Marketing G

Raechel Johns
 Raechel Johns
• Raechel.Johns@canberra.edu.au
• 6201 2726
• 6D28
• Consultation hours Mondays 3.30 – 5.30pm
• About me…
 Chapter Objectives (1)
1. Define marketing, employing such key elements as
value, customer relationships, needs, wants and
demands.
2. Discuss marketing management and elaborate on the
basic ideas of demand management and building
profitable customer relationships.
3. List the marketing management philosophies and be
able to distinguish between them.
4. Analyse the key marketing challenges of this century
and reflect on the ways these might be overcome.
 What Is Marketing?

• An activity, set of institutions and

processes for creating,
communicating, delivering and
exchanging offerings that have value
for customers, clients, partners and
society at large.
The Marketing Process
 Understanding the Marketplace and
Customer Needs
• Marketers need to understand customer
needs, wants and demands and the
marketplace within which they operate.
 FIGURE 1.1

Pride /
Farrell

Components
of Strategic
Marketing
[Fig 1.1
here]
 Needs, Wants and Demands (1)

• Human needs are the most basic concept

underlying marketing.
– Humans have many complex needs including physical, social and
individual needs.
– Marketers stimulate rather than create these needs, they are part of
human make up.
– When a need is not satisfied, a person will either try to reduce the
need or look for an object that will satisfy it.
– People in less economically developed societies might try to
reduce their desires and satisfy them with what is available.
– People in industrial societies might try to develop objects that will
satisfy their needs.
 Needs, Wants and Demands (2)

• Wants are the form taken by human needs and are

shaped by culture and individual personality.
– For example, a hungry person in Australia, Singapore
or Hong Kong might want something different for
lunch from a hungry person in the South Pacific.
– As a society evolves, the wants of its members expand.
– Marketers try to provide more want-satisfying goods
and services.
 Needs, Wants and Demands (3)
• Demands are the human wants that are backed up by
buying power.
– Customers view products as bundles of benefits and choose
the products that give them the best bundle for their money.
– Outstanding companies go to great lengths to learn about
and understand their customers’ needs, wants and demands.
– They conduct customer research, analyse and monitor
customer behaviour, complaints, inquiry, warranty and
service performance data.
– Understanding customer needs, wants, and demands in detail
provides important input for designing marketing strategies.
 Market Offerings: Goods, Services and
Experiences
• A market offering is a product that is some
combination of goods, services and experiences that
can be offered to a market to satisfy a need or want.
• A product includes physical objects, services, persons,
places, ideas and organisations. Anything that satisfies
a need can be called a product.
• Marketers often use the expression goods and services
to distinguish between tangible and intangible ones.
However these should be viewed as continuum and
not as a basic dichotomy.
 Customer Perceived Value and
Satisfaction
• Customer perceived value is the difference
between the values the customer gains in
owning and using a product and the costs of
obtaining the product.
• Customer Satisfaction is the extent to which a
product’s perceived performance matches a
buyer’s expectations.
 Exchange, Transactions and
Relationships (1)
• Exchange is the act of obtaining a desired object from someone
by offering something in return.
• Exchange means that people do not need to prey on others,
depend on donations or possess the skills to produce every
necessity for themselves.
• Exchange is the core concept of marketing. For an exchange to
take place, several conditions must be satisfied:
• At least two parties must participate and each must have
something of value to the other.
• Each party must want to deal with the other and be free to
accept or reject an offer.
• Each party must be able to communicate and deliver.
 Exchange, Transactions and
Relationships (2)
• A transaction is marketing’s unit of measurement.
• A transaction consists of a trade of value between two
parties.
• In transactions it must be possible to state that what
each party is giving and gaining.
• Relationship marketing is the process of creating,
maintaining and enhancing strong, value-laden
relationships with customers and other stakeholders.
 Markets

• Market - A set of all actual and

potential buyers of a product
A Simple Marketing System
 Marketing

• Marketing means managing markets to

bring about exchanges for the purpose of
satisfying human needs and wants.
• Marketing is carried out by both sellers and
buyers, and company purchasing agents.
Elements of a Modern Marketing System
 Designing a Customer-Driven Marketing
Strategy
• Marketing management is:
– The analysis, planning, implementation and control of
programs designed to create, communicate and deliver value
to customers and facilitate managing customer relationships
in ways that enable the organisation to meet its objectives
and those of its stakeholders.
• A winning marketing strategy asks ‘what customers
will we serve?’ and ‘Who is our target market?’
 Selecting Customers to Serve

