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TRANSCRIPT
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LECTURE 1
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About the Course
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Course Objectives
Introduce YOU to the concept of Marketing
Role of Marketing in the organization and Society
Understand its objective in the overall management
process
Topics include market segmentation, product development, promotion,
distribution, and pricing.
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Assessment
MID-TERM 1 15 %
MID-TERM 2 15 %
FINAL 25 %
CLASS TUTORIALS / DISCUSSIONS 15 %ASSIGNMENTS / QUIZES 10 %
FINAL REPORT 20 %
TOTAL 100 %
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What Feedback Will You Receive?
Feedback in class on presentations
Responses to questions raised in and after lectures
Responses on email to questions raised there or throughother channels: usually answers will be shared with the whole
class
Informal feedback on class work and presentations will be
given throughout the course
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Giving Me Feedback
Informally in class
End of course questionnaires
Via e-mail
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Method of Communication
General queries (I may reproduce your questions
through other channels here and answer them here).
Lecture, seminar & assessment material
Web links
Do notuse non-university e-mails to e-mail me- I
may not reply.
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Communication Details
fb.com/groups/IOBMPOM14
Principles of Marketing - Shaheer Mehkari
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Important Notice
Be punctual
Turn your phone to silent!
Prepare material beforehand
Join in class discussions Listenwhen somebody else is
speaking
Ask questions
Work hard Support each other
READ THE BOOK
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What is Marketing?
The Process by which companies create value for customersand build strong customer relationships in order to capturevalue from customers in return
- Kotler & Armstrong
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Marketing is
managing profitablecustomer
relationships.
What is Marketing?
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2-fold objectives Attract new customers by providing superior value
Retain current customers by delivering satisfaction
What is Marketing?
Attract new
CustomersRetain Current
Customers
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What is Marketing
Marketing is the activity, set of institutions, and processes
for creating, communicating, delivering, and exchanging
offerings that have value for customers, clients, partners,and society at large.
AMA New Definition of Marketing, 2007
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What is Marketing
Marketingconsists of individual and organizational activities
that facilitate and expedite satisfying exchange relationships
in a dynamic environment through the creation, distribution,
promotion and pricing of goods, services and ideas.
Chartered Institute of Marketing
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What Marketing is not
A sophisticated form of selling done by graduates
Advertising, sales promotion, selling, PR, direct mail,
market research
What the marketing department does
A process which increases costs
An irrelevance to what I do
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M RKETING
PROCESS
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The Marketing Process
THIS PROCESS SHOWS MARKETING IN A NUTSHELL
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UNDERSTAND THE
MARKET PLACE AND
CUSTOMER NEEDS
AND WANTS
The Marketing ProcessStep 1
NEEDS, WANTS AND DEMANDS
Need: State of felt deprivation, part of humannature
I am hungry
Wants: The form human needs take asshaped by culture and individual personality
I want burger
Demands:Human wants that are backed by
culture and individual personality
KFC Zinger Burger or McDonalds McChicken
Important Terms: Need, Wants, Demand
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UNDERSTAND THE
MARKET PLACE AND
CUSTOMER NEEDS
AND WANTS
The Marketing ProcessStep 1
MARKET OFFERING
Some combination of products, services,
information, or experiences offered to amarket to satisfy a need or want
Important Terms: Marketing Myopia
Products Services Experiences
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CUSTOMERS BUY
EXPERIENCESAND BENEFITS..
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UNDERSTAND THE
MARKET PLACE AND
CUSTOMER NEEDS
AND WANTS
The Marketing ProcessStep 1
MARKETPLACE / MARKET
The set of actual and potential buyers of aproduct or service
A market is an aggregate of people who, asindividuals and/or organizations, have theneed, ability, willingness, and authority topurchase products. (Dibb, Simkin, Pride andFerrell, 1997)
The buyers share a need or want that can be satisfiedthrough exchange relationships.
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CONSUMER RESEARCH
PRODUCT DEVELOPMENTCOMMUNICATION
DISTRIBUTIONPRICING
SERVICE
CORE MARKETING ACTIVITIES
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UNDERSTAND THE
MARKET PLACE AND
CUSTOMER NEEDS
AND WANTS
The Marketing ProcessStep 1
MARKETPLACE / MARKET
The set of actual and potential buyers of aproduct or service
A market is an aggregate of people who, asindividuals and/or organizations, have theneed, ability, willingness, and authority topurchase products. (Dibb, Simkin, Pride andFerrell, 1997)
The buyers share a need or want that can be satisfiedthrough exchange relationships.
