slim stage 1 - dme - study materials (chapter1)

Postgraduate Diploma in Marketing

Discovering Marketing Essentials (DME)

Mahesh WeeratungeCorporate Trainer and Practitioner

MBA (UK), CPM(APMF), MAPMF, PG. Dip(M) SL, Dip M(SL),

MSLIM

Snr. Lecturer, Examiner, Corporate Trainer and Practitioner

Mahesh Weeratunge 2

RECOMMENDED TEXT

Part – 1Defining Marketing and the Marketing Process

Chapter – IManaging Profitable

Customer Relationship

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Managing Profitable

Customer

Relationship

Marketing is…

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Definition of Marketing

We define marketing as a social and managerial

process by which individuals and groups obtain

what they need and want through creating and

exchanging value with others.

Building and managing profitable exchange

relationship with customers.

Managing Profitable Customer

Relationship

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Definition of Marketing

Managerial Process of identifying, anticipating

and satisfying customer needs at a profit in a

socially acceptable, ethical and eco friendly

manner…

Managing Profitable Customer

Relationship

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Identifying prospects

Anticipating prospects behavior

Satisfying using company product or services

Profits by exchanging values and building relationship

Socially responsible manner as accepted by the society

Ethical business practices

Eco-friendly operation to protect environment

Marketing Responsible for…

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Understanding the market place, customer needs and

wants

Designing a customer driven marketing strategy

Construct a marketing program that delivers superior value

Build profitable relationship and create customer delight

Capture value from customers to create profit and customer equity

The Marketing Process

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Needs

Current State

Desired State

NEED

• Needs are the human requirements

Physical Needs

Safety Needs

Social Needs

Esteem & Psychological Needs

Self Actualization Needs

Need: States of felt deprivation

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He needs to have a Hole on it!!!!!!


Person needs travel to a particular destination


Specific object that satisfy given need. The

form of human needs take as they are

shaped by culture and individual personality.

Eg: A person in USA needs foods and may want a

hamburger, French fries and soft drink, BUT a

person in Sri Lanka may wants rice with few

vegetable

Wants


Demands are wants for specific product

backed by an ability to pay.

Many people need BMW BUT can every one

afford???

Demands


Marketing people market many types of entities;

Goods – any tangible

Services – any intangible

Events – Olympic

Experiences – employment

Person – celebrity

Places – leisure world, Shanghai..

Properties – apartment

Organizations – Share market

Ideas – ad agencies, consultation

Information – research organizations

Money – Foreign Exchange

Marketing Offers


Overall process of building and

maintaining profitable customer

relationships by delivering superior

customer value and satisfaction.

Customer Relationship Management



ValueSatisfactio

n

Through the Exchange Process and the

Transaction


Act of obtaining desired object

from someone by offering

something in return.

Exchange


Trade of values between two

parties

Transaction

Exchange and Transactions are taking place in Market


Market is the set of actual and

the potential buyers of a

product.

Market

How do we select the buyer/customer to serve???


Marketing System

Supplier

Company

Competitor

Intermediary

Consumer


Market Segmentation

Target Marketing

Selecting Buyer / Customer / Consumer to Serve


Market Segmentation

Market Segmentat

ion


Market Targeting


Marketing Management

Demand Management

Customer Management

By deciding value proposition


Production Concept

Product Concept

Selling Concept

Marketing Concept

Societal Marketing Concept

Marketing Management Orientation


Assumption; Consumer favor

Products that are freely available

Products that are affordable

Concentration;

Improving Production Efficiency

Improving Distribution Efficiency

Economies of Scale; Try to achieve low unit cost

and also increase supply.

Production Concept


Production concepts prevailed from the time of

industrial revelation until the late 1920s.

At the time production concept worked fairly

well because the goods that were produced to

meet basic necessities and there were

relatively high level of unsatisfied basic needs.

Production Concept


Economics savings achieved by mass

production the cost advantages of a company

producing a product in larger quantities so

that each unit costs less to make.

Reduce average cost per unit by sharing

fixed cost among high volume

Economies of scale


Efficiency in production

Efficiency in distribution

How well company apply EOS

Production concepts looks for…


ASSUMTION: LOW PRICE

PRODUCT AND FREELY

AVAILABLE

ECONOMICS OF SCALE

PRODUCTION AND

DISTRIBUTION

Key in Production Concepts


Assumption; Consumer favors

Product with high quality, high performance

and innovative features.

Concentration;

Product improvement by features, quality

Product Concept


Management philosophy that a good

product creates its own market, and

does not require heavy marketing

expenditure.

