Introduction to Marketing

Chapter 1

Marketing: Managing Profitable Customer Relationships

Course Goals• To outline the marketing function and its role

within a corporation’s business strategies, also hopefully generating a passion for the Marketing discipline and empowering you to evaluate Marketing as a possible career choice

• To introduce you to marketing strategy and to the elements of marketing analysis: customer analysis, company analysis, and competitor analysis

Chapter 1 Introduction to Marketing

company analysis, and competitor analysis

• To familiarize you with the elements of the marketing mix (product, pricing, promotion, and distribution strategies) and enhance your problem solving and decision making abilities in these operational areas of marketing tactics

HAVE LOTS OF FUN!HAVE LOTS OF FUN!

TEXT BOOK

Principles of Marketing

Chapter 1 Introduction to Marketing

Philip Kotler,

Gary Armstrong, (12e)

…and how do I score some really serious

grades?• There’s no rocket science to getting good

grades

• The secret: Work Hard!

A grade will be composed of:

Quizzes 5%

Chapter 1 Introduction to Marketing

Quizzes 5%

Assignments 10%

Project/ Presentation 10%

Midterm exam 25%

Final exam 50%TOTAL 100%

The allocation of the percentage is subject to change.

Concepts

1. What Is Marketing?2. Understanding the Marketplace and Customer

Needs3. Designing a Customer-Driven Marketing Strategy4. Preparing an Integrated Marketing Plan and

Chapter 1 Introduction to Marketing

4. Preparing an Integrated Marketing Plan and Program

5. Building Customer Relationships6. Capturing Value from Customers7. The New Marketing Landscape8. So, What Is Marketing? Pulling It All Together

What Is Marketing?

Marketing Defined

Marketing is the process by which

Chapter 1 Introduction to Marketing

Marketing is the process by which companies create value for customers and build strong customer relationships to capture value from customers in return

What Is Marketing?

The Marketing Process

1. Understand the marketplace and customer wants and needs

Chapter 1 Introduction to Marketing

wants and needs2. Design a customer-driven marketing

strategy3. Construct a marketing plan that delivers

superior value4. Build profitable relationships and create

customer satisfaction5. Capture value from customers to create

profit and customer equity

What Can Be Marketed?

• Goods

• Services

• Places

• Ideas

• Events

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• Events

• Persons

• Properties

• Organizations

• Information

• Experiences

What is being marketed in this ad?

Understanding the Marketplaceand Customer Needs

Maslow’s Pyramid of Needs

Chapter 1 Introduction to Marketing

Understanding the Marketplaceand Customer Needs

Customer Needs, Wants, and Demands

• Needs are states of deprivation

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• Needs are states of deprivation

• Physical—food, clothing, warmth, safety

• Social—belonging and affection

• Individual—knowledge and self-expression

Understanding the Marketplaceand Customer Needs

Customer Needs, Wants, and Demands

Wants are the form that needs take as

Chapter 1 Introduction to Marketing

Wants are the form that needs take as they are shaped by culture and individual personality

Demands are wants backed by buying power

Understanding the Marketplaceand Customer Needs

Market Offerings—Products, Services, and Experiences

Marketing myopia is focusing only

Chapter 1 Introduction to Marketing

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

Understanding the Marketplaceand Customer Needs

Markets are the set of actual and potential buyers of a product

Marketing system consists of all of the actors (suppliers, company, competitors, intermediaries, and end users) in the system

Chapter 1 Introduction to Marketing

intermediaries, and end users) in the system who are affected by major environmental forces

• Demographic• Economic• Physical• Technological• Political–legal• Socio-cultural

Understanding the Marketplaceand Customer Needs

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

Chapter 1 Introduction to Marketing

Designing a Customer-Driven Marketing Strategy

Marketing Management

Marketing management is the art and science of choosing target markets

Chapter 1 Introduction to Marketing

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: Dividing

Chapter 1 Introduction to Marketing

Market segmentation: Dividing the markets into segments of customers

Target marketing: Which segments to go after

Designing a Customer-Driven Marketing Strategy

Selecting Customers to Serve

De-marketing: Marketing to reduce

Chapter 1 Introduction to Marketing

De-marketing: Marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but to reduce or shift it.

