CHAPTER:1

MARKETING MANAGEMEN

T

Definition of Marketing

Marketing deals with identifying and meeting human and social needs.

Marketing is “meeting needs profitably.” Marketing: Managing Profitable Customer

Relationships. Many people think of marketing only as selling and

advertising. It is only the tip of the marketing iceberg.

Kotler’s social definition : Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

2

Marketing people are involved in marketing 10 types of entities:

Goods Services Experiences Events Persons

Places Properties Organizations Information Ideas

Scope of Marketing

ROKIBUL ISLAM, Executive MBA, EWU, BD.

3

Core Marketing Concepts:

Needs: Needs describe basic human requirements. Needs may be physical, social, and individuals. Such as food, air, water, clothing, and shelter, recreation, education, and entertainment etc. Wants: are the form human needs take as they are shaped

by culture and individual personality. Demands: Human wants that are backed by buying power.

Wants become buying power.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

4

Core Concepts of Marketing

Marketing Offers: Some combination of products, services, information or experiences offered to a market to satisfy a need or want. A product is any offering that can satisfy a need or want. A brand is an offering from a known source. A brand name

such as McDonald’s.Marketing offers also include other entities, such

as persons, places, organizations, information and ideas.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

5

Core Concepts of Marketing

Customer Value and Satisfaction: are key building blocks for developing and managing customer relationship.

Satisfied customers buy again and tell others about their good experiences.

Dissatisfied customers often switch to competitors and disparage/criticize the product to others.

Value is the ratio between what the customer gets and what he gives.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

6

Core Concepts of Marketing

Exchanges and Relationships: Exchange is a value-creating process because it

normally leaves both parties better off. Relationships: Marketers want to built strong

relationships by consistently delivering superior customer value.

Relationship marketing aims to build long-term mutually satisfying relations with key parties—customers, suppliers, distributors—in order to earn and retain their long-term preference and business.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

7

Core Concepts of Marketing

Markets: A market is a set of actual and potential buyers of a product or services.

Today we can distinguish between a marketplace and a market space.

The marketplace is physical, as when one goes shopping in a store; Marketspace is digital, as when one goes shopping on the Internet.

A marketer is someone who is seeking a response (attention, a purchase, a vote, a donation) from another party, called the prospect.

If two parties are seeking to sell something to each other, both are marketers.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

8

MARKETING MANAGEMENT

Marketing Management is the art and science of choosing target markets and building profitable relationships with them.

Creating, delivering and communicating superior customer value is key.

Marketing (management) is the process of analyzing, planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

9

MARKETING MANAGEMENT

1.Customer Management:• Marketers select customers that can be served well

and profitably.2.Demand Management:• Marketers must deal with different demand states

ranging from no demand to too much demand.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

10

Eight different states of demand

Negative demand (avoidance of a product), No demand (lack of awareness or interest in a product),Latent demand (a strong need that cannot be satisfied

by existing products), Declining demand (lower demand), Irregular demand (demand varying by season, day, or

hour), Full demand (a satisfying level of demand), Overfull demand (more demand than can be handled),Unwholesome demand (demand for unhealthy or

dangerous products).

ROKIBUL ISLAM, Executive MBA, EWU, BD.

11

Marketing Management Orientation

What philosophy should guide marketing strategies?What weight should be given to the interests of

customers, the organization and society?There are six alternative concepts under which

organizations design and carry out their marketing strategies:

1. Production concept, 2. Product concept, 3. Selling concept, 4. Marketing concept5. Societal marketing concept, and6. Holistic marketing concepts.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

12

Management Orientation

1. The Production Concept: The production concept, one of the oldest in business,

holds that consumers prefer products that are widely available and inexpensive.

This concept is still a useful philosophy in two types of situations:

(i) When the demand for a product exceeds the supply and (ii) When the product cost is too high and improved productivity is

needed to bring it down.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

13

Management Orientation

2. The Product Concept: holds that consumers will favor products that

offer the most in quality, performance, and innovative features, and that the organization should devote its energy to making continuous product improvement by designs, packages, prices and better product.

For example- users wanted train rather than transportation.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

14

Management Orientation

3. The Selling concept: holds that consumers will not buy enough of

the firm’s products unless it undertakes a large-scale selling and promotion effort.

The concept is typically practiced with unsought goods or unwanted goods those that buyers do not normally think of buying. Example-insurance and blood donations.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

15

Management Orientation

4. The Marketing Concept: holds that organizational goals depends on

knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.

Under the concept, customer focus and value are the paths to sales and profits.

It views marketing not as “hunting” but as “ gardening” The marketing concept rests on four pillars: target

market, customer needs, integrated marketing, and profitability.

