2. What Is Marketing?
Marketing is a social process by which
individuals and groups obtain what they need
and want through creating and exchanging
products and value with others
PHILIP KOTLER
Simply put:
Marketing is the delivery of customer
satisfaction at a profit.
4. Understanding the Marketplace
and Customer Needs
Core Concepts
Customer needs, wants, and demands
Market offerings (P&S)
Value and satisfaction
Exchanges and relationships
Markets
5. Needs, Wants And Demands
• NEED : A state of felt deprivation of
some basic satisfaction (Food,
Clothing, Shelter, Belonging etc. )
•
WANTS : Wants are desires for
specific satisfiers of the deeper
needs. Needs are few and wants are
many .
•
DEMANDS : are wants backed by -----Ability to buy and Willingness to
buy
6. Understanding the Marketplace
and Customer Needs
Customer Needs, Wants, and 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
7.
8. Products / Offers / Satisfiers /
Resources
Anything that can be offered to someone
to satisfy a need or want is a product .
Product refers to physical object
Services refer to intangible object
9. Value and Satisfaction
•
Value is the customers’ estimate of the Product’s
capacity to satisfy a set of goals
•
Value is the ratio between what the customer gets
and what he gives (V=B/C)
•
Customer gets benefits & assume costs
•
WHEN :Customer Expectance=Performance
(satisfied)
•
Customer Expectance>Performance (dis-satisfied)
•
Customer Expectance<Performance (Highly
satisfied)
10. 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
11. Understanding the Marketplace
and Customer Needs
Customer Value and Satisfaction Expectations
Customers
• Value and
satisfaction
Marketers
• Set the right level of
expectations
• Not too high or low
12. Three Basic Principles Of Marketing
(1) The Customer Value and Value Equation:
V=B/P
Where; V=Value
B= Perceived Benefits
P= Price
14. Designing a Customer-Driven
Marketing Strategy
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
17. Understanding the Marketplace
and Customer Needs
Exchange is the act of obtaining a
desired object from someone by offering
something in return
18. Exchange and Transaction
• Exchange is the act of obtaining a desired
product by offering something in return .
• Exchange takes place when 5 conditions are
satisfied:
(a)
Two parties should be there
(b)
Each party must have something of value to the
other
(c)
Each party is capable of communication & delivery
(d)
Each party is free to accept or reject the offer
(e)
Each party believes that it is appropriate to deal with
the other party
19. Exchange and Transaction
Exchange is a process rather than event. It
is a value creating process because it
normally leaves both parties better off.
A transaction is a trade of values between
two or more parties ( A BARTER
TRANSACTION OR A MONETARY
TRANSACTION ).
21. Strategic Concept of Marketing
•
Shifted the focus of Marketing from
Product or customer to the CUSTOMER
IN THE CONTEXT OF THE BROADER
EXTERNAL ENVIRONMENT .
•
To succeed, marketers must know the
customer in a context including the
competition, Govt. Policy& regulation
and the broader economic, social and
political macro forces that shape the
evolution of market.
22. Strategic Concept of Marketing
Shifted the Marketing Objectives from
PROFIT TO STAKEHOLDER BENEFITS.
Stakeholders are individuals or groups
who have an interest in the activity of a
company . They include-----The employees
and management, Customers, Society,
Shareholders, Financiers/ Bankers, Government
etc.
23. Strategic Concept of Marketing
Strategic Marketing Concept is Strategic
Management, which integrates marketing
with the other management functions.
( Major task is Profit for Stakeholders’
benefits ).
24. 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?
25. Marketing System
Marketing is concerned with the flow of
goods and services from the points of
production
to
the
points
of
consumption.
There is a systematic arrangement of
these functions of marketing to move
the goods and services to the needy
persons. This system is essential to the
creation of time, place and possession
utilities.
26. Marketing System
• A dynamic marketing system must be
willing to undertake the following
specific activities:
1.
2.
3.
4.
Define market area.
Research consumer wants and needs.
Develop and redevelop product / service.
Select, train, motivate and control human
resources.
5. Develop sales approach and advertising
support.
27. Goals Of The Marketing System
1. Maximize Consumption
2. Maximize Consumer Satisfaction
3. Maximize Choice
4. Maximize Life Quality
28. Three Basic Principles Of Marketing
The essence of marketing can be
summarized in three great principles.
first identifies the purpose and task
of marketing,
second is the competitive reality of
marketing
Third is the principal means for
achieving the first two.
