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Marketing Basics
What is Marketing???
Think about organizations/companies (Google, Trader Joes, The San Jose Chamber of Commerce, World Wildlife Fund, ) as well as individuals (politicians, professional athletes, )
Marketing Basics
Marketing consists of activities designed to generate and facilitate exchanges intended to satisfy human or organizational needs or wants.
1. Demand exceeds available supply. 2. All that is made can be sold. 3. Focus is on engineering and generating output, not the customer. 4. Epitomized between late 1800s and early 1930s.
The American public can have any color car it wants so long as its black. Henry Ford, referring to the Model T.
Sales-orientation Stage
1. Supply frequently exceeds demand. 2. Focus is on promotion and pricing; objective is to sell all the inventory. 3. Hard-sell techniques create stereotype of pushy, annoying salesperson. 4. Epitomized between early 1930s and 1950s.
1. Variety in markets, variety in products. 2. Employs full marketing mix. 3. Focus is on customer needs and satisfaction; profitability over volume. 4. Most typical current orientation.
Marketing Goals There are three main objectives that are followed by the marketing discipline:
Marketing Goals 1. Customer satisfaction and (service) quality delivered (perceived) service/product expected service/product*
customer satisfaction
<
expected service/product*
customer dissatisfaction
* requires a positive expectation
- Customer satisfaction is a main determinant for stable and voluntary buying relationships
- Compliance management plays an important role in retaining customers
- Stimulation of market exchanges and customer retention is supported by a strong service/product/company brand
Service Quality
G2
Design
Customers Assessment
- Price
- Promotion (also communication) - Place (also distribution) - Due to the specialties of services (intangibility, inseparability, heterogeneity, perishability) some speak of the 5P-approach by adding a 5th instrument: People
Co-Creation
- One of the (if not THE) essential advantage(s) of service management and service marketing is that service development in most of the cases requires the participation of both the supplying company and the customer - Thus, services are co-created - Impact on the marketing goals: - Easier to anticipate and to react to customer expectations stimulation of market exchanges and customer retention - Direct contact with employees of the service provider impacts the customers brand building process - However, co-creation depends on the abilities of the customer and the provider to express, anticipate, and react to the needs of the counterpart!
Idea generation
Service expectations
Buying decision Integration into the service production process quality perception/ (dis-) satisfaction
The Integrated Service Marketing Model Initial Market Research - Capturing market trends, market sizes, market potentials - What do customers expect? - Market research can be performed in a formal way (e.g. standardized questionnaires, telephone interviews, ) or informally (checking competitors websites, ask experts, visit trade shows, ) - Design of marketing instruments relies on adequate market and customer information
Idea generation
Service expectations
Buying decision Integration into the service production process quality perception/ (dis-) satisfaction
Idea generation
Service expectations
Buying decision Integration into the service production process quality perception/ (dis-) satisfaction
Idea generation
Service expectations
Buying decision Integration into the service production process quality perception/ (dis-) satisfaction
Service production
Idea generation
Service expectations
Buying decision Integration into the service production process quality perception/ (dis-) satisfaction
Service production
- Communicative instruments to ensure customer satisfaction and to stimulate customer retention - Ensure that customer perceptions have at least met their expectations - Otherwise: compliance management
Marketing Implementation
Market information
Idea generation
Buying decision Integration into the service production process quality perception/ (dis-) satisfaction
Service production
- Information management plays a crucial role in service marketing - Information is not only gathered during initial market research but also during the whole service (marketing) process - Also, information can be spread not only during the initial communication phase but also (and especially) during the service production process - Important to ensure an effective information flow within the company
Information gathering
Market information
Idea generation
Service expectations
Buying decision Integration into the service production process quality perception/ (dis-) satisfaction
Service production
Information transfer
Market information
Idea generation
Service expectations
Buying decision Integration into the service production process quality perception/ (dis-) satisfaction
Service production
Idea generation
Service expectations
Buying decision Integration into the service production process quality perception/ (dis-) satisfaction
Service production
Conclusion
- Coordination of all marketing instruments - Achievement of marketing goals: - Service marketing offers several opportunities to balance customer expectations with customer perceptions - Customer satisfaction (service quality) is a main factor that impacts customer retention - Continuous and constant service quality accompanied by continuous, constant, and balanced communication efforts lead to the development of a strong brand image - Growing impact of service marketing on the whole marketing field