Session 1

Session Objectives

After this session, Students will be able to

learn
• What is Marketing
• Why Marketing
• Some fundamental concepts of marketing
• Scope of Marketing
• What are the different domains of
Marketing
• The transition of Marketing in 21st Century
 Communication

Product/Service
Producer
Consumer
/Seller Money

Feedback

Marketing
The process of developing and maintaining profitable
customer relationship.
Customer Vs Producer
Consumers’ Problems
NEEDS
Needs are the states of felt deprivation
e.g. thirst (water), Hunger (food) etc
Consumers’ Problems
Wants
Wants are the alternatives to satisfy the needs
Consumers’ Problems
Preferences
The criterion of priority for one product on the other
Consumers’ Problems
Demand
Wants backed by buying power, or
willingness to buy and ability to buy
 Value
The ability of a product
to satisfy a need
effectively for which it is
that a company gets in
developed
 Customers form
expectations regarding
value
 Marketers must deliver
value to consumers
Customer
perceived value:
The difference between
total customer value
and total customer cost
Share of
customer: The
portion of the
customer’s purchasing
its product categories Customer Life
Time Value:
The value of the
customers entire stream
of purchases over a
lifetime of patronage
Customer Equity:
The total combined
customer lifetime
values of all of the
company’s customers
 Sharing Value with Customers
Customer relationship
management (CRM)
The overall process of building and
maintaining profitable customer
relationships by delivering superior
customer values and satisfaction.
Customer Satisfaction
The extent to which a
product’s perceived
performance
matches a buyer’s expectation.
Customer Dissatisfaction
The extent to which a
product’s perceived
performance recedes a
buyer’s expectation
Customer Delight
The extent to which a
product’s perceived
performance exceeds a
buyer’s expectation
 Value Delivery Process

Exchange
Process by which one or more
parties give something of
value to each other to satisfy
perceived needs
Transaction
A physical/actual trade of values
between two or more parties
• Monetary Trade
• Barter Trade

Transfer
A one way trade in which one
party gives something to
another and takes nothing in
exchange
e.g. gifts, charities
 ?
What Marketing is

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Marketing

The process of developing and

maintaining profitable customer
relationship.
 Pr
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s
Ne d de
an

Core
Core

and quality
satisfaction,
Value,
Marketing
Marketing
Concepts
Concepts
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and
1. Understanding the Marketplace and
Customer Needs
1. Understanding the Marketplace and
Customer Needs

a.Customer Needs, Wants, and Demands

b.Market Offerings (Products and Services)
c.Value and Satisfaction
d.Exchanges and Relationships
e.Markets
a. Customer Needs, Wants and Demands

Customer Needs, Wants, and Demands

•Need
●
State of felt deprivation
• Wants
●
The form human needs
take as shaped by culture
and individual personality.
•Demands
●
Wants which are backed by
buying power
b. Market Offerings (products and services)
• Market offerings are some combination of
products, services, information, or experiences
offered to a market to satisfy a need or want

• Marketing myopia is focusing only on existing

wants and losing sight of underlying consumer
needs
• Short sightedness by business firms causing
management to define their business too
narrowly)
Product
A market offering (tangible or intangible) that can be
offered in a market for attention, acquisition, use, or
consumption that might satisfy a need or a want valuably.

Produce Experience Idea Property Intellectual

Property
Services
Any benefit or activity that one party can offer to
another, that is essentially intangible and do not occur
in transfer of ownership
Product Support Services
A market offering that is the combination of both Product as well as Services
c. Value and Satisfaction
 d. Exchanges and Relationships

Exchange is the act of obtaining a desired

object from someone by offering something in
return
 e. Markets
Markets are the set of actual and
potential buyers of a product
2. Designing a Customer-Driven Marketing
Strategy
 Marketing Management is the art and
science of choosing target markets and
building profitable relationships with them
– What customers will we serve?
– How can we best serve these customers?
 How to Design Winning Marketing
Strategy

