Principles of Marketing (Chapter 1).ppt

8/18/2019 Principles of Marketing (Chapter 1).ppt

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PRINCIPLES OF MARKETINGPRINCIPLES OF MARKETING

Marketing:

Creating and Capturing Customer

Value

11

Saihad Shahid Rahman, Spring 2014-2015 Saihad Shahid Rahman, Spring 2014-2015


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WHAT IS MARKETING?WHAT IS MARKETING?

Marketing Defined

Marketing is the process by which companies

create value for customers and build strongcustomer relationships in order to capture value from customers in return.

Marketing is a social and managerial process by which individuals and groups obtain what they need and want, through creating,offering and exchanging products (goods

and services) of value with others.


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The Marketing Process

1. Understand the marketplace and customer

needs and wants2. esign a customer!driven marketing strategy

". #onstruct an integrated marketing programthat delivers superior value

$. %uild profitable relationships and createcustomer delight (satisfaction)

&. #apture value from customers to create profitsand create customer e'uity


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Source: Adapted from Kotler et al. (2008:7)

A Simple Model of the Marketing Process


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Needs !ants "

#emands

Mar$etO%erings(Products

Ser!ices "#$periences)

Value "Satis&a'tion

Mar$ets

E(')angeTransa'tions "

Relations)ips

UNDERSTANDING THE MARKETPLACEUNDERSTANDING THE MARKETPLACE

AND CUSTOMER NEEDS…AND CUSTOMER NEEDS…

5 Core and Marketplace Concepts


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Customer Needs, Wants, and Demands

Needs are states of felt deprivation, he statesof mind (he basic human re'uirements)

* +hysical needfood, clothing, warmth, safety

* -ocial needbelonging and affection

* ndividual needknowledge and self!expression, recognition


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Wants are described in terms of ob/ectives that will satisfy needs. 0nd wants are form ofhuman needs shaped by ones society,culture individual personality.

Demands are human wants backed by buyingpower. o be demand the affordability of thecustomers and willingness to pay for anyproduct is important.




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Needs: Needs: need 3ood4 #loth.

Wants:Wants: 0s a %angladeshi want rice and fish as food, 5ungiand 3otua as cloth whereas an 0merican wants sandwich or burger as food and /eans, t!shirt as cloth.

Demands: Demands: 0s Mr. Haque is a business magnate, hisdemand is having rice and fish from 6adisson hotel and

clothes from a designer house. %ut since Mr. Khan is astudent his demand is having rice and fish from 0U%canteen or -tar 7ebab and clothes from 8ew market.

If Mr. Khan demand Food from Radisson and Clothesfrom designer house that will be considered as his

want as he does not have the ability of buying it.




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Market OfferingsProducts, Ser!ices, and "#periences

Market offerings are some combination of physical goods and service oriented benefits offered to a market to satisfy aneed or want of the customer.

! -o the 'uestion is, what are the different9fferings (+hysical goods, -ervices and:xperiences etc.) that can be marketed as+roduct;




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WHAT CAN BE MARKETED?WHAT CAN BE MARKETED?

E(perien'esE(perien'es PersonsPersons Pla'esPla'es

Organi*ationsOrgani*ations IdeasIdeasIn&ormationIn&ormation

Physical GoodsPhysical Goods Ser+i'esSer+i'es E+entsE+ents

PropertiesProperties


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GoodsGoodsServicesServices

EventsEvents

ExperiencesExperiences

PersonsPersons

,illGates

Mar$-u'$er.erg



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PlacesPlaces OrganizationsOrganizations

InformationInformation

IdeasIdeas

PropertiesProperties



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$alue and Satisfaction

Value is the inner strength or capability of aproduct that can solve the problem of a

consumer.

Customer perceived value is the customersevaluation of the difference between totalcustomer benefits and total customer costs of

a market offering relative to those ofcompeting offers.

Satisfaction is the position of consumers mindresulted from their expectation and the actual

performance of the product.




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"#changes, Transaction and %elationships

Exchange is the act of obtaining a desiredob/ect from someone byoffering something in return.

Transaction is a trade of values between twoor more parties. his is actuallyexchange of something in between two or more parties by setting themonetary value of their ob/ect.




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"#changes, Transactions and %elationships

elationships elationships consist of actions to buildand maintain desirable relationships bydelivering superior value to the customers.

%&




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Markets

Markets are the set of actual and potential

buyers of a product or service.

! hese buyers share a

particular need or want that can besatisfied throughexchange relationships.




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Marketing S&stem

Marketing S!stem consists of all of the actors

(suppliers, company, competitors, intermediaries,and end users) in the system who are affected bythe following ma/or environmental forces<

* emographic

* :conomic* +hysical4=eographical* echnological* +olitical>legal* -ocio!cultural

%7




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Source: Adapted from Kotler et al. (2008:%')

"lements of A Modern Marketing S&stem




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DESIGNING A CUSTOMER-DRIVENDESIGNING A CUSTOMER-DRIVEN

MARKETING STRATEGY…MARKETING STRATEGY…

Marketing Management

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

! 3or managing customers properly we needthink about<

* ?hat customers will we serve;* @ow can we best serve these customers;* @ow can we increase our profitability

through satisfying our target customers;


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Selecting Customers to Ser!e

De"marketing refers to the set of activities toreduce demand temporarily or permanentlyfrom one place or specific time to anotherAthe aim is not to destroy demand but toreduce or shift it.