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DESIGN A CUSTOMER-DRIVEN MARKETING
STRATEGY
The Marketing ProcessStep 2
MARKETING MANAGEMENT
Marketing ManagementThe art and science of choosing target markets
and building profitable relationships with themBasically application of principles of marketing
A good marketing strategy should seek to answerWhat customer will we serve? (Target market)
How to serve them? (Value proposition)
Important Terms: Marketing Management
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DESIGN A CUSTOMER-DRIVEN MARKETING
STRATEGY
The Marketing ProcessStep 2
WHAT CUSTOMERS TO SERVE?
HOW CAN WE SERVE THEM BEST?
Important Terms: Target Market, Value Proposition, Market Segmentation,Target Marketing, Customer Management, Demand Management
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SELECTING CUSTOMERS TO SERVE
SEGMENTATION
Example: SUV, SEDAN, HATCHBACK, COUPE etc.
TARGET
Example: Selecting Sedan Category
Positioning Example: BMW 7 Series (Luxury Sedan)
Value Proposition
Example: BMW (The Ultimate Driving Machine)
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DESIGN A CUSTOMER-DRIVEN MARKETING
STRATEGY
The Marketing ProcessStep 2
MARKETING MANAGEMENT ORIENTATIONS
.
Marketing Production Product
SellingSocietal
Marketing
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The Marketing ProcessStep 2
PRODUCTION - ORIENTED FIRM
.
ProductionCapabilities
ManufactureProducts
Customer
Consumers buy products that are inexpensive and widely available
Focus is on improving production and distribution
Used when: Demand>Supply or Production cost too high or no competitionFord T-bird You can have any color as long as its black
Examples: Utilities, Food basics
Disadv: Marketing Myopia
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The Marketing ProcessStep 2
SELLING - ORIENTED FIRM
.
ProductionCapabilities
ManufactureProducts
AggressiveSales Effort
Aim atMultiple
Customers
Consumers will not buy enough unless the organization undertakes an
aggressive selling and promotion strategy
Sell what they make rather than make what market wantsUseful for unique products or where customer awareness is low
Example: Insurance
Disadv:short term customer relationship
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The Marketing ProcessStep 2
MARKETING- ORIENTED FIRM
.
Actual &potential
customer wantsand needs
Potentialmarket
opportunity
Productioncapabilities /
MarketingProgram
Marketproducts &
servicesCustomers
Achieving organizational goals depends on knowing the needs and wants
of target markets and delivering the desired satisfaction better than
competitors do
From make and sell to sense and respond. Finding right customers for the product toRight product for your customers
Customer-driven approach, begins with customers not product or factory
Example: Unilever Research
Strive to understand not only existing but latent needs (IPAD, IPOD)
Feedback
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The Marketing ProcessStep 2
SOCIALLY - ORIENTED FIRM
.
Addresses the conflict between consumers short term wants and long-runwelfare
Example: Unilever, Johnson & Johnson and all major companies incorporate
Corporate social responsibility in their mission statements now.
Enlightened marketing that holds
that a company should make
good marketing decisions by
considering, consumers wants,the companys requirements,
consumers long-run interests,
and societyslong-run interests
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CONSTRUCT A
MARKETING PROGRAM
THAT DELIVERS
SUPERIOR VALUE
The Marketing ProcessStep 3
PUTTING STRATEGY INTO ACTION
The tools that are used to put this strategy into
action is called the Marketing Mix.
Important Terms: Marketing Mix, Product, Price, Place, Promotion
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BUILD PROFITABLE
RELATIONSHIPS AND
CREATE CUSTOMER
DELIGHT
The Marketing ProcessStep 4
BUILDING CUSTOMER RELATIONSHIPS
Customers form expectations about the valueand satisfaction that the market offering willdeliver.
Customer Relationship Management (CRM)
Overall process of building and maintainingprofitable customer relationship by delivering
superior customer value and satisfaction
FOCUS ON ACQUIRING, KEEPING AND GROWING CUSTOMERS
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BUILD PROFITABLE
RELATIONSHIPS AND
CREATE CUSTOMER
DELIGHT
The Marketing ProcessStep 4
Customer Value /Customer Perceived value
Difference between all the benefits and all the costsof a marketing offer relative to those of acompeting offer.
Why should a customer buy IPhone and not Sony?
