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Marketing: Managing Profitable

Customer Relationships

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Topic & Structure of the lesson

What is Marketing?

Core Marketing Concepts

Marketing management philosophies/ concepts

The selling and marketing conceptscontrasted

Marketing challenges of the newcentury

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Learning Outcomes

At the end of the lesson, you shouldbe able to:

Identify and explain the core concepts inmarketing

Identify and explain the marketingmanagement philosophies

Explain the challenges faced bymarketers in the new century

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Main Teaching Points

Marketing Concepts

Marketing Management Philosophies

Marketing Challenges

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What is Marketing?

Definition:

A social and managerial process by

which individuals and groups obtainwhat they need and want throughcreating and exchanging products andvalue with others.

Not telling and selling but satisfyingcustomer needs

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The Marketing Process

Five-step model of the marketing process

1. Understand the marketplace and customerneeds and wants

2. Design a customer-driven marketing strategy3. Construct a marketing program that delivers

superior value

4. Build profitable relationships and createcustomer delight

5. Capture value from customers to create profitsand customer quality

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Core Marketing Concepts

Needs, wants& demand

Marketing offers

(products and services)

Value and satisfactionExchange, transaction &

relationships

Markets Core MarketingConcepts

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Core Marketing Concepts

1. Needs states of felt deprivation

2. Wants the form taken by human

needs as they are shaped by cultureand individual personality

3. Demands human wants that arebacked by buying power

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Core Marketing Concepts (cont.)

4. Product anything that can be offered toa market for attention, acquisition, use, orconsumption that might satisfy a want or

need-Products not limited to physical products

-Also includes services, activities, benefits-intangibles that do not result in ownershipof anything

-Many marketers suffer from marketingmyopia

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Core Marketing Concepts (cont.)

5. Value the difference between thevalues the customer gains fromowning and using a product and the

costs of obtaining the product 6. Satisfaction the extent to which a

products perceived performancematches a buyers expectations.

-Marketers must be careful to set upthe right level of expectations

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Core Marketing Concepts (cont.)

7. Quality / Total Quality Management programmes designed to constantlyimprove the quality of products, services,and marketing processes

8. Exchange the act of obtaining adesired object from someone by offeringsomething in return

-Idea is to build and maintain desirableexchange relationships

-Retain customers through superiorcustomer value

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Core Marketing Concepts (cont.)

9. Transaction a trade between two

parties that involves at least twothings of value, agreed uponconditions, a time of agreement and aplace of agreement

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Core Marketing Concepts(cont.)

10. Relationship marketing the process ofcreating, maintaining and enhancingstrong, value laden relationships with

customers and other stakeholders 11. Market the set of all actual and

potential buyers of a product or service

-These buyers share a particular need or

want that can be satisfied throughexchange relationships

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Designing a Customer-DrivenMarketing Strategy

Marketing Management is the art andscience of choosing target marketsand building profitable relationshipswith them

Two important questions

1. What customers will we serve (whats

our target market?)2. How can we serve these customers best

(whats our value proposition?)

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Selecting Customers to Serve

Dividing the market into segments ofcustomers (market segmentation)

Selecting which segment to serve(target marketing)

Marketing mangers must understandthat it is not possible to serve all

customers

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Choosing a Value Proposition

A companys value proposition is the setof benefits or values it promises todeliver to customers to satisfy their

needs

They answer the customers question:

Why should I buy your brand ratherthan a competitors?

It answers the question:

How the company will differentiate and

position itself in the marketplace

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Marketing Management Orientations

1. The production concept holds thatconsumers will favour products that areavailable and highly affordable

Therefore management should focus onimproving production and distributionefficiency

Useful in two types of situations1. Demand for the product exceeds the supply

2. Products cost is too high and improvedproductivity is required to bring it down

Risk of Marketing Myopia

M k ti M t

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Marketing ManagementOrientations

2. Product concept holds thatconsumers will favour products thatoffer the most quality, performanceand innovative features

Therefore management should devoteenergy to making continuous product

improvements Risk of Marketing Myopia

M k ti M t

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Marketing ManagementOrientations

3. The selling concept holds thatconsumers will not buy enough of theorganisations products unless it undertakes

a large scale selling and promotion offer. 4. The marketing concept holds that

achieving organisational goals depends ondetermining the needs and wants of target

markets and delivering the desiredsatisfactions more effectively and efficientlythan competitors do.

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The selling and marketing conceptscontrasted

Selling concept Marketingconcept

Starting

point

Factory Market

Focus Existingproducts

Customer needs

Means Selling andpromoting

Integratedmarketing

Ends Profits throughsales volume

Profits throughcust.

satisfaction

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Marketing ManagementOrientations

5. The societal marketing concept holds that the organisation shoulddetermine the needs, wants andinterests of target markets.

It should then deliver superior valueto customers in a way that maintains

or improves the customers and thesocietys well being.

Marketing challenges of the new

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Marketing challenges of the newcentury

1. Growth of non-profit marketing

2. Rapid globalisation

3. The changing world economy 4. The call for more ethics and social

responsibility

5. The new marketing landscape