Product Concept


CONTINUOUS

PRODUCT DEVELOP

MENT

RELATIVELY HIGH PRICE

HIGH QUALITY

& INNOVATI

VE PRODUCT

Key in Product Concept


Assumption;

Consumer will not buy unless it takes large

scale of selling and promotion effort.

Concentration;

Aggressive selling and promotional effort.

Selling Concept


HIGH EFFORT IN PROMOGTI

ON

INCREASE AVAILABILITY

HIGH EFFORT IN SELLING

KEY IN Selling Concept


Selling concepts is practicing most

aggressively with unsought goods, goods

that buyer normally do not think of buying,

such as insurance, encyclopedia etc…

Most companies are still practicing when

they have overcapacity.

Selling Concept in Practice…


Achieving organizational goals depends

on understanding of customer needs

and delivering desired satisfaction

better than competitor.

Concentration;

Customer Orientation, Integrated effort and

Goal achievement

Marketing Concept


Marketing Concept

CUSTOMERM

I

EA

R K

N

T

G

**

Producti

on

& QC

Sales

MKTG

HR & Administration

R&D

Finance

MIS

System

SCM


Build customer relationship. Getting a

new customer is 6times costly than

maintaining new customer.

Maximize profits

Keep customer always with the company

brands.

Why Marketing Concept???


Develop customer loyalty

Enhance image and reputation for both

product and entire organization

Recognition to organization members and

staff motivation

Less labor turnover

Increase revenue & profits

Effective utilization of resources

Benefits of Marketing Concept


Interdepartmental conflicts

Staff reluctant to change

Lack of committed leadership

Poor knowledge about the concept

Structural changes may occur conflict and

increase costs

Autocratic leadership – only one who wants to

make all the decisions.

Lack of infrastructure – technological needs

Difficulties in Developing Marketing Concept


Marketing through long term Social Wellbeing.

Organization obligation to maximize its positive

impact and minimize its negative impact to the

society

Bring Social and Ethical consideration to

marketing practice

Increase public interest

The Societal Marketing Concept


Society(Human Welfare)

Consumers

(Want Satisfacti

on)

Societal Marketin

g Concept

Company (Profit)

Key Ingredients in Societal Marketing


Key concentration

Ethical

Ecological

Economical

The Societal Marketing Concept


Defines Right OR Wrong behavior in

marketing practice

Basic ethics formalized through law to

make standards

What is Marketing Ethics?


Raising the level of socially

responsible marketing calls for

making a three-pronged attack

that relies on proper legal, ethical

and social responsibility behavior.

Corporate Social Responsibility (CSR)


Evolution Concept Focus Means Aims

Production Orientation

Assumed customer demand for product

availability & affordability

Improving production & Distribution

efficiency

Profitability through efficiency

Product Orientation

Assumed customer demand product

quality, performance & features

Continuous product

improvement

Profitability through product

quality

Selling Orientation

Existing products made by the firm;

creating sales transaction

Energetic selling & promotion

Profitability through sales

volume

Marketing Orientation

Customer needs & wants; long term

customer relationship

Integrated marketing activities

Profitability through customer

satisfaction


the overall process of building and

maintaining profitable customer

relationship by delivering superior

customer value and satisfaction.

acquiring customer, keeping customer

and growing customer


Management (CRM)


the difference between the total

customer value and the total customer

cost.

Customer Perceived Value


the extent to which the product’s

perceived performance matches the

buyers expectation.

Customer Satisfaction

HappyOr

Unhappy


Measuring Relationship Level


To build customer loyalty & retention

company should focus on building

customer lifetime value

Creating Customer Loyalty and Retention


The value of entire stream of purchases

that the customer would make over a

lifetime of patronage

Customer Lifetime Value when analyses

for all the company’s customer we can

see the company’s customer equity.

Customer Lifetime Value


Customer equity means total combined

customer lifetime value of all the

company’s customers

Customer Equity


Building the Right Relationship

ButterfliesGood fit between

company’s offerings and customers

needs; high profit potential

StrangersLittle fit between


needs; Lowest profit potential

BarnaclesLimited fit between company’s offerings

and customers needs; Low profit

potential

True FriendsGood fit between


needs; highest profit potential

Projected Loyalty

Short-term cus.. Long-term Cus..

Low Profitability

High Profitability

Pote

nti

al P

rofi

tab

ilit

y

slim stage 1 - dme - study materials (chapter1)

Documents

environment mahesh weeratunge

parties mahesh weeratunge

vegetable mahesh weeratunge

satisfying customer

marketing process

profitable relationship

superior customer value

marketing responsible