• Marketers cannot serve all customers in

every way with a single market offering.
• It is necessary to select customers that can
be served well and profitably.
• Demarketing is marketing in which the task
is to temporarily or permanently reduce
demand
 Selecting Customers to Serve
• Managing demand means managing customers who come from two
groups: new and repeat customers.
• Keeping existing customers is important as the cost to attract new
customers is five times as much.
• Marketers retain customers by ensuring that branded goods, services and
experiences offer intrinsic value and that there is a sense of excitement or
enjoyment associated with the marketing offering and communication
used.
• Context is important - excitement is not always appropriate.
• The key to offering excitement is involvement and interactivity.
Emotional Engagement
 Choosing a Value Proposition

• The organisation must decide how it will

serve targeted customers - how it will
differentiate and position itself in the
marketplace.
• A value proposition is the set of benefits or
values it promises to deliver to consumers
to satisfy their needs.
 Marketing Management Orientations

• The Production Concept

– Consumers favour products that are available and highly affordable.
• The Product Concept
– Consumers favour products that offer the most quality, performance and
innovative features.
• The Selling Concept
– Consumers won’t buy enough of the organisation’s products unless the
organisations undertakes a large-scale selling and promotion effort.
• The Marketing Concept
– Achieving organisational goals depends on determining the needs and
wants of target markets and delivering the desired satisfaction more
effectively and efficiently than competitors.
Selling and Marketing Concepts
 Societal Marketing

• Organisations should determine the needs,

wants and interests of target markets and
deliver the desired satisfaction more
effectively and efficiently than competitors
in a way that maintains or improves the
customer’s and society’s well-being.
Considerations Underlying the Societal
Marketing Concept
 Preparing an Integrated Marketing
Program
• The company’s marketing strategy outlines which
customers the company will serve and how it will
create value.
• The integrated marketing program is developed to
actually deliver the value to target customers.
• The program builds relationships by transforming
the strategy into action, it consists of the
marketing mix.
The Extended Marketing Mix
 Building Customer Relationships

• The first three steps in the marketing

process:
– Understanding the marketplace and customer
needs
– Designing a customer-driven strategy
– Marketing programs lead to the most important
step: building profitable customer relationships.
 Customer Relationship Management
(CRM)
• CRM is the overall process of building and
maintaining profitable customer relationships
by delivering superior customer value and
satisfaction.
• CRM deals with all aspects of acquiring,
keeping and growing customers.
 Relationship Building Blocks:
Customer Value and Satisfaction
• The key to building long lasting relations is to create superior
customer value and satisfaction.
– Customer Perceived Value is the evaluation of the difference
between the benefits and all the costs of a market offering
relative to those of competing offers.
– Customer Satisfaction depends on the product’s perceived
performance matches a buyer’s expectations. If the product’s
performance falls short of expectations, the buyer is
dissatisfied. If the performance matches or exceeds
expectations, the buyer is satisfied or delighted.
 The Changing Nature of Customer
Relationships
• Companies are building more direct and lasting
relationships with more carefully selected customers.
– Companies now use customer profitability analysis to
identify losing customers and relate to winning customers
(selective relationship management).
– CRM is used to retain current customers and build long term
relationships with them.
– Companies aim to connect more deeply with customers and
more directly. Direct marketing is booming.
 Capturing Value from Customers

• Creating Customer Loyalty and Retention

– Good CRM creates customer delight. Delighted customers
remain loyal and talk favourably about the company.
• Growing Share of Customer
– Good CRM can help marketers to increase their share of
customer.
• Building Customer Equity
– This is the combined discounted customer lifetime values of
all the company’s current and potential customers.
 The New Marketing Landscape

• Marketing operates within a dynamic global

environment. Rapid changes can quickly make a
winning strategy out of date.
• Today’s companies deal with changing customer
values and orientations, market maturity in many
industries, movement of manufacturing to least cost
countries, environmental degradation, increased
global competition, and many other economic,
political and social problems.
 The New Marketing Landscape

• The growth of not-for-profit marketing:

– Including philanthropic organisations, universities, hospitals,
museums, symphony orchestras and even churches.
• Rapid Globalisation:
– Most marketing organisations are touched by global
competition.
• Customer Information and Digital Marketing:
– The IT explosion is accelerating the rate if change and
emergence of global competitors.
 The New Marketing Landscape

• The changing world economy:

– Many countries have grown poorer; around the
world people’s needs are greater but many lack the
means to pay for necessary goods.
• The call for more ethical behaviour and social
responsibility:
– There is an increased call for companies to take
responsibility for the social and environmental
impact of their actions.