CHAPTER 2

MARKETING AND MARKETING

MANAGEMENT
CREATING CUSTOMER VALUE AND
SATISFACTION
PREPARED BY
J O B E L LY N YUKIM AND ELSON DAGALA
 WHAT IS MARKETING

Creating customer value and satisfction are the very heart of

modern markeing thinking and practice
-Telling and selling
-Satisfying customer
Goal - attract new customer by promising superior value
and keep and grow current customers by delivering
satisfaction.
MARKETING DEFINED
Process by which individuals and group obtain what they need and want
through creating and exchange product and value with other.
Needs, wants, and deman

Human needs are the most basic important basic concept underlying marketing.
A human need is a srtate of felt deprivation.
1. Human have many complex needs
A. Basic, physical needs for food , clothing warmth and safety
B. Social needs for belonging and affection
C. Individuals need for knowledge and self-expression
2. These needs are part of the basic human makeup.

Human wants is the form that the human need take as shape by culture and
individual personality

Demand are human want that are backed by buying power

PRODUCT, SERVICES AND EXPERIENCE
PRODUCT is anything that can be offered in the market to satisfy the need
and wants of a customer.
SERVICES is an activity or benefit offered for sale that is essentially
intangible and does not result in the ownership of anything.

VALUE, SATISFACTION, AND QUALITY

CUSTOMER VALUE is the difference the value that the customer
gains from owning and using aproduct and the cost s of
obtaining the product
CUSTOMER SATISFACTION depends on a product ‘s perceive
performance in delivering value to a buyer’’s expectation.
QUALITY has a direct impact on the prodcut or service performance.
Defined interms customer satisfaction.
 VALUE, SATISFACTION, AND QUALITY
Total Quality Management (TQM) is an approach which all the
company’s people are envolved in constantly improving the
quality of a product, services and business processes. An
extension of TQM is ROQ (Return Of Quality)

Marketers have two major responsibilities in a quality-centered

company.
1. They must participate in forming strategies that will help the
company win through total quality excellence- they must be
customer’s watchdogs.
2. Marketers must deliver marketing quality as well as
production quality.
HOW DO CONSUMERS CHOOSE AMONG PRODUCT AND SERVICES?

Value gained from owning a

product and cost of obtain the
product is customer value

Product’s perceive performance

in delivering value relative to
buyer’s expectation is customer
satisfaction

Top quality management involves

improving quality of products,
services and business processes

Customer’s Driven Quality

WHAT ARE CONSUMER’S NEEDS AND WANTS?

Needs – state of felt deprivation including physical, social and individual

needs
Wants – forms that a human need takes as shaped by culture and
individual personality
Demand – humans wants backed by buying power
EXCHANGE, TRANSACTION, AND RELATIONSHIP
Exchange is a core concept of marketing, a transaction is a trade of values
between the two parties.
Marketers need to build a long-term relationship with value customers, distributions,
dealer and supplier. To build this relationship, the marketers can add:
1. Financial benefits
2. Social benefits
3. Structural ties
4. Seek profitable customer
MARKET
Is the set of actual and potential buyers of a product.
Place where buyer and seller gather to exchange good
A collection of buyers and seller who transact particularly product class as in the
house market.
Modern economies operate in the principles of division of labor, where each person
specialize in producing something , receives payment, and buys needed thing
with this money.

MARKETING: CONCEPT OF MARKETING

1. Sellers must search for buyers, identify their needs, design good
products and services, set prices for them, promote them, and store and
deliver them.
2. Includes all elements necessary to bring buyers and sellers together.
MODERN MARKETING SYSTEM

Suppliers
(marketer)

Marketing End-user
suppliers
intermediates market

competetors
MARKETING MANAGEMENT
Markeitng management is defined as the analysis, planning, implementation,
and control of progress designed to create build and maintain beneficial
exchange with target buyers for the purpose achieving organizational objectives.

Marketing Management Involves managing demand,

which involves managing
customer relationship
Demand Management Finding and increasing
demand, also changing or
reducing demands such as in
de-marketing
Profitable Customer Attracting new customers and
Management retraining and building
relationship with current
customer
DEMAND MANAGEMENT
Concerned not only with finding and increasing demand, but also with changing or
even reducing it.
1. DE marketing's aim is to reduce demand temporarily or permanently, that is,
move traffic and from a popular tourist attraction during peak season.
2. In reality, marketing management is really demand management

BUILDING PROFITABLE CUSTOMER RELATIONSHIP

MANAGING DEMAND MEANS MANAGING CUSTOMERS

1. Demand comes from new customer and repeat customer

2. Besides making effort to attract customer, marketers are going all out retain and
build relationship with existing customer.
The key to successful customer retention is superior customer and value and
satisfaction
MARKETING MANAGEMENT PRACTICE

