Principles of Marketing

Chapter One: Creating and Capturing Customer Value

What is Marketing

Old concept: Marketing means telling and selling. New concept: Marketing means satisfying consumer needs. Marketing is an integrated process which includes: -assessing and measuring needs of customers for exploring new market -developing and exchanging a product with value, satisfaction and quality -pricing it effectively to minimize cost and to maximize profit -placing it effectively to make it available to consumers -promoting it effectively to attract and retain customers -finally, maintaining relationship with customers to keep current customers and to attract new ones.

What is Marketing What is Marketing?

Marketing is a process by which companies create value for customers and build strong customer relationships to capture value from customers in Return. Marketing is an exchange process dealing with pricing , promotion and distribution of goods and services or ideas to satisfy individuals or organizations needs or wants or demands.

Marketing Process MARKETING IN THE NEW MILLENNIUM

A Social & Managerial Process Individuals & Groups obtain What They Need & Want Exchanging Products & Services of Value With Others

A Social & Managerial Process

Dealing with pricing, promotion,& distribution of ideas, goods & services

Creating Exchanges to Satisfy Individual & Organizational Goals

American Marketing Association, 2003

The scope of marketing

Marketing is typically seen as the task of creating, promoting, and delivering goods and services to consumers. In fact, marketing people are involved in marketing ten types of entities.

1. Goods(all visible products,such as, pen or book) 2. Services (all invisible products, such as, hotel or hospital) 3. Experiences (amusement park or movie theatre) 4. Events(trade shows or sport events) 5. Persons(actors or politicians) 6. Places(tourist spots, such as, coxs bazar ) 7. Properties(real estate, stock, or bonds) 8. Organizations(Philips, lets make things better) 9. Information (school, college or university) 10. Ideas (say no to drugs, acid throwing is a crime)

Understanding the Marketplace and Customer Needs

Core Concepts

Customer needs, wants, and demands Market offerings Customer Value and satisfaction Exchanges and relationships Markets

Understanding the Marketplace and Customer Needs

1. Needs, Wants, and Demands Needs describe basic human requirements. Needs become wants when they are directed to specific objects that might satisfy the need. Demands are wants for specific products backed by an ability to pay. Marketers do not create needs: Needs preexist marketers. Marketers, along with other societal influences, influence wants.

Understanding the Marketplace and Customer Needs

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

Understanding the Marketplace and Customer Needs

6. Exchange and Transaction Exchange involves obtaining a desired product from someone by offering something in return. For exchange we need:

at least two parties, each party with something of value to the other, each party capable of communication and delivery, each party being free to accept or reject, and each party considers it appropriate and desirable to deal with the other.

Transaction involves: at least two things of value, agreed upon conditions, a time of agreement, and a place of agreement.

Understanding the Marketplace and Customer Needs

7. Market: A set of all actual and potential buyers of a product or service. 8. Relationships and Networks: Building longterm mutually satisfying relation with key parties customers, suppliers, distributors, people.

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?

Designing a Customer-Driven Marketing Strategy

Selecting Customers to Serve

Market segmentation refers to dividing the markets into segments of customers Target marketing refers to which segments to go after
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 PHILOSOPHIES
This philosophies or concepts guide marketing managements actions to achieve goals. THE PRODUCTION CONCEPT THE PRODUCT CONCEPT THE SELLING CONCEPT THE MARKETING CONCEPT THE CUSTOMER CONCEPT THE SOCIETAL MARKETING CONCEPT

The Production Concept

This concept says that consumers will favor products that are available and highly affordable and so the organization should focus on production and distribution efficiency. For example: WASA & minipack shampoo of Lever Brothers
Starting point Production & Distribution efficiency

Focus

Means

Ends Earns Profit Through Low Per Unit Production Cost

Affordability & Availability

Economies of Scale

The Product Concept

This concept says that consumers will favor products that offer the most quality, performances and features and so the organization should focus on continuous product improvement. For example: Coca cola and McDonald's

Starting point

Focus Attributes &Features

Means Quality & Performance

Ends Profits through superior products

Product

The selling concept

This concept says that consumers will not buy enough of the organizations products unless it undertakes a large scale selling and promotion effort. For example: private university, political party, real estate and insurance.
Starting point

Focus

Means

Ends Profits Through sales volume

Factory

Products

Selling & Promotion

The Marketing concept

This concept says that the organization should determine the needs and wants of target markets and deliver the desired satisfactions more effectively and efficiently than competitors. ( sense and respond philosophy) For example: British Airways , we are not satisfied until you are.

Starting point Target Market

Focus

Means

Ends

Customer Needs

Integrated Marketing

Profits through Customer Satisfaction

The Customer Concept

This concept says that the organization should focus on individual customers needs and wants to achieve profitable growth through capturing customer share,loyalty and lifetime value. For example: Berger color bank
Starting point

Focus

Means

Ends

Individual Customer

Customer Needs & Values

One to One Marketing Integration & Value Chain

Profitable Growth Through Capturing Customer Share,Loyalty &Lifetime Value.

The Societal Marketing Concept This concept says that the organization should determine the needs and wants of target markets and deliver the desired satisfactions more effectively and efficiently than competitors in a way that preserves or enhances the consumers & societys well being. For example : Dutch Bangla bank & Toyota cars
Society (Human Welfare)

Consumers (Want Satisfaction)

Company (Profits)

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. Integrated marketing program is a comprehensive plan that communicates and delivers the intended value to chosen customers.