Unit 1defining-marketing-and-the-marketing-processto-post-1225713105638611-8
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Transcript of Unit 1defining-marketing-and-the-marketing-processto-post-1225713105638611-8
Foundations of Marketing
What We Will Cover What is Marketing? The Marketplace and Customer Needs Marketing Management Marketing Management Philosophies Building Customer Relationships
Founded ~1965 –with a unique concept of drip irrigation- a revolutionary irrigation practice.
Today: • Sales of more than 350 million dollars a year, • 32 subsidiaries • Operating in more then 110 countries• 12 manufacturing facilities worldwide, • The largest low-volume irrigation company in the world. Netafim's continuously-expanding lineup of innovative products are used in every type of
agricultural venture - from high tech corporate farms to traditional family owned farms in developing countries.
Today, Netafim is a well-known global leader in the field of innovative irrigation-based solutions and water technologies that solve problems and raise productivity, while protecting the environment and saving water.
Creating Value• Netafim sells the knowledge and
advanced solutions – in irrigation.
• Netafim engages customers via knowledge and service.
• Netafim’s 40 years of worldwide experience in irrigation and agro- solutions allows our agronomists to provide answers to any challenge in a wide variety of local growing conditions.
• Success has been achieved by creating lasting customer relationships.
Netafim – What is its secret?Netafim – What is its secret?Case StudyCase Study
Capturing Value• Netafim is the largest low-volume
irrigation company in the world.
• More the 350 Million US dollars a year in more then 110 countries.
• Netafim's continuously-expanding lineup of innovative products are used in every type of agricultural venture - from high tech corporate farms to traditional family owned farms in developing countries.
• Today, Netafim is a well-known global leader in the field of innovative irrigation-based solutions and water technologies that solve problems and raise productivity, while protecting the environment and saving water.
What Is Marketing?
Simple Definition: Marketing is managing profitable customer relationships.
Goals: 1. Attract new customers by promising
superior value. 2. Keep and grow current customers by
delivering satisfaction.
Marketing Defined A social and managerial process by
which individuals and groups obtain what they need and want through creating and exchanging products and value with others.
OLD Viewof Marketing:
Making a Sale –“Telling & Selling”
New View of Marketing:
Satisfying customer needs
NEW View of Marketing:
Satisfying Customer Needs
“…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. All that should be needed then is to make the product of service available…”
Peter Drucker
Marketing Defined (cont’d)
A Simple Model of the Marketing Process
Understand the marketplace
and customer needs and
wants
Understand the marketplace
and customer needs and
wants
Capture value from customers to create profits and customer equity
Capture value from customers to create profits and customer equity
Create value for customers and build customer
relationships
Capture value from customers
in return
Design a customer-driven
marketingstrategy
Design a customer-driven
marketingstrategy
Build profitable relationships and
createcustomer delight
Build profitable relationships and
createcustomer delight
Construct a marketing program
that delivers superior value
Construct a marketing program
that delivers superior value
Needs, Wants, & Demands
Need: State of felt deprivation including physical, social, and individual needs. Physical needs:
Food, clothing, shelter, safety
(e.g., I am thirsty.) Social needs:
Belonging, affection Individual needs:
Learning, knowledge, self-expression
Needs, Wants, & Demands
Wants: Form that a human need takes, as shaped by culture and individual personality.(e.g., I want a Coke.)
Wants + Buying Power = Demand
Let’s apply.… Consumers usually choose from a
tremendous variety of products and services to satisfy a given need or want. Consider your need for nourishment. How does that need translate into
different wants? What marketing offers are available to
satisfy your needs that also appeal to your wants?
How might other consumers in different market segments meet the same need for nourishment?
Need / Want Fulfillment
Needs and wants are fulfilled through a Marketing Offer: Some combination of products, services,
information, or experiences offered to a market to satisfy a need or want.
Need / Want Satisfiers Products:
Persons Places Organizations Information Ideas
Services Activity or
benefit offered for sale that is essentially intangible and does not result in ownership.
Products Can Be Ideas
Products do not have to be physical objects. Here the “product” is an idea -- protecting animals.
Products can also be people, organizations, places, or information.
Marketing in Action
Need / Want Satisfiers Products:
Persons Places Organizations Information Ideas
Services Activity or
benefit offered for sale that is essentially intangible and does not result in ownership. Brand Experiences:
“. . . dazzle their senses, touch their hearts, stimulate their minds.”
Let’s Talk!
Does the ad shown at right promote consumer experiences? Explain.
Offer a different example of a current advertising campaign that promotes a “consumer experience.”
Do you believe the campaign is effective? Why or why not?
Marketing Myopia
Marketing myopia occurs when sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products.
They focus on the “wants” and lose sight of the “needs.”
