set of benefits or values it promises to deliver to consumers to satisfy their needs. 2. 2. 1. MARKETING MANAGEMENT ORIENTATIONS 2. 2. 1. . THE PRODUCTION CONCEPT – the idea that consumers will favour products that are available and highly affordable and that the organization should therefore focus on improving production and distribution efficiency. 2. 2. 1. 2. THE PRODUCT CONCEPT – the idea that consumers will favour products that offer the most quality, performance, and features and that the organization should therefore devote its energy to making continuous product improvements. 2. 2. 1. 3. THE SELLING CONCEPT – the idea that consumers will not buy enough of the firm’s product unless it undertakes a large-scale selling and promotion effort. . 2. 1. 4. THE MARKETING CONCEPT – the marketing management philosophy that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. 2. 2. 1. 5. THE SOCIETAL MARKETING CONCEPT – a principle of enlightened marketing that holds th at a company should make good marketing decisions by considering the consumers’ wants, the company’s requirements, consumers’ long-run interests, and the society’s long-run interests. 3.Preparing an Integrated Marketing Plan and Program – consists of the firm’s marketing mix, the set of marketing tools the firm uses to implement its marketing strategy. †¢Marketing Mix (4Ps) a)Product b)Price c)Place d)Promotion 4. Building Customer Relationships – most important step in marketing process 4. 1. Customer Relationship Management – the overall process of building and maintaining customer relationships by delivering superior customer value and satisfaction 4. 2. Relationships Building Blocks: Customer Value and Satisfaction 4. 2. 1.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. 4. 2. 2. CU STOMER SATISFACTION – the extent to which a product’s perceived performance matches a buyer’s expectations. 4. 3. Customer Relationship Levels and Tools 4. 3. 1. FREQUENCY MARKETING PROGRAMS – reward customers who buy frequently or in large amounts. 4. 3. 2. CLUB MARKETING PROGRAMS – offers members special benefits and create member communities. 4. 4. The Changing Nature of Customer Relationships 4. 4. 1. RELATING WITH MORE CAREFULLY SELECTED CUSTOMERS True Mass Marketing – selling in a standard way to any customer who cares along. †¢Selective Relationship Management – targeting fewer, more profitable customers 4. 4. 2. RELATING FOR THE LONG TERM – serving chosen customers in a deeper, more lasting way to retain current customers and build long term relationships with them. 4. 4. 3. RELATING DIRECTLY – serving customers without going to a store – by telephone, mail order, catalogues, kiosks, and online. 4. 5. Partner Relationship Management – working close in other company or departments and outside the company to jointly bring greater value to customers. . 5. 1. PARTNERS INSIDE THE COMPANY – linking all departments of a firm in the cause of creating customer value. 4. 5. 2. MARKETING PARTNERS OUTSIDDE THE FIRM †¢Supply Chain – describes a longer channel, stretching from raw materials to components to final products that are carried to final buyers. †¢Strategic Alliances – strategic partners if they hope to be effective 5. Capturing Value from Customers 5. 1. Creating Customer Loyalty and Retention – the value of the entire stream purchases that a customer would make over a lifetime of patronage. 5. 2.Growing Share Customer – the portion of the customer’s purchasing that a company gets in its product categories. 5. 3. Building Customer Equity – the total combined customer lifetime values of all the company’s custom ers. 5. 4. Building the Right Relationships with the Right Customers CLASSIFICATIONS OF CUSTOMERS †¢Strangers – Little fit between company’s offerings and customer’s needs; lowest profit potential †¢Butterflies – Good fit between company’s offerings and customer’s needs; high profit potential †¢True Friends – Good fit between company’s offerings and customer’s needs; highest profit potential. Barnacles – Limited fit between company’s offerings and customer’s needs; low profit potential THE NEW MARKETING LANDSCAPE 1. New Digital Age – marketers must harness marketing technology 2. Rapid Globalization – take advantage of global opportunities 3. The Call for more Ethics and Social Responsibility – marketers must ensure that they set in an ethical and socially responsible way. THE GROWTH FOR NOT-FOR-PROFIT MARKETING (Examples) †¢Colleges †¢Hospitals †¢Mu seums †¢Zoos †¢Symphony Orchestra †¢Churches