29. Three Basic Principles Of Marketing
Competitive or Differential Advantage :
The total offer must be more attractive
than that of the competition in order to
create a competitive advantage.
Focus or the Concentration of Attention :
The task of creating Customer Value at a
Competitive advantage.
30. Customer As The Controlling Function
Production
Finance
CUSTOMER
Marketing
Personnel
31. Marketing As The Integrative Function
Production
Marketing
CUSTOMER
HR
Finance
32. Three Levels Of Marketing
Responsive Marketing
Anticipative Marketing
Need Shaping Marketing
33. Responsive Marketing
It is the form of marketing when some
company defines an existing clear need and
prepare an affordable solution.
(Recognizing that women wanted to spend
less time for cooking and cleaning, led to
the invention of modern washing machine,
microwave oven etc.)
34. Anticipative Marketing
It is a form of marketing when a company recognize an
emergent or latent need, and come out with an
affordable solution. Evian, Perrier anticipated
growing market for bottled drinking water as the
quality of water deteriorated in many places.
Anticipative marketing is more risky than responsive
marketing; companies may come into market too
early or too late, or may even be totally wrong about
thinking that such a market would develop.(eg. Dish
washers in India)
35. Need Shaped Marketing
The broadest level of marketing occurs
when a company introduces product
that nobody asked for and often could
not even conceive of.
(e.g. Sony Walkman, Sony Compact Disc )
Late Akio Morita, founder and chairman
of Sony, who introduced these and
many other new products, summarized
his marketing philosophy in these
words: “ I don’t serve markets. I
create them.”
36. WHAT IS MARKET ?
A market consists of all the potential
customers sharing a particular need or
want who might be willing and able to
engage in exchange to satisfy that need or
want.
37. WHAT IS MARKETING ?
Marketing is the management process
which identifies, anticipates, and supplies
customer requirements efficiently and
profitably.
In other words, it is the process of
understanding, creating, and delivering
profitable value to targeted customers
better than the competition.
38. WHAT IS MARKETING ?
Its aim is to establish, maintain, enhance
long term relationship with customers at
a profit so that the objectives of the
parties involved are met.
In short marketing consists of attracting,
developing, and retaining profitable
customers.
39. BUSINESS IS MARKETING
Marketing can not be considered as a
separate function , it is the whole
business, seen from the point of view of
its final results.................that is profit,
through customer satisfaction
PETER DRUCKER
40. A SIMPLE MARKETING SYSTEM
Communication
Goods & Services
Market
Industry
Money
Information/Feedback
41. 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
42. Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve
Demarketing is marketing to reduce
demand temporarily or permanently; the
aim is not to destroy demand but to
reduce or shift it
43. Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
Production
concept
Product
concept
Selling
concept
Marketing
concept
Societal
concept
44. (1) THE PRODUCTION CONCEPT
Company
Produce more & more
Consumers
Practically sells itself
Consumers will favor those products that
are widely available and low in cost.
Therefore increase production and cut
down costs.
And build profit through volume.
45. (2) THE PRODUCT CONCEPT
Practically sells itself, if
it gives most quality for
money
Consumers
Buyers admire well-made products and can appraise
product quality and performance.
Consumers will favor those products that offer the most
quality, performance, or innovative features.
Therefore, improve quality, performance and features.
This would lead to increased sales and profits.
46. (3) SELLING CONCEPT
Consumers have normal tendency to resist.
Aggressive selling &
promotion efforts
Consumers
Making sales becomes primary function
and consumer satisfaction secondary .
Consumers , if left alone , will not buy
enough of company’s products.
Therefore, promote sales aggressively.
Build profit through quick turnover.
47. (4) MARKETING CONCEPT
“ LOVE THE CUSTOMER , NOT THE PRODUCT ”
Learn what they
want(MR)
Consumers
Sell what they want(Satisfy
needs of customers)
The key to achieving organizational goals consist in
determining the needs and wants of target markets and
delivering the desired satisfactions more effectively and
efficiently than competitors.
And build profit through customer satisfaction and
loyalty.
48. (5) THE SOCIETAL MARKETING
CONCEPT
It is Marketing Concept (+) Society’s well
being.
Balancing of following three considerations while
setting marketing policies :
Customer’s want satisfaction
Society’s well being
Company’s profits
The societal marketing concept holds that the
organization’s task is to determine the needs, wants,
and interests of target markets and to deliver the
desired satisfactions more effectively and efficiently
than competitors in a way that preserves or enhances
the consumer’s and the society’s well being.