Marketing in Action
Focused on selling prerecorded CDs, the record industry missed early opportunities to partner with music downloading services and manufacturers of digital MP3 type recording devices.
Marketing Myopia in the Recording Industry
How Do Consumers Obtain Products and Services?
Exchanges: act of obtaining a desired object from someone by offering something in return
Transactions: trade of values between two parties (usually involve money and a response)
Relationships: building long-term interactions with consumers, dealers, distributors, and suppliers
What is a Market?
The set of actual and potential buyers of a product.
These people share a need or want that can be satisfied through exchange relationships.
Modern Marketing Systems
Main elements in a modern marketing system include: Suppliers Company (marketer) Competitors Marketing intermediaries Final users
To summarize what we have discussed so far…
Why is understanding customer wants so critical for marketers?
How are the concepts of value and satisfaction related to each other?
What is the difference between transactions and relationships?
Marketing Management
The process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges with target groups that satisfy customer and organization objectives.
Marketing Management
The art and science of choosing target markets and building profitable relationships with them.
Questions to ask What customers will we serve?
What is our target market? How can we best serve these customers?
What is our value proposition?
Segmentation & Target Marketing
Market Segmentation: Divide the market into segments of
customers
Target Marketing: Select the segment to cultivate
Pair up with another student and discuss the ad shown at right.
Are you part of the target market for this product?
List the personal traits, variables, or factors that characterize members of this market segment.
Let’s Talk!
Let’s discuss
Why is target market selection important for a customer-driven marketing strategy? How might target market selection impact customer satisfaction?
Marketing Management
The task of influencing the level, timing, and composition of demand in a way that will help the organization achieve its objectives.
Demand Management Finding and increasing demand, also
changing or reducing demand, as in demarketing.
The basic Marketing TasksDemand state Marketing Task Formal NameNegative demand Disabuse demand Conversional marketing
No demand Create demand Stimulational marketing
Latent demand Develop demand Developmental marketing
Faltering demand Revitalize demand Remarketing
Irregular demand Synchronize demand Synchoromarketing
Full demand Maintain demand Maintenance marketing
Overfull marketing Reduce demand Demarketing
Unwholesome demand Destroy demand Countermarketing
Marketing in Action
Demarketing is often used to discourage undesirable behaviors.
Is this ad effective?
Visit the Office of National Drug Control Policy ad gallery.
mediacampaign.org
Demarketing
Marketing Management Philosophies
Production Concept Product Concept Selling Concept Marketing Concept Societal Marketing Concept
Marketing Management Philosophies Production Concept
Consumers favor products that are available and highly affordable.
Focus on improving production and distribution efficiency
Product Concept Consumers favor products that offer the
most quality, performance, and innovative features.
Focus on making continuous product improvements
Question
What is a limitation (or drawback) of having a product orientation?
Marketing Myopia Paying more attention to the specific
products than to the benefits and experiences produced by the products
Focus more on the “wants” and lose sight of the “needs”
Marketing Management Philosophies (cont’d) Selling Concept
Consumers will buy products only if the company promotes or sells these product.
Focus on promotions and advertising Marketing Concept
Knowing the needs and wants of target markets and delivering the desired satisfaction better than competitors
Customer-centered “sense and respond” philosophy
Finding the right products for your customers (not vice versa)
Customer-Driven MarketingTwenty years ago, how many consumers would have thought to ask for laptops, wireless headsets, cell phones, MP3 players, PDAs, and digital cameras?
Marketers must often understand customer needs even better than customers themselves do; customers often can’t articulate what they really need.
