SLIDE principles of marketing chapter 1

WHAT IS MARKETING? LEARNING OBJECTIVES 1.1 Core marketplace concepts • Marketing and the marketing process • Needs, wants and demands • Market offerings • Value and satisfaction • Exchanges and relationships • Markets 1.2 Marketing management orientations 1.3 Customer relationship management 1.4 Major marketing trends and forces MARKETING • Definitions “The management process which identifies, anticipates, and supplies customer requirements efficiently and profitably” - UK’s Chartered Institute of Marketing - MARKETING • Definitions “The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals” - American Marketing Association, 1985 - “Marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders” - American Marketing Association, 2004 MARKETING • Definitions “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.” - Philip Kotler, 2012 - “In a business context, marketing is a the process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return.” - Philip Kotler, 2012 MARKETING • Key points  Marketing is a process  Marketing is customer value-driven  Marketing satisfies customer needs efficiently and profitably (exchange)  Marketing still takes place (customer relationship) MARKETING • The marketing process (Kotler, 2012) 1.1 CORE MARKETPLACE CONCEPTS Customer Needs, Wants and Demands Market offerings Markets MARKETING Exchanges and relationships Value and satisfaction NEEDS, WANTS, DEMANDS Needs • States of deprivation • Physical—food, clothing, warmth, safety • Social—belonging and affection • Individual—knowledge and self-expression Wants • Form that needs take as they are shaped by culture and individual personality Demands • Wants backed by buying power MARKET OFFERINGS • Market offerings – Some combination of products, services, information, or experiences offered to a market to satisfy a need or want – Including: Physical products People Organizations Ideas Services Places Information 10 MARKETING • The marketing process (Kotler, 2012) 21 MARKETING STRATEGY Customer value – driven marketing Which customers to serve? (Who is the target market?) How to best serve those customers? (What value(s) offered to those customers?) 22 MARKETING • The marketing process (Kotler, 2012) 23 MARKETING MIX 4Ps of Marketing (McCarthy, 1960) 4Cs of Marketing (Lauterborn, 1990) P1 Product C1 Customer solution P2 Price C2 Customer cost P3 Place C3 Convenience P4 Promotion C4 Communication 24 MARKETING MIX • Marketing mix – The set of marketing tools the firm uses to implement its marketing strategy Quality | Design | Advertising | Feature | Brand| Packaging | Label | Services Pricing strategies| New product pricing strategies | Product mix pricing strategies| Price adjustment strategies PRODUCT PROMOTION 4Ps PRICE PLACE Personal selling | Sales promotion| PR | Direct marketing Marketing channels | Channel design decisions | Channel management decisions| Marketing logistics & SCM 25 MARKETING • The marketing process (Kotler, 2012) 26 CUSTOMER RELATIONSHIP MANAGEMENT – In the broadest sense, customer relationship management (CRM) is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction – On average, it costs 5-10 times as much to attract a new customer as it does to keep a current customer satisfied – Key to CRM = Customer Value + Satisfaction 27 CUSTOMER RELATIONSHIP MANAGEMENT • Customer relationship levels Basic Reactive Accountable Proactive Partnership A salesperson sells products and there’s no communication or customer feedback involved A salesperson sells the product and encourage customers to supply feedback The seller contacts the customer shortly after the sale to inquire whether the product meets expectations The seller regularly contacts to discuss the use of the product, also asks for feedback if the product or service can be improved The company works continuously with the customer to ensure that the customer gets even more out of the product 28 CUSTOMER RELATIONSHIP MANAGEMENT 29 CUSTOMER RELATIONSHIP MANAGEMENT • Customer relationship tools Financial benefits Better price; Special discount; Rewards program Social benefits Personalization; Special gifts or greeting cards on special occasions; Customers’ preferences Structural ties Customer service; Speed of service 30 CUSTOMER RELATIONSHIP MANAGEMENT • Trends – Customer-engagement marketing – Consumer-generated marketing 31 PARTNER RELATIONSHIP MANAGEMENT • Partner Relationship Management – PRM – Working closely with partners in other company departments and outside the company to jointly bring greater value to customers – Internal: Functional departments – External: Suppliers, Intermediaries, Competitors 32 CUSTOMER LOYALTY • Customer loyalty – A deeply held commitment to rebuy or re-patronize a preferred product or service consistently in the future, thereby causing repetitive same-brand or same brand-set purchasing, despite situational influences and marketing efforts that have the potential to cause switching behavior (Oliver, 1999) • Conceptualization of loyalty – Behavioral loyalty – Attitudinal loyalty 33 CURRENT MARKETING TRENDS # Marketing to the bottom of the pyramid # Global marketing # Digital and social media marketing # Sustainable marketing Social responsibility in marketing # Not-for-profit marketing 34 MARKETING PROCESS Capture value from customers in return Create value for customers and build customer relationships Understand the marketplace and customer needs and wants Design a customer value-driven marketing strategy Construct an integrated marketing program Engage customers, build profitable relationships Research customers and the marketplace Select customers to serve: market segmentation and targeting Product Customer relationship management [Chapter 1, 3] Manage marketing information and customer data [Chapter 2] [Chapter 5] Price [Chapter 4] [Chapter 6] Decide on a value proposition: differential and positioning Place [Chapter 4] Harness marketing technology (e-Marketing) [Chapter 7] Promotion Partnership relationship management Capture value from customers to create profits and customer equity Create satisfied, loyal customers Capture customer lifetime value Increase share of market and share of customer [Chapter 8] Manage global markets (Global marketing) Ensure environmental and social responsibility (Social marketing) 35 ... value(s) offered to those customers?) 22 MARKETING • The marketing process (Kotler, 2 012 ) 23 MARKETING MIX 4Ps of Marketing (McCarthy, 19 60) 4Cs of Marketing (Lauterborn, 19 90) P1 Product C1 Customer... welfare) Societal marketing concept CONSUMERS (Want satisfaction) COMPANY (Profits) 20 MARKETING • The marketing process (Kotler, 2 012 ) 21 MARKETING STRATEGY Customer value – driven marketing Which... Marketing to the bottom of the pyramid # Global marketing # Digital and social media marketing # Sustainable marketing Social responsibility in marketing # Not-for-profit marketing 34 MARKETING PROCESS