Stage 1: Entrepreneurial Management

Stage 2: Formulated Marketing

Stage 3: Entrepreneurial Marketing

MARKETING MANAGEMENT PHILOSOPHIES

PRODUCTION CONCEPT

PRODUCT CONCEPT

SELLING CONCEPT

MARKETING CONCEPT

SPACIETAL MARKETING CONCEPT

THE PRODUCTION CONCEPT
-Focus on improving production and distribution efficiency
THE PRODUCT CONCEPT
-Offer the most quality, performance and features
-devote its energy to making continuously product improvements
THE SELLING CONCEPT
-consumers will not buy an enough product of the organization’s product unless the
organization undertakes a large-scale selling
MARKETING CONCEPT
Achieving organizational goals depends on determining the needs and want of the
target markets and delivering the desire satisfaction more effectively and
efficiently than competitors do.
The marketing and selling concepts are often confused: the primary differences are:
1. Inside-out perspective – focus on existing products and uses heavily promotion
and selling effort.
2. Outside – in perspective – focuses on customers needs, values, and satisfaction.
THE SOCIETAL MARKETING CONCEPT
The organization should know the needs, wants, and interest of target customers. It
should deliver the desire satisfaction effectively and efficiently than competitors
Society
(Human Welfare)

Societal
Marketing
Concept
Consumers Company
(want satisfaction) (profits)
 MARKETING CHALLENGES INTO THE NEW “CONNECTED”
MILLENNIUM

Marketing operates within a dynamic changing environment

Connection with customers

Connecting more selectively
Connecting for life
Connecting directly

Connecting with Marketing

Connecting Technologies Customers
Computer Information Connecting with other company
Communication departments
Connecting with suppliers and distributers
Transportation
Connecting through strategic alliances

Connection with world around us

Global Connection
Connection with values and
responsibilities
Broadened Connection
TECHNOLOGIES FOR CONNECTING

Create product and

Learn about and track
services tailored to meet
customers with database
customers need

Connecting technologies
in computers,
telecommunication, and
transportation
To help to:

Communicate with
customers in groups or Distribute products more
one-on-one effectively and efficiently
CONNECTION WITH CUSTOMERS
•Most marketers are
targeting fewer, potentially more profitable customers

•Asking
what values does the customers bring to the organization?
Are they worth pursuing?

•Connecting for customer’s lifetime

 CONNECT FOR A CUSTOMER’S LIFETIME
Rather than always looking for a new customers, the focus now shifted to keeping current
customers and building lasting relationship based on superior satisfaction and value.
Companies are spending more time considering “share of customers” and less time worrying
about “share of market”
1. Employees are being trained in cross-selling
2. Up selling is now a common practice
Companies now are taking advantage in new technology to connect directly
1. Available via telephone
2. Selling and purchasing online
3. Direct selling through channel
4. Combination of traditional and direct-selling method
Direct marketing is defining the buyer’s role in connecting with the sellers
1. Buyers are now active participants in shaping the marketing offer and process
2. Some companies allow their buyers to design their own products online
3. Some marketers have hailed direct marketing as the “market model of the millennium
DIRECT CONNECTION WITH CUSTOMERS
More companies are use technology to connect more directly to the customers
ex:
-Via telephone, mail-orders, and others
-firm sell only via direct channels (ex. Amazon.com)
Some buyers designed their own products online such as at www.landsend.com

CONNECTION WITH MARKETING’S PARTNER

Most of companies today are relaying to their partnership with other firms
1. Supply chain management. Describe a longer channel, stretching raw materials to
components to final product that are carried to final buyer.
2. Strategic alliances. Need strategic partners. They need to find a partner that can
complement their strength and offset their weaknesses

Connecting inside the company Connecting with outside

-every employee must be customer- partners
focused -Supply chain management
-teams coordinate efforts toward
-strategic alliances
customers
CONNECTION WITH THE WORLD AROUND US

Exporting and importing

Hybrid goods and service

Global connection Good global network

World

Broadening Values
connection connection

Not-for-profit businesses Social responsibility

Government agencies showed an Environmental responsibility

increased interest in marketing
THE NEW CONNECTED WORLD OF MARKETING
The new marketing thinking believes that improving customer knowledge and
connection is a corporate goal
a. Target profitable customer
b. Find innovate ways to capture and keep customers
c. Direct connection and build lasting customers relationship
1. use targeted media
2. integrate communication
3. use technologies to provide connection
4. view suppliers and distributers as partner, not advertiser
5. deliver superior value
CHAPTER II:THE PHILIPPINE MARKETING
ENVIRONMENT
The Philippine market is an attractive and dynamic one. It is fast growing in all areas:
geography, communication, transportation, educational business, tourism,
marketing, banking, exports, manufacturing, agriculture and etc. In this chapter,
we will explore, them delve into the dimension of markets and the factors
affecting consumption.