It addresses conflicts between consumer’s and firm’s
short run wants and long term welfare.
50. Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations
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
51. 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
company’s requirements,
consumers’ long-term
interests, and society’s longrun interests
56. 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.
58. Microenvironment
Customers : individuals & households -Business
Markets; Government Markets; -International
Markets;
Competitors
Intermediates: Resellers transportation,
warehousing, financing
Suppliers: supply problems that affect the
marketing can be supply shortage, or delays,
labor strikes , supply costs …etc
Public: comprises of consumers, labor unions,
press & media, Govt. officials etc.
59. Macro environment
Demographic Environment: age, gender, income, religion
Economic Factors: Changes in Income, Changing
customer spending patterns, Unemployment, Inflation
Political / Legal Factors: Governmental regulations &
rules, Tax regime, Trade policies, Special interests
Technological Factors: forces that create new
technologies, creating new products and opportunities,
Examples mobiles; laptops, robotic surgery ..etc
Natural Factors: involves the natural resources needed as
inputs by marketers and may affect marketing activities;
as : Shortage of raw materials, Increased pollution,
Energy Sources
61. The Marketing Mix
The tools available to a business to
gain the reaction it is seeking from
its target market in relation to its
marketing objectives
7Ps – Price, Product, Promotion,
Place, People, Process, Physical
Environment
Traditional 4Ps extended to cope
with today's changing environment
65. Product
Methods used to improve/differentiate
the product and increase sales or target sales more effectively
to gain
a competitive advantage e.g.
Extension strategies
Specialised versions
New editions
Improvements – real or otherwise!
Changed packaging
Technology, etc.
66. Augmented
Product
Product or service
Core Product
Actual Product
CAR
Transportation
A motor car
Hotel
Accommodation
Rooms
Airline
Transportation
An air plane
A Football Club
Entertainment
An Insurance Company
Safety
Insurance policy
Online availability
Air Condition
Cooling
AC
Warranty
Finance
Availability
Room service
In flight
Entertainment
T-shirts – photos
with players
68. Price
•List Price
•Discounts
•Allowances
•Payment period
•Credit Terms
• The price must be one that
the customer thinks is good
value for money.
• This is not the same as
Pricing Strategy being cheap!
- International • Prices have a great
psychological effect on
Comparative
customers.
Cost plus
69. Price
Maximize short term
profit
Maximize current
market share
Market skimming
Product quality
leadership
Survival
71. Place
The means by which products and
services get from producer
to consumer and where they can be
accessed by the consumer
The more places to buy the product and
the easier it is made to buy it, the better for
the business (and the consumer?)
73. People
People represent the business
The image they present can be important
First contact often human – what is the
lasting image they provide to the
customer?
Extent of training and knowledge
of the product/service concerned
Do staff represent the desired culture
of the business?
74. People
People represent the business
The image they present can be important
First contact often human – what is the
lasting image they provide to the
customer?
Extent of training and knowledge
of the product/service concerned
Mission statement – how relevant?
Do staff represent the desired culture
of the business?
76. Process
How do people consume services?
What processes do they have to go through
to acquire the services?
Where do they find the availability
of the service?
Contact
Reminders
Registration
Subscription
Form filling
Degree of technology
78. Physical Environment
The ambience, mood or physical presentation of the
environment
Packaging.
Internet/web pages.
Paperwork (such as invoices, tickets,…..).
Brochures.
Furnishings.
Uniforms.
Business cards.
The building itself (such as prestigious offices or scenic
headquarters).
Mailboxes and many others . . . . . .
81. Marketing communication MIX
1.Advertising
Popular means of reaching a target audience.
Cost effective way to build awareness.
To create a good ad, the marketer must create a
message that is distinct, meaningful and credible.
There are many advertising 'media' such as
newspapers, magazines and journals, television,
cinema, outdoor advertising (such as posters, bus
sides).
82. Marketing communication MIX
2. Sales Promotion
Short term incentive to encourage customers to make a
purchase.
There are many sales promotion types as :
a. Advertising Specialties: A product imprinted with a logo as
mugs, T shirts..etc
b. Cash Rebates: A partial refund to the buyer
c. Discounting : reducing the listed price for a limited period of
time
d. Coupons
e. Samples
N.B Advertising offers reasons to buy a product or service,
sales promotion offers reasons to buy now
83. Marketing communication MIX
3. Public Relations
Used to obtain favorable publicity, building good
corporate image and handling unfavorable rumors,
stories and events
Influence the public beliefs, feelings and opinions
about the company .