Marketing in Action
Marketing Management Philosophies (cont’d)
Societal Marketing Concept Delivering value to customers in a way
that maintains or improves both the consumer’s and the society’s well-being
A Simple Model of the Marketing Process
Understand the marketplace
and customer needs and
wants
Understand the marketplace
and customer needs and
wants
Capture value from customers to create profits and customer equity
Capture value from customers to create profits and customer equity
Create value for customers and build customer
relationships
Capture value from customers
in return
Design a customer-driven
marketingstrategy
Design a customer-driven
marketingstrategy
Build profitable relationships and
createcustomer delight
Build profitable relationships and
createcustomer delight
Construct a marketing program
that delivers superior value
Construct a marketing program
that delivers superior value
The Marketing Plan Transforms the marketing strategy
into action
Includes the marketing mix and 4 P’s of marketing…
C
Product Place
Price Promotion
The Marketing Mix - The Four Ps
• Total Product Concept
• Branding
• Packaging
• Warranties
• Product-line assortment
• New product development
C
Product Place
Price Promotion
The Marketing Mix - The Four Ps
• Pricing objectives
• Pricing Policies
• Price Flexibility
• Levels over PLC
• Discounts and allowances
• Geographic terms
• Legal factors
• Markup chain in channels
• Costs
• Demand (price sensitivity)
• Competition/Substitutes
• Price of other products in line
C
Product Place
Price Promotion
The Marketing Mix - The Four Ps
Two Perspectives:
• Distribution Channels
• Logistics
C
Product Place
Price Promotion
The Marketing Mix - The Four Ps
Strategy decisions to blend:
• Personal Selling
• Advertising
• Publicity
• Sales Promotion
TargetConsumers
Product
Place Price
Promotion
Mar
ketin
g
Im
plem
enta
tion
Marketing
Planning
Marketing
Control
Mar
ketin
g
Analys
is
Competitors
MarketingIntermediaries
PublicsSuppliers
Demographic-Economic
Environment
Technological-Natural
Environment
Political-Legal
Environment
Social-Cultural
Environment
The Marketing Process
A Simple Model of the Marketing Process
Understand the marketplace
and customer needs and
wants
Understand the marketplace
and customer needs and
wants
Capture value from customers to create profits and customer equity
Capture value from customers to create profits and customer equity
Create value for customers and build customer
relationships
Capture value from customers
in return
Design a customer-driven
marketingstrategy
Design a customer-driven
marketingstrategy
Build profitable relationships and
createcustomer delight
Build profitable relationships and
createcustomer delight
Construct a marketing program
that delivers superior value
Construct a marketing program
that delivers superior value
Customer Relationship Management (CRM) The overall process of building and
maintaining profitable customer relationships by delivering superior customer value and satisfaction
Customer Perceived Value Customer’s evaluation of the difference between
all the benefits and all the costs of a marketing offer relative to those of competing offers
Customer Satisfaction Extent to which a product’s perceived
performance matches a buyer’s expectations Actual performance > expectations satisfied
A Simple Model of the Marketing Process
Understand the marketplace
and customer needs and
wants
Understand the marketplace
and customer needs and
wants
Capture value from customers to create profits and customer equity
Capture value from customers to create profits and customer equity
Create value for customers and build customer
relationships
Capture value from customers
in return
Design a customer-driven
marketingstrategy
Design a customer-driven
marketingstrategy
Build profitable relationships and
createcustomer delight
Build profitable relationships and
createcustomer delight
Construct a marketing program
that delivers superior value
Construct a marketing program
that delivers superior value
Customer Loyalty and Profitability Customer Lifetime Value (CLV)
The value of the entire stream of purchases that the customer would make over a lifetime of patronage
Share of Customer The share of a company gets of the
customer’s purchasing in their product categories
Customer Equity The total combined customer lifetime
values of all of the company’s customers
Customer Relationship Groups
Projected loyalty
High
Profitability
Low
Long-term customers
Short-term customers
Good fit between company’s offerings and customer’s needs; high
profit potential
Limited fit between company’s offerings and customer’s needs; low
profit potential
Little fit between company’s offerings and customer’s
needs; lowest profit potential
Good fit between company’s offerings and
customer’s needs; highest profit potential
Strangers
Butterflies True Friends
Barnacles
Marketing in Action
To keep customers coming back, Stew Leonard’s has created the “Disneyland of dairy stores.”
Focus on Customer Lifetime Value
Let’s apply Companies measuring customer lifetime value
determine the potential profit from the stream of purchases a customer makes throughout a lifetime of patronage. When banks began tracking the profitability of individual customers, some found that a subset of their customers actually cost them money, rather than generating profits. Should banks “fire” their unprofitable customers? What are the consequences of such an action? How might considering the lifetime value of a customer
impact a bank’s perspective on these customers? How might eliminating unprofitable customers affect a
bank’s customer equity both positively and negatively?
A Simple Model of the Marketing Process
Understand the marketplace
and customer needs and
wants
Understand the marketplace
and customer needs and
wants
Capture value from customers to create profits and customer equity
Capture value from customers to create profits and customer equity
Create value for customers and build customer
relationships
Capture value from customers
in return
Design a customer-driven
marketingstrategy
Design a customer-driven
marketingstrategy
Build profitable relationships and
createcustomer delight
Build profitable relationships and
createcustomer delight
Construct a marketing program
that delivers superior value
Construct a marketing program
that delivers superior value
New Marketing Landscape
Rapid Globalization Ethics and Social Responsibility Not-for-Profit Marketing New World of Marketing Relationships
1. Define marketing and the marketing process.
2. Explain the importance of understanding customers and identify the core marketplace concepts.
3. Identify the elements of a customer-driven marketing strategy and discuss the marketing management orientations.
4. Discuss customer relationship management and creating value for and capturing value from customers.
5. Describe the major trends and forces changing the marketing landscape.
Rest Stop: Reviewing the Concepts