Customer Needs: (1) stated needs, (2) real needs, (3) unstated needs, (4) delight needs, and (5) secret needs.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

16

Selling Concept & Marketing Concept

Starting point Focus Means EndsThe Selling Concept

Factory Existing Products

Selling and Promotion

Profit through sales volume

The Marketing ConceptMarkets Customer

NeedsIntegrated Marketing

Profit through customer

satisfaction

ROKIBUL ISLAM, Executive MBA, EWU, BD.

17

Management Orientation

5. The Societal Marketing Concept: holds that marketing strategy should deliver

value to customers in a way that maintains or improves both the consumer’s and society’s well-being.

Companies should balance three considerations in setting their marketing strategies: company profits, customer wants/satisfaction, and society’s interests (Human welfare).

ROKIBUL ISLAM, Executive MBA, EWU, BD.

18

Management Orientation

6. The Holistic Marketing concept: Four broad components charactering

holistic marketing:a. Relationship marketingb. Integrated marketingc. Internal marketing andd. Performance marketing

ROKIBUL ISLAM, Executive MBA, EWU, BD.

19

The Holistic Marketing Concept

a) Relationship Marketing: a) is the aim to build mutually satisfying long-term

relationships with key constituents in order to earn and retain their business.

b) Four key constituents marketing are customers, employees, marketing partners (channels, suppliers, distributors, dealers, agencies)

ROKIBUL ISLAM, Executive MBA, EWU, BD.

20

The Holistic Marketing Concept

b) Integrated Marketing: When all of the company’s departments work together to

serve the customers’ interests , the result is integrated marketing.

Integrated marketing takes place on two levels. First, the various marketing functions—sales force, advertising,

customer service, product management, marketing research—must work together. All of these functions must be coordinated from the customer’s point of view.

Second, marketing must be embraced by the other departments. External marketing is marketing directed at people outside

the company. Internal marketing is the task of hiring, training, and

motivating able employees who want to serve customers well. Internal marketing must precede external marketing.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

21

Holistic Marketing Concept

c) Internal Marketing: is the task of hiring, training and motivating

able employees who want to serve customers well.

Internal marketing must take place on two levels: first level- the various marketing functions-

sales forces, advertising, customer service, product management, marketing research must work together.

At the second level, other departments must embrace marketing; they must also “think customer”.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

22

Holistic Marketing Concept

d) Performance Marketing: Holistic marketing incorporates performance

marketing and understanding the returns to the business from marketing activities and programs, as well as addressing broader concerns and their legal, ethical, social and environmental effects.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

23

Marketing Mix

Marketing mix is the set of marketing tools.McCarthy classified these tools into four broad

groups that he called the 4Ps of marketing:1. Product: Product variety, quality, design, features,

brand name, packaging, sizes, service, warranties and returns.

2. Price: list price, discounts, allowances, payment period and credit terms.

3. Place: Channels, coverage, assortments, locations inventory and transportation.

4. Promotion: Sales promotion, Advertising, Public relations and Direct marketing

ROKIBUL ISLAM, Executive MBA, EWU, BD.

24

Marketing Mix

The 4Ps represent the seller’s view of the marketing tools available for influencing buyers.

Its four dimensions (SIVA) and the corresponding customer questions these are designed to answer are:

I. Solution: How can I solve my problem?II. Information: Where can I learn more about it?III. Value: What is my total sacrifice to get their

solution?IV. Access: Where can I find it?

ROKIBUL ISLAM, Executive MBA, EWU, BD.

25

CRM

CRM-Customer Relationships Marketing“is the overall process of building and

maintaining profitable customer relationships by delivering superior customer value and satisfaction”.

It costs 5 to 10 items MORE to attract a new customer than it does to keep a current customer satisfied.

Marketers must be concerned with the lifetime value of the customer.

ROKIBUL ISLAM, Executive MBA, EWU, BD.

26

KEY Concepts of CRM

1. Attracting, retaining and growing customersa) Customer value/satisfaction: Customer satisfaction depends

on the product’s perceived performance relative to a buyer’s expectations.

b) Loyalty and retention: Good CRM creates customer delight. In turn, delighted customers remain loyal and talk favorably to others about the company and its products.

c) Growing share of customer: Car companies want to increase “share of garage” and air lines want greater “ share of travel”.

2. Building customer relationships and customer equitya) Customer equity: The more loyal the firm’s profitable

customers, the higher the firm’s customer equity.b) Customer relationship levels and tools: Target

market :Basic relationships, Full relationships.c) Customer loyalty and retention programs : Adding

financial benefits, Adding social benefits, Adding structural ties

ROKIBUL ISLAM, Executive MBA, EWU, BD.

27