Mass promotion tool & cheap
There are several types of public relations :
a. Written material as brochures, magazines, articles..etc
b. Special Events as presentations, conferences
c. Public Service Activities as donating money, volunteers or
resources to activities designed to a social cause
d. Speeches as giving talks
84. Marketing communication MIX
4. Personal Selling
Personal presentation by the firm’s sales force for
the purpose of making sales & building customer
relations
The sales message can be customized to meet the
needs of the customer.
Involves 2 way personal communication as faceto-face, by telephone, through video or web
conference.
85. Marketing communication MIX
5. Direct Marketing
The Direct marketing is a type of advertising
campaign that seeks to elicit an action (such as an
order, a visit to a store or Web site, or a request for
further information) from a selected group of
consumers in response to a communication from
the marketer.
Types of direct marketing:
Direct Mail
Telemarketing
Email Marketing
Catalogs
Websites
88. SWOT analysis
It is a marketing analysis tool that involves monitoring the
external and internal marketing environment.
Internal environment
Strength is something a firm does well or a characteristic
that enhances its competitiveness.
Weakness is something a firm lacks, does poorly, or a
condition placing it at a disadvantage
External environment
opportunity is a factor that the company may be able to
exploit to its advantage.
Threat is current and emerging external factors that may
challenge the company’s performance.
89. SWOT
Build on your
Strengths
Evaluate your
Opportunities
Research your
Threats
Recognize your
Weakness
91. Segmenting Consumer Markets
Geographic Segmentation Calls for dividing the market into
geographical units such as nations, states, regions, countries,
cities or neighborhoods
Demographic Segmentation Divides a market into groups
based on variables as age, gender, family size, income,
education, occupation, generation and nationality.
Psychographic Segmentation Divides buyers into different
groups based on social class, lifestyle, or personality
characteristics.
Behavioral Segmentation Divides buyers into groups based
on their knowledge, attitudes, uses or responses to a
product.
92. Segmenting International Markets
Companies can segment international markets
using one or a combination of several variables,
ex. Geographic location, grouping countries by
region as Asia, Middle East or Western Europe.
•Geographic segmentation assumes that nations
close to one another have common traits and
behaviors, example: United States and Canada.
•World markets can be segmented on the basis of
economic factors . Ex. Countries might be grouped
by population income levels or overall level of
economic development
94. Market Targeting
Evaluating Market Segments
Segment Size and Growth:
Segment Structural Attractiveness:
Company Objectives and Resources
Selecting Target Market Segments
Target Market Definition: consists of a set of
buyers who share common needs or
characteristics that the company decides to
serve.
95. Differentiation and Positioning
Differentiation: to be branded, products must be
differentiated from competitors‟ ones. (size, shape
or physical structure Features Performance quality,
Durability, Reliability, Style
Dimensions of service differentiation: Ordering
ease, Delivery, Installation, Customer Training,
Maintenance and repair
Product Position : the place the product occupies
in consumer's minds relative to competing
products. A product must have a unique identity.
Toyota Yaris & Honda positioned as Economy
Mercedes and Cadillac positioned as Luxury
BMW & Porsche positioned as Performance
97. Importance of Marketing Plan
Forces the marketing personnel to look internally in order
to fully understand the results of past marketing decisions.
Forces the marketing personnel to look externally in order
to fully understand the market in which they operate.
Sets future goals and provides direction for future
marketing efforts that everyone within the organization
should understand and support.
Marketing plan is a key component in obtaining funding to
pursue new initiatives.
98. Purpose of the Marketing Plan
Offer brief explanation for why this plan was
produced
–e.g., introduce new product, enter new markets,
continue growth of existing product, yearly review
and planning document, etc.
Suggest what may be done with the information
contained in the plan
–e.g., set targets to be achieved in the next year,
represents a departmental report to be included in
larger business or strategic plan, etc.
101. What is Myopia
• Nearsightedness--not inherited. It can be
prevented.
• Short sighted and inward looking
approach to marketing that focuses on the
needs of the firm instead of defining the
firm and its products in terms of the
customers' needs and wants.