Designing a Customer-Driven Marketing Strategy

Selecting Customers to Serve

Marketing management is:

Chapter 1 Introduction to Marketing

Marketing management is:

• Customer management

• Demand management

Designing a Customer-Driven Marketing Strategy

Choosing a Value Proposition

The value proposition is the set of

Chapter 1 Introduction to Marketing

The value proposition is the set of benefits or values a company promises to deliver to customers to satisfy their needs

Designing a Customer-Driven Marketing Strategy

Marketing Management Orientations

• Production concept

Chapter 1 Introduction to Marketing

• Production concept

• Product concept

• Selling concept

• Marketing concept

• Societal concept

Designing a Customer-Driven Marketing Strategy

Marketing Management Orientations

Chapter 1 Introduction to Marketing

Production concept is the idea that consumers will favor products that are available or highly affordable

Designing a Customer-Driven Marketing Strategy

Marketing Management Orientations

Product concept is the idea that consumers will favor products that

Chapter 1 Introduction to Marketing

consumers will favor products that offer the most quality, performance, and features for which the organization should therefore devote its energy to making continuous improvements

Designing a Customer-Driven Marketing Strategy

Marketing Management Orientations

Selling concept is the idea that

Chapter 1 Introduction to Marketing

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

Designing a Customer-Driven Marketing Strategy

Marketing Management Orientations

Marketing concept is the idea that achieving organizational goals depends

Chapter 1 Introduction to Marketing

achieving organizational goals depends on knowing the needs and wants of the target markets and delivering the desired satisfactions better than competitors do

Chapter 1 Introduction to Marketing

Designing a Customer-Driven Marketing Strategy

Marketing Management Orientations

Societal marketing concept is the idea that a company should make good

Chapter 1 Introduction to Marketing

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

Preparing an Integrated Marketing Plan and Program

Marketing Mix

The marketing mix is the set of tools (four Ps) the firm uses to

Chapter 1 Introduction to Marketing

tools (four Ps) the firm uses to implement its marketing strategy

• Product• Price• Promotion• Place

Preparing an Integrated Marketing Plan and Program

Integrated Marketing Program

Integrated marketing program is

Chapter 1 Introduction to Marketing

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

Building Customer Relationships

Customer Relationship Management

(CRM)

Customer relationship management is

Chapter 1 Introduction to Marketing

Customer relationship management is the overall process of building and maintaining profitable customer relationships by delivering superior value and satisfaction

Building Customer Relationships

Customer Relationship Management

(CRM)

Customer perceived value is the difference

Chapter 1 Introduction to Marketing

Customer perceived value is the difference between total customer value and total customer cost

Customer satisfaction is the extent to which a product’s perceived performance matches a buyer’s expectations

Building Customer Relationships

Partner Relationship Management

Supply chain is a channel that stretches from raw materials to components to

Chapter 1 Introduction to Marketing

from raw materials to components to final products to final buyers

• Supply management

• Strategic partners

• Strategic alliances

Capturing Value from Customers

Creating Customer Loyalty and Retention

Chapter 1 Introduction to Marketing

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

Capturing Value from Customers

Growing Share of Customer

Share of customer is the portion of

Chapter 1 Introduction to Marketing

Share of customer is the portion of the customer’s purchasing that a company gets in its product categories

Capturing Value from Customers

Building Customer Equity

Customer equity is the total combined customer lifetime

Chapter 1 Introduction to Marketing

combined customer lifetime values of all of the company’s customers

The New Marketing Landscape

Major Developments

• Digital age

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• Globalization

• Ethics and social responsibility

• Not-for-profit marketing

The New Marketing Landscape

The New Digital Age• Recent technology has had a major impact

on the ways marketers connect with and bring value to their customers

• Market research • Learning about and tracking customers

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• Learning about and tracking customers

• Create new customized products• Distribution• Communication

• Video conferencing• Online data services

The New Marketing Landscape

Rapid Globalization

• The world is smaller

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• The world is smaller

• Think globally, act locally

The New Marketing Landscape

The Call for More Ethics and Social Responsibility

Social marketing campaigns

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Social marketing campaignsencourage energy conservation and concern for the environment or discourage smoking, excessive drinking, and drug use

The New Marketing Landscape

The Growth for Not-for-Profit Marketing

• Colleges

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• Colleges• Hospitals• Museums• Zoos• Religious groups

Summary

1. What Is Marketing?2. Understanding the Marketplace and Customer

Needs3. Designing a Customer-Driven Marketing Strategy4. Preparing an Integrated Marketing Plan and

Chapter 1 Introduction to Marketing

4. Preparing an Integrated Marketing Plan and Program

5. Building Customer Relationships6. Capturing Value from Customers7. The New Marketing Landscape8. So, What Is Marketing? Pulling It All Together