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VALUE
Its unwise to pay too much, but its unwise to pay toolittle. When you pay too much you lose a little money,that is all. When you pay too little you sometimes loseeverything, because the thing you bought was incapableof doing the thing you bought it to do. The common lawof business balance prohibits paying a little and getting alot. It cant be done. If you deal with the lowest bidder,its well to add something for the risk you run. And if youdo that you will have enough to pay for something
better.John Ruskin (1819-1900)
(Advertisement, Waterways World, August 2002)
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BUILD PROFITABLE
RELATIONSHIPS AND
CREATE CUSTOMER
DELIGHT
The Marketing ProcessStep 4
Customer Value/Customer Perceived value
Difference between all the benefits and all the costs
of a marketing offer relative to those of acompeting offer
Why should a customer buy IPhone and not Sony?
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BUILD PROFITABLE
RELATIONSHIPS AND
CREATE CUSTOMER
DELIGHT
The Marketing ProcessStep 4
Customer satisfaction
The extent to which a products perceivedperformance matches a buyers expectations
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PERCEIVED PERFORMANCE < BUYER EXPECTATION = DISSATISFACTION
PERCEIVED PERFORMANCE = BUYER EXPECTATION = SATISFACTION
PERCEIVED PERFORMANCE > BUYER EXPECTATION = DELIGHT
REMEMBER: NOTHING AT THE COST OF PROFITS!
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BUILD PROFITABLE
RELATIONSHIPS AND
CREATE CUSTOMER
DELIGHT
The Marketing ProcessStep 4
CUSTOMER RELATIONSHIP TOOLS
How to establish loyalty and lasting relationship?
Loyalty programs (Supermarkets)Frequent Flyer programs (Airlines)Membership programs (Clothingmanufacturers etc)Reward programs (Hotels, Banks)
OUT OF SIGHT - OUT OF MIND!
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BUILD PROFITABLE
RELATIONSHIPS AND
CREATE CUSTOMER
DELIGHT
The Marketing ProcessStep 4
PARTNER RELATIONSHIP MANAGEMENT
Work Closely with Partners
Internal PartnersOutside the companyChannel Marketing(distributors, suppliers, retailers etc)
EVERYONE SHOULD BE A PART-TIME MARKETER
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CAPTURE VALUE FROM
CUSTOMERS TO CREATEPROFITS AND CUSTOMER
QUALITY
The Marketing ProcessStep 5
CAPTURING VALUE FROM CUSTOMERS
The outcome of creating customer value:
Customer Loyalty and RetentionShare of market/share of customerCustomer Equity
.
Good CRM Delight LoyaltyGood Wordof Mouth
MoreCustomers
More Profit
Customer Loyalty and Retention
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The value of the entire stream of
purchases that the customerwould make over a lifetime ofpatronage.
CUSTOMER LIFE TIME VALUE
Losing A Customer
Quantifiable Loss Of More ThanA Single Sale
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CAPTURE VALUE FROM
CUSTOMERS TO CREATEPROFITS AND CUSTOMER
QUALITY
The Marketing ProcessStep 5
CAPTURING VALUE FROM CUSTOMERS
Growing share of Customer:
The portion of customers purchasing that a
company gets in its product categories.
Banksshare of wallet
Airlinesshare of travel
.
Add varietyCrosssell and Upsell
Example: Amazon.com, Virgin Group, Insurance companies
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The Marketing ProcessStep 5BUILDING RIGHT RELATIONSHIP WITH RIGHT CUSTOMERS
.
Butterflies
Good fit between
companys offering and
customers needs; high
profit potential
True Friends
Good fit between companys
offerings and customers
needs and customer needs;
highest profit potential
Strangers
Little fit between
companys offering and
customers needs;
lowest profit potential
Barnacles
Limited fit between
companys offering and
customers needs; low
profit potential
High profitability
Low profitability
Short term
customers
Long term
customers
Potential
Profitability
Projected Loyalty
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New Marketing Landscape
Changing business environmentnew challenges formarketing.
Major trends
New Digital Age More connected and informed customers, suppliers,
distributors.
New ways of managing customers
Interneta turnaround Online focus groups, social networking websites (Orkut,
Facebook), Blogs, online shops, Teleconferencing etc.
.
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New Marketing Landscape
Rapid Globalization Global customers
Global competitors
International partners/supply chain
Made in China
Ethics and Social Responsibility Corporate Social Responsibility
Automobile companies, Oil companies, Unilever, Mobilink Foundation
Not-for-Profit Marketing Population control advertising (Greenstar), etc.
.
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Join Group
Read Course Outline
Read Assigned Case Study
Check your name for
groups
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