Principles of Marketing

Understanding Marketing for the

21st Century
Lesson 1

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Learning Objectives:
- To understand and appreciate the importance and
scope of marketing
- To describe the philosophies and orientations of
marketing
- To explain the core concepts and meanings of
marketing terms
- To elaborate the changes in modern marketing
Lesson 1

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Marketing in the 21st Century

Marketing Principles
Marketing is defined as the set of activities
that identify, anticipate and satisfy customers
requirements profitably.
(CIMUK)
Process of creating, communicating, and
delivering value to customers and for managing
customer relations that benefit the organization.
(Kotler, Armstrong)
Lesson 1

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Marketing in the 21st Century

Scope of Marketing
Marketers are involved in
Goods
Services
Events
Experiences
Persons
Places
Properties
Organizations
Information
Ideas

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Some other core concepts

Customer Needs, Wants, and Demands
Needs are states of deprivation. Some needs
are:-

Lesson 1

Physical

Social

Intellectual

Food, air,
clothing

emotions,
friends

study, education

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Some other core concepts

Wants

are a form of strong desire for something.

( I need water but I want Spring water)
Demands

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are purchases backed by buying power in a

social market. (money talks) (e.g. no demand
for TV in Nepal.)
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Some other core concepts

Product offering
It is the value proposition:- a of values or benefits
why a customer should purchase from the company.

e.g. Offer you BMWs reliable performance;

A380 Boeing excellent experience
Customer satisfaction

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Value and performance over competitors

Adding even more value and benefits
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Some other core concepts

Market Exchange/Transaction
process of obtaining a product by offering
money or something else!

Transactions are data/numbers

Segmentation Targeting Positioning

Divide into groups

Lesson 1

Choose groups

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How to attract?

Understanding the Marketplace

and Customer Needs

Market OfferingsProducts, Services, and

Experiences
Marketing myopia is focusing only on existing
wants and losing sight of underlying
consumer needs
Exchange is the act of obtaining a desired object
from someone by offering something in
return
Spring Term 2007/2008

Marketing Principles

1-9

Some other core concepts

Channel Types

Distribution channel wholesalers / retailers

Communication channel media, CCTV

Service channel Advertising, banking etc

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Understanding the Marketplace

and Customer Needs
Marketing system consists of all of the actors in the system who
are affected by major environmental forces

Marketing Principles
Spring Term 2007/2008

Some other core concepts

1. Needs, Wants,
and Demands

2. Product offering

5. Channel / markets
3.
Value/Quality/
Customer
satisfaction
4. Market Exchange/Transaction
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Market Orientations
Orientations/Concepts/Philosophies
Production concept
Product concept
Selling concept
Marketing concept
Societal Marketing concept
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Market Orientations
Production concept is the idea that
consumers will favor products that are available
or highly affordable.

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Mass production/distribution of products

Low costs, efficient (fast)

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Market Orientations
Product concept is the idea that consumers will
favor products that offer the most quality,
performance.

Focus is on design and improvements

(healthier food / cosmetics that make you look 20

years younger)
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Market Orientations

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Inside-out approach
Company-centric

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cu
st o
me
rs

Selling concept is the idea that consumers

will not buy enough of the firms products
unless it undertakes a large scale selling and
promotion effort.

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Spring Term 2007/2008

Marketing Principles

Marketing concept is a
modern idea that achieving
organizational goals depends on
knowing the needs and wants of the
target markets.
Outside-in approach

Satisfaction and relationships are

customer-centric

Lesson 1

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cu
sto
me
rs

Market Orientations

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Designing a Customer-Driven Marketing Strategy

Marketing Management Orientations

Societal marketing concept is the idea that a
company should make good marketing
decisions by considering consumers wants,
the companys requirements, consumers
long-term interests, and societys long-run
interests
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Marketing Principles

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Market Orientations
Holistic Marketing concept is a new practice in
marketing.
Relationship marketing -- networks
Integrated marketing -- (4Ps / 4Cs / SIVA)
Internal marketing staff coordination
Performance marketing
- accountability / social responsibility (cause
related programs)

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Building customer relationship

customer relationship management- The overall
process of building and maintaining profitable
customer relationships by delivering superior customer
value and satisfaction.

customer perceived value- The customers evaluation

of the difference between all the benefits and all the
costs of a marketing offer relative to those of competing
offers.
Retaining customers:
Customer lifetime value- The value of the entire stream
of purchases that the customer would make over a
lifetime of patronage.

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Dynamic 21st Century Marketing

Customer equity- The total combined customer
lifetime values of all of the companys customers.

Consumer capabilities
- Affluence (rich)
- More choices
- Information exchange
- Compare information
- Give opinions / feedback
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Customer relationship groups

High Profitability

Butterflies

True friends

Good fit between

companys offerings
and customers needs;
high profit potential

Good fit between companys

offerings and customers
needs; highest profit potential

Low profitablilty

Strangers

Barnacles

Little fit between

companys offerings
and customers needs;
lowest profit potential

Limited fit between companys

offerings and customers
needs; low profit potential.

Lesson 1

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Short-term customers Long-Term customers

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Spring Term 2007/2008

Marketing Principles

Spring Term 2007/2008

Marketing Principles