Market segmentation refers to dividing the markets

into segments of customers
Target marketing refers to which segments to go after
Demarketing is marketing to reduce demand
temporarily or permanently; the aim is not to destroy
demand but to reduce or shift it.
Choosing a Value Proposition
The Value Proposition is the set of
benefits or values a company promises
to deliver to customers to satisfy their
needs
Marketing Management
Orientations
 Production Concept is the idea
that consumers will favor products
that are available or highly
affordable
 Product Concept is the idea that consumers
will favor products that offer the most quality,
performance, and features. Organization should
therefore devote its energy to making
continuous product improvements.
Selling Concept is the idea that consumers
will not buy enough of the firm’s products
unless it undertakes a large scale selling
and promotion effort
Have you ever been asked:
Would you like fries with that?
●

Would you like that super sized?

●
 Marketing Concept is the idea that achieving
organizational goals depends on knowing the needs and
wants of the target markets and delivering the desired
satisfactions better than competitors do
Societal Marketing
concept is the idea
that a company
should make good
marketing decisions
by considering
consumers’ wants, the
company’s
requirements,
consumers’ long-term
interests, and society’s
long- run interests
 Senior Mgt Products & Services
Marketing Other Depts. Communications Channels
Dept.

Internal Integrated
Marketing Marketing

Holistic
Marketing
Concept

Performance Relationship
Marketing Marketing
Commodity
Legal
Environment
Ethics Customers Partners
Sales Revenue
Channel
Brand & Customer Equity
3. Preparing an Integrated Marketing
Plan and Program

The Marketing Mix is the set of tools (four Ps) the firm
uses to implement its marketing strategy. It includes
product, price, promotion, and place.
4. Building Customer Relationships

Customer Relationship Management (CRM)

The overall process of building and maintaining

profitable customer relationships by delivering
superior customer value and satisfaction
Relationship Building Blocks: Customer Value
and Satisfaction
Customer Relationship Levels and Tools
The Changing Nature of Customer
Relationships

•Relating with more carefully selected

customers uses selective relationship
management to target fewer, more
profitable customers

•Relating more deeply and interactively by

incorporating more interactive two way
relationships through blogs, Websites,
online communities and social networks
 Partner Relationship Management

involves working closely with partners in

other company departments and
outside the company to jointly bring
greater value to customers
  Partners Inside the company is
every function area interacting
with customers
 Old Thinking
 New Era
 Partners Outside the company is
how marketers connect with their
suppliers, channel partners, and
competitors by developing
partnerships
Partner Relationship Management
•Supply Chain is a channel that
stretches from raw materials to
components to final products to
final buyers
•Supply Management
•Strategic Partners
•Strategic Alliances
5. Capturing Value from Customers

Creating Customer Loyalty and Retention

•Customer lifetime value is the value of
the entire stream of purchases that
the customer would
make over a lifetime of
patronage
 Growing Share of Customer

Share of customer is the portion of

the customer’s purchasing that a
company gets in its product
categories
What’s your favourite Brand?

What products would you like to see your favourite brand

come out with?
Customer Equity is the total combined
customer lifetime values of all of
the company’s customers
Building Customer Equity
•Buildingthe right relationships with
the right customers involves treating
customers as assets that need to be
managed and maximized

•Different
types of customers
require different relationship
management strategies
– Build the right relationship with the
right customers
 Building the Right Relationships
with the Right Customers

Butterflies
True Friends
Good fit between
High company’s offerings Good fit between company’s
and customer’s offerings and customer’s
needs; high profit needs; highest profit potential
Profitability potential

Strangers
Little fit between
Barnacles
Low
company’s offerings Limited fit between
and customer’s company’s offerings and
needs; lowest profit customer’s needs; low profit
potential potential
Short-term customers Long-term customers

Projected Loyalty
 Marketing Functions
Information Buying

Risk Taking Selling

Universal
Marketing
Marketing
Functions
Functions
Financing Transporting

Standardizing
Storing
and Grading
So, What Is Marketing?
Pulling It All Together

Chapter 1 – Slide 54