102. Marketing Myopia Today
Airline Industry
- IndiGo V/s Kingfisher
- Private carriers v/s National Carriers
103. Marketing Myopia Today
• Technology Industry
▫ More focused on the customer today than in
1960
▫ Apple
▫ E-commerce and E-Business ranked high in
customer satisfaction report
104. “There is no such thing as a
growth industry, what we
have is growth
opportunities.”
-Theodore Levitt
105. Guarantee a Self-Deceiving Cycle
• Believe growth is guaranteed by an
expanding population
• Believe there is no competitive
substitutes
• Have too much faith in mass
production
• Preoccupation with a product:
focus on product instead of
customer
106. Assured Growth by Expansion
• Belief that increases in population and
affluence ensure growth
• Lack of innovation – A common characteristic
▫ Companies focus on efficiency, not innovation
• Petroleum industry
▫ A prime example of this fallacy
▫ Reinforces Levitt’s caution of myopically
defining one’s industry
107. No Threat of Obsolescence
• The fallacy of believing competitive substitutes
don’t exist
• Petroleum industry
▫ A history of obsolete products due to
competitive substitutes
Kerosene Lamp
Kerosene Space Heater
108. Mass Production
• Lower product’s unit costs as output
increases
• Focus on production, neglect marketing
• Selling is not marketing
• Focus on company’s needs, not customer’s
needs
109. Henry Ford
Brilliant Marketer
Senseless Marketer
• Created a product customer’s
needed
• Refused to make cars in any
other color but black
• Created a product customer’s
could afford
• Created production system to
fit market needs
110. Preoccupation with Product
• Industry declines instead of growing
• Example – Oil Companies
• Survival entails change
111. Creative Destruction
• When something new eliminates something
old
• Must become innovative – reinvent business
• Must change business strategy to survive
113. Model of Consumer Decision
Making
Stages in the Consumer Decision-Making Process
Relevant Internal Psychological Processes
114. External Factors Influencing the
Consumer Buying Behavior
Culture
Social Class
Reference Group and Opinion
Leader
Family
115. Building Customer Relationships
Customer Relationship Management (CRM)
The overall process of
building and maintaining
profitable customer
relationships by
delivering superior
customer value and
satisfaction
116. Building Customer Relationships
Relationship Building Blocks: Customer Value and Satisfaction
Customer
perceived value
Customer
satisfaction
• The difference
between total
customer
value and total
customer cost
• The extent to
which a
product’s
perceived
performance
matches a
buyer’s
expectations
118. Building Customer Relationships
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
119. Building Customer Relationships
Partner relationship management
involves working closely with
partners in other company
departments and outside the
company to jointly bring greater
value to customers
120. Building Customer Relationships
Partner Relationship Management
Partners inside the company is every
function area interacting with customers
Electronically
Cross-functional teams
Partners outside the company is how
marketers connect with their suppliers,
channel partners, and competitors by
developing partnerships
121. Building Customer Relationships
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
122. 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
123. Capturing Value from Customers
Growing Share of Customer
Share of customer is the portion of the
customer’s purchasing that a company gets
in its product categories
124. Capturing Value from Customers
Customer equity is
the total combined
customer lifetime
values of all of the
company’s
customers
125. Capturing Value from Customers
Building Customer Equity
Building the 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
126. The New Marketing Landscape
Major Developments
Digital age
Rapid
globalization
Ethics and
social
responsibility
Not-for-profit
marketing
127. So, What Is Marketing?
Pulling It All Together
128. Customer Satisfaction and
Customer Retention
Customer satisfaction is the key to
customer retention
1 in 4 unhappy
Customers
switch
1 in 27 unhappy
customers
complain
5 times easier
and cheaper to
keep a
customer than
to have a new
one
Fully satisfies customers are more likely
to become loyal customers.
Customer satisfaction is a big challenge
for marketers.
“It is no longer enough to satisfy customers. You must delight them.”-Philip
Kotler
130. Summary of Modern Marketing
Modern marketing is consumer oriented.
It begins and ends with Consumers.
It precedes & succeeds production.
It is competition oriented.
Its strategy is target marketing
The distribution policy under modern
marketing is direct marketing and direct
selling.
131. Modern marketing relies on information.
It emphasizes mutuality of benefit.
Business networks.
Emphasis on retaining customers
Marketing on the net.
Shifting from international to borderless
world marketing.
Innovation.
Business Process Outsourcing.
Branding shifting values.
132. Conclusion
“Organizations must learn to think of
itself not as producing goods or
services but as buying customers, as
doing the things that will make people
want to do business with it.”
Theodore Levitt
