Principles of Marketing Principles of Marketing.
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Transcript of Principles of Marketing Principles of Marketing.
Principles of MarketingPrinciples of Marketing
“Marketing is managing profitable customer relationship”
The twofold goal of marketing is:
• Attract new customers
• Keep and grow current customers
by promising superior value
by delivering satisfaction
For-Profit FirmFor-Profit FirmACI ACI SQUARESQUAREBATABATAAARONGAARONGAGORAAGORABanglalinkBanglalink
For-Profit FirmFor-Profit FirmACI ACI SQUARESQUAREBATABATAAARONGAARONGAGORAAGORABanglalinkBanglalink
Not-for-Profit FirmNot-for-Profit Firm
CollegeCollege
HospitalHospital
MuseumsMuseums
Religious OrganizationsReligious Organizations
Not-for-Profit FirmNot-for-Profit Firm
CollegeCollege
HospitalHospital
MuseumsMuseums
Religious OrganizationsReligious Organizations
Sound Marketing is critical to the success of every organization
Marketing Defined
Selling and Advertising
Only the tip of the marketing iceberg.
Marketing Defined
Selling and Advertising
Only the tip of the marketing iceberg.
Old sense Making a sale- ”telling and selling”
New sense Satisfying customer needs
Broadly defined“Marketing is a social and managerial process by
which individuals and organizations obtain what they need and want through creating and exchanging value with others.”
Narrower business context“ Marketing involves building profitable, value-
laden exchange relationships with customers”
Broadly defined“Marketing is a social and managerial process by
which individuals and organizations obtain what they need and want through creating and exchanging value with others.”
Narrower business context“ Marketing involves building profitable, value-
laden exchange relationships with customers”
Marketing
“Marketing as the process by which companies create value for customers and building strong customer relationship in order to capture value from customer in return”
The Marketing Process
Understanding the market place and customer needs and
wants
Understanding the market place and customer needs and
wants
Design a customer-
driven marketing strategy
Design a customer-
driven marketing strategy
Construct an integrated marketing
program that delivers
superior value
Construct an integrated marketing
program that delivers
superior value
Build profitable relationships and create customer
delight
Build profitable relationships and create customer
delight
Capture value from customers to create profits
and customer equity
Capture value from customers to create profits
and customer equity
A simple Model of the Marketing Process
Create value for customers and building strong customer relationshipsCreate value for customers and building strong customer relationships
Capture value from customer in returnCapture value from customer in return
Understanding the market place and customer needs and wants
• Customer Needs, Wants, and Demands• Marketing Offerings- Products, Services, and
Experiences• Customer Value and Satisfaction• Exchanges and Relationships• Markets
Customer Needs, Wants, and Demands
Needs: Human needs are state of felt deprivation
Maslow’s Hierarchy of Need
Want Are the form human needs take as they are shaped by culture and personality
When backed by buying power wants become demand.
American Food
Bangladeshi Food
Demand
Market Offerings – Products, Services, and ExperiencesSome combination of products, services, information, or experiences offered to a market to satisfy a need or want.
Services
Persons
Place
Organizations
Information
Ideas
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
A qurter-inch holeDrill machine
Smart marketers look beyond the attributes of the product and services they sell.
Hewtett-Packard
Personal Computer A collection of wires and
electrical components
Back-up Brain/ our life/
Autobiography
Customer Value and Satisfaction
Expectations Marketers must be careful to set the right level of expectations.
Too low May satisfy those who buy but fail to attract enough buyers
Too high Buyer will be disappointed
Exchange and Relationships
The act of obtaining a desired object from someone by offering something in return
Marketing consists of actions taken to build and maintain desirable exchange relationships with target audience.
Marketers want to build strong relationships by consistently delivering superior customer value
Exchange
Market A set of all actual and potential buyers of a product or service.
competitors Suppliers
company Marketing Intermediaries
Consumers
Major environmental forces
A Modern Marketing System
Design a customer-driven marketing strategy
Marketing Management : as the science and arts of choosing target markets and building profitable relationships with them.
Two important question:Two important question:
1.1.What customers will we serve?What customers will we serve?2.2.What’s our value proposition?What’s our value proposition?
The marketing manager’s aim is to find, attract, keep, and grow target customers by creating, delivering, and communicating superior value.
Selecting customers to serve
Market segmentation Market segmentation : Dividing the market into segments of customers.: Dividing the market into segments of customers.
Target marketing Target marketing : Selecting which segments it will go after : Selecting which segments it will go after
Choose a value proposition
A company’s value proposition is the set of benefits or values A company’s value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs.it promises to deliver to customers to satisfy their needs.
BMW promises “ the ultimate driving machine”
GrameenPhone – “ Stay connected”
Why should I buy your brand rather than a competitor’s ?Why should I buy your brand rather than a competitor’s ?
Marketing Management Orientations/ Marketing philosophy/ Marketing Concepts
1.1. The production ConceptThe production Concept
2.2. The Product ConceptThe Product Concept
3.3. The Selling ConceptThe Selling Concept
4.4. The Marketing ConceptThe Marketing Concept
5.5. The Societal Marketing ConceptThe Societal Marketing Concept
The production ConceptThe production Concept holds that consumers will favor products that are available and highly affordable.