Marketing Environment
•consist of the actors and forces outside marketing's that affect
marketing’s management ability to develop and maintain
successful relationship to develop with it target customers.
•Includes
Microenvironment – forces close to the company that affect its
ability to serve its customer.
Macroenvironment – larger societal forces that affect the
microenvironment
WHAT IS MARKET?
•A place where the buyers and sellers meet.
• People with needs and wants to be satisfied, who can afford and willing to spend.
• Set of actual and potential buyers of products or services.
Marketing environment consist of actors and forces that can develop and maintain
successful relationship with its customers.

Macroenvironment Microenvironment
1. The company itself (including 1. Demography
departments) 2. Economy
2. Suppliers 3. Nature
3. Marketing channel firms 4. Technology
(intermediaries) 5. Politics
4. Customer markets 6. Culture
5. Competitors
6. The public
 COMPANY’S MICROENVIRONMENT
A company’s microenvironment consist of six factors that affect its ability to serve customers. These
actors combined to make up the country’s value delivery system. These actors are:
THE COMPANY
1. Top management is responsible for setting the company’s mission, objectives, broad strategies
and policies.
2. Marketing managers must make decision within the parameters established by top manager.
3. Marketing managers must also work with other company’s department.

COMPANY’S INTERNAL ENVIRONMENT

TOP
FINANCE R&D PURCHASING MANUFACTURING ACCOUNTING
MANAGEMENT

MARKETING
SUPPLIERS
They are the one who provide resources to the company to produce goods and
services. They are an important link in the company’s overall customer’s delivery
system.
1. One consideration is to watch supply availability ( such as supply shortage)
2. Another point of concern is the monitoring if price trends of key inputs.

MARKETING INTERMEDIARIES
Are firms that help to promote, sell and distribute the goods or products to find
buyers.
1. Resellers are distribution that help the company to find customers or make sales
to them
2. Includes wholesalers and resellers that buy and resell the products
3. Resellers perform an important function more cheaply than company can perform
itself. However, seeking and working with resellers are not easy because of the
power that some demands.
Physical distribution - firms help the company to stock and move goods from their
point of origin to their destination.
Marketing services agencies – help the company to promote its product to the right
market.
Financial intermediaries – help finance transaction and insure against risk associated
with buying and selling goods.

CUSTOMERS
Company must study its customers market closely since each market has its own
especial characteristics. This markets normally includes:
1. Consumer market – individual or household that buy a product for personal use.
2. Business market – for further processing or use in their production.
3. Reseller market – buy a product and resell it to other customers at a profit.
4. Government markets – produce public service.
5. International market – including government in foreign countries.

COMPETITORS
Every company faces a wide range of competitors. Company must secure a strategic
advantage to take over competitors to be successful in market place.
THE COMPANY’S MICROENVIRONMENT
• Customers
-five types of markets that purchase a company’s good and services
• Competitors
-serve target customers with similar product and services
-company must gain strategic advantage against these organization.
• Public
- group that has an interest in or impact or an organization’s ability to achieve its
objective

PUBLIC
Group that has an interest in or impact or an organization’s ability to achieve its
objectives.
It can defined as:
1. Financial public – this influences the company's ability to obtain fund. (ex : banks)
2. Media public – this carries news, features and editorial opinion (newspaper)
3. Government public – the marketing must tae government develops into account.
 CO
4. Citizen-action public – a company may questioned by consumers organization,
environmental group and others. Public relation can help the company stay in
touch with consumers.
5. Local public – large companies usually appoint a community relation officer to deal
with the community, attend meeting, answered question and contribute
worthwhile causes.
6. General public – company needs to be concerned about the general public’s
attitude toward products and activities. The public image can affects its buying.
7. Internal public – positivity inside the company. Having a better relationship from top
management to lower management.

COMPANY’S INTERNAL ENVIRONMENT

Government Citizen-action
Local publics
publics publics
General
Media publics
publics
Financial COMPANY Internal
publics publics
 COMPANY’S MACROENVIRONMENT
The company and all of the actors operate in a larger macroenvironment of forces opportunity
and pose threats to the company. Major forces includes:
DEMOGRAPHIC ENVIRONMENT
- it involves people make-up markets.

THE COMPANY’S MACROENVIRONMENT

Natural Technological
forces forces

Economic Political
forces forces

Demographic COMPANY Cultural

forces forces