! t reduces the extra load from the regular business operations and make a balance between peak off!peak demand situations.




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Marketing Management Orientations'Concepts of Marketing(


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Production Concept

#roduction concept is the idea thatconsumers will favor products that are widely available or highly affordable.

! 5arge production and effective distribution

#hannel is important.

! +rice of the products remains relatively lowand they are available almost everywhere.




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Production Concept)




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Product Concept

#roduct concept is the idea that consumers willfavor products that offer the most 'uality,performance, and features for which theorganiBation should therefore dedicate itsenergy for making continuous improvements.

! 6esearch evelopment activities for newinnovations and putting emphasis on customerpreference is essential.




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Product Concept)




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Selling Concept

Selling concept is the idea that consumers will not buy enough of the firms products

unless it undertakes attractiveadvertisements and large scale of selling andpromotion effort.

! #ommunicating with the customers properlyand creating strong appeal about theproducts or services among them.




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Selling Concept)




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Marketing Concept

Marketing concept is the idea that achieving

organiBational goals depends on knowingthe needs and wants of the target marketsand delivering the desired satisfactions better than competitors do.

! #ustomer is the king, -o meeting the changingdemand of customer is most importantpoint for marketers to emphasis.




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Marketing Concept)




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Societal Marketing Concept

Societal marketing concept is the idea that

a company should make good marketingdecisions by considering consumers wants,the companys re'uirements, consumerslong!term interests, and societys long!runinterests.

! hinking and acting as a member or part ofthe society and participating in different #orporate -ocial 6esponsibilities C#-6Dactivities.


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Societal Marketing Concept)

Societal Marketing

Concept

To Company

(Profits)

To Consumers

(Want & Satisfaction)

To Society

(Human & Environmental Welfare)




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Societal Marketing

Concept …




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*ntegrated Marketing Program

$ntegrated marketing program is acomprehensive marketing plan to create,communicate and deliver the proposed valueto the chosen customers.

! %y #ombining the tools of marketing mix($ +s< +roduct, +rice, +lace, +romotion), we can formulate a proper integratedmarketing programs for the customers.

PREPARING AN INTEGRATEDPREPARING AN INTEGRATED

MARKETING PLAN AND PROGRAMMARKETING PLAN AND PROGRAM


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BUILDING CUSTOMER RELATIONSHIPSBUILDING CUSTOMER RELATIONSHIPS

Customer %elationship Management 'C%M(

Customer elationship Management isthe overall process of building andmaintaining profitable customer

relationships by delivering superior customer value and satisfaction.

- t deals with ac'uiring, keeping and growing customers.


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BUILDING CUSTOMER RELATIONSHIPSBUILDING CUSTOMER RELATIONSHIPS

Partner %elationship Management

Suppl! Chain is a channel that stretches

from raw materials to components to finalproducts to final buyers.


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CAPTURING VALUE FROM CUSTOMERSCAPTURING VALUE FROM CUSTOMERS

Creating Customer +o&alt& and %etention

Customer %ifetime Value is the value of theentire stream of purchases that the customer

would make over his or her lifetime.

- stimating Customer !ife "ime #alue$

0nnual customer spending to a company< aka 1&EE 0verage number of loyalty of that customers < 2E Fears #ompany regular profit margin< 1&G #ustomer lifetime value (revenue)< aka ; #ustomer lifetime value (+rofit)< aka ;


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Creating Customer +o&alt& and %etention

Suppose Ms. Zamila visits KFC thrice a week and

consume 1 pkt. of combo 1 every time, and she is

oin to consume it for the ne!t" last 1# years at the

same rate, if other thins remain constant, and price

of one pkt. of Combo 1 is $%& tk, Ms. Zamila's life

time value will be

'7

/00122t$



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uilding Customer "-uit&

Customer quity is the total combined

customer lifetime values of all of thecompanys customers.

! his is companys cumulative sales values for allkinds of product or services for the time being.

! -o, #6H takes a long!term view not only tocreate profitable customers but to IownJ(making loyal) them for life and capturetheir life time value.



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THE NEW MARKETING LANDSCAPETHE NEW MARKETING LANDSCAPE

Ma.or De!elopments 'Changes in Marketing(

igital age *lo+ali,ation

#t-ics and social responsi+ilit

/-e grot- of 1otforpro3t marketing 4-anging orld econom


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Emerging

Challenges

Emerging

Challenges

Non-profitMarketing

NewDigital Age

EthicalConcerns

RapidGlobalisation

ChangingWorld Economy

THE NEW MARKETING LANDSCAPETHE NEW MARKETING LANDSCAPE


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END of CHAPTER - 1

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