Management Focus i) Production Efficiency ii) Distribution
Efficiency
Useful philosophy in some situation:
1. When, Demand> Supply (Such as- WASA, DESA)
2. Product’s cost is too high
Although useful in some situation the Production Concept can lead to making myopia
The product ConceptThe idea that consumers will favor products that offer the most The idea that consumers will favor products that offer the most quality, performance, and features and that the organizations should quality, performance, and features and that the organizations should therefore devote its energy to making continuous product therefore devote its energy to making continuous product improvements improvements
Kodak – Photographic Film rather than a way to capture and share memories.
Management focus: making on continuous product improvements.
Marketing myopia
The idea that consumers will not buy enough of the firm’s product unless it undertake a large-scale selling and promotion effort.
The Selling Concept
Management focus: creating sales transaction
Marketing myopia
The marketing management philosophy that holds that achieving The marketing management philosophy that holds that achieving organizational goals depends on knowing the needs and want of target organizational goals depends on knowing the needs and want of target markets and delivering the desires satisfactions better than competitors markets and delivering the desires satisfactions better than competitors do. do.
FactoryFactory Existing Existing productproduct
Selling and Selling and promotingpromoting
Profit through Profit through sales volumesales volume
The Selling The Selling ConceptConcept
Market Market Customer Customer NeedNeed
Integrated Integrated MarketingMarketing
Profit through Profit through customer customer
satisfactionsatisfaction
The Marketing The Marketing ConceptConcept
Starting Point Focus Means Ends
The Marketing Concept
The idea that a company’s marketing decisions should consider The idea that a company’s marketing decisions should consider consumer’s requirements, consumer’s long-run interest consumer’s requirements, consumer’s long-run interest
The societal Marketing Concept
Societal Marketing
Concept
SocietySociety(Human welfare)(Human welfare)
CompanyCompany(Profit)(Profit)
ConsumersConsumers(Want satisfaction)(Want satisfaction)
The considerations underlying the Societal Marketing Concept
Preparing an Integrated Marketing Plan and ProgramPreparing an Integrated Marketing Plan and Program
Actually deliver the intended value to target customersActually deliver the intended value to target customers
Marketing Mix
ProductTo deliver its value proposition, the firm must first create a need-satisfying market offerings
Price It must decide how much it will charge for the offering.
Place How it will make the offering available to target consumers.
Promotion It must communicate with target customers about the offering and persuade them of its merits
Four Ps
Building Customer Relationship
Customer Relationship ManagementThe overall process building and maintaining profitable customer relationships by delivering superior customer value and satisfaction
Relationship Building Block: Customer value and satisfaction
Customer value
Customer Satisfaction
The customer’s evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers.
The extent to which a product’s perceived performance matches a buyer’s expectations.
Customer Relation Level and Tools
Many Low-Margin Customers Basic Relationships
Few Customers and high margin Create full partnership
The Changing Nature of Customer Relationships
Relating with More Carefully Selected Customers
Relating with Deeply and Interactively
Consumer-generated Marketing
Partner Relationship Management
Partner Inside the Company
Marketing Partner Outside the firm
Capturing Value from CustomersCapturing Value from Customers
Creating Customer Loyalty and Retention
By creating superior customer value, the firm creates highly satisfied customers who stay loyal and buy more. This, in return means greater long-run returns for the firm.
Good customer relationship customer delight
It means losing the entire stream of purchases that the customer would make over a lifetime of patronage.
Losing a customer losing a single sale
Customer lifetime value
The value of the entire stream of purchases that the customer would make over a lifetime of patronage.
A customer spends about Tk.100 a week, shops 50 weeks a year, and remains in the area for about 10 years
Tk100.00 x 50 x 10 = Tk.50,000
Growing Share of Customer
Share of Customer
The portion of the customer’s purchasing that a company gets in its product categories
Bank Share of wallet
Share of stomachRestaurants
Share of garageCar
Share of travelAirlines
Butterflies Good fit between
company’s offerings and customer’s needs ;high
profit potentials
True Friends : Good fit between
company’s offerings and customer’s needs ;highest
profit potentials
StrangersLittle fit between
company’s offerings and customer’s needs ;
lowest profit potentials
BarnaclesLimited fit between
company’s offerings and customer’s needs ;low
profit potentials
High Profitability
Low Profitability
Short-term customer
Long-term customer
Building Customer EquityCustomer Equity :The total combined customer lifetime values
of all of the company’s customers
Building the Right Relationships with the Right Customers
The Changing Marketing LandscapeThe Changing Marketing LandscapeThe Digital Age Computer, Communication, Information and
Other digital technologies
The digital age has provided marketers with exciting new ways to learn about and track customers and to create products and services tailored to individual customer needs
Digital technology has also brought a new wave of communication, advertising , and relationship building tools – ranging from online advertising, video, sharing tools, cell phones and video games to widgets and online social network
Internet : A vast public web of computer networks that connects users of all types all around the world to each other and to an amazingly large information repository.
Rapid Globalization
The Call for More Ethics and Social Responsibility
The Growth of Not-for-Profit Marketing
Global + Local = Glocal
1. Consumerism
2. Environmentalism
Discussion?