MKT 901 Principles of Marketing

Session 02
Introduction to Marketing

Dr. LIU, Xiaoyan

Mar. 06, 2020

 2 What Is Marketing

 From consumer perspectives;

 And from company perspectives

 Implications of Marketing
 The Development of
Marketing Philosophies
4 Development of Marketing Philosophies

Production • In 1900s
concept • Supply creates demand

Product • In 1920s
concept • Quality improvement

Selling • In 1930s – 1940s

concept • Large scale selling and
promotion
5 Development of Marketing Philosophies

Marketing • In 1950s – 1970s

concept • Customer needs and wants

Societal
• Since1980s
marketing
• Long term social welfare
concept

• Since 2000s
Social media
• The wide usage of social
concept media
 6 Development of Marketing in China
 1949 – 1965: production concept
 Rationing system, demand is much greater than
supply;
 Limited marketing tools: radio and newspaper
 1979: the first year of modern advertisement
 1st TV commercial: Jan. 1979, Shanghai TV;
 1st newspaper ad: Feb. 1979, Wenhui Bao;
 1st radio ad: Mar. 1979, Shanghai People’s Radio
 Outdoor Ads: Dec. 1979, Beijing
 Ads for foreign brands: Rado Watch; Coco Cola
 7 Development of Marketing in China

 1980s – early 1990s: product/selling

concept
 After the reform and opening (1978), marketing
in China grew rapidly, partly due to the increased
companies and competition as well;
 Marketing was highly effective, e.g., Jianlibao, WA
HA HA
 Firms focus more on large scale selling and

promotion;
 Tools: TV, newspaper, outdoor, radio,
salesperson…
 8 Development of Marketing in China

 Mid 1990s – early 2000s: marketing

concept
 Marketing becomes more regularized in the
market, yet more competitive at the same time;
 Large local and international advertisement
companies provide more professional
marketing services, such as Meikao; Ogilvy
 Firms focus more on brand management, e.g.,
Haier, Lining, Lenovo…
 9 Development of Marketing in China

 1994 –2000s: Internet marketing

 Internet became public available since Apr. 1994
 The early stage of internet marketing in China since
1997, with the development of email, online ad,
search engine, and B2B, B2C, C2C websites…
 Sina (1998), Souhu (1998), Tencent (1998), Alibaba
(1998);
 Baidu (2000)
 Taobao (2003)
 Alipay (2004), Jingdong (JD, 2004)
 10 Development of Marketing in China

 Mid 2000s – 2010s: social media marketing

 Social media becomes important tool for brand
development and customer relationship
management;
 QQ Zone (2005); Sina Blog (2005); Renren (2006)
 Tudou (2005); Youku (2006)
 Weibo (2009); Wechat (2011)
 Tik Tok (2016)
 2010s – now: societal marketing
 Companies pay more attention to the social wellbeing
rather than simply promoting products;
11 Societal Marketing

 AMA (2013) recently redefined marketing as “the activity, set of

institutions, and processes for creating, communicating, delivering,
and exchanging offerings that have value for customers, clients,
partners, and society at large.”
12 Societal Marketing: Dove

 Since 2004, the beauty campaign successfully attracts lots of media coverage, and
conversation among consumers. While Dove does not release sales figures, executives at
Unilever suggest that the campaign has boosted sales.
 “We believe that conversation leads to brand love, and brand love leads to brand loyalty,”
Jennifer Bremner, brand director at Unilever, said “That’s obviously a positive for us not just in the
power of the brand, but also ultimately in sales.”
 13 Societal Marketing: Dove

 Societal marketing has been found as a good way

for a brand to build up an unique image and thus
differentiate itself from many other competitors,
especially when there are only a few of this kind of
marketing activities.
 However, societal marketing may backfire
sometimes.
 Higher standards
 More critical consumers
 Public attention/reactions
14 Social Marketing: SKII
15

Marketing Process
16 Simple Marketing System

Company
(Marketer)
Suppliers Marketing
Consumers
intermediaries
Competitors
 17 Marketing Process

Create value for customers and build Capture values from

relationship customers in return

Understand Build
Construct an
the Design a customer
integrated Capture value from
Marketplac customer- relationships
marketing customers to create
e and driven and create
program that profits and
customer marketing customer
delivers customer equity
needs strategy satisfaction/d
superior value
&wants elight
18

Understand
Customer Needs
and Wants
19 Needs, Wants and Demands

 Needs: state of deprivation: physical, social, personal

 Wants: needs that are shaped by culture and individual personality

 Demands: wants that be satisfied with buying power (willingness to pay)

20 Customer Needs

 Maslow’s five needs hierarchy

 Physiological: basic

 Safety: health security

 Social: love and belonging, support

 Esteem: respect

 Self actualization: fulfillment

21 Customer Needs
 Are you able to give examples of
 Products/services that can satisfy different needs of customers?
 22 Understand Customer Needs: TECNO
 The modern selfie trend was triggered by the front-facing camera in iPhone 4 in 2010,
and the popular mobile photo services (Instagram, Snapchat, Tumblr).

 Selfie has become a global phenomenon.

 On average, selfie accounts for more than 50% of the photos that people upload to
social medias.
 23 Understand Customer Needs: TECNO

 Selfie-focused smartphones, at the same time, become more and more

popular in many countries.
 24 Understand Customer Needs: TECNO
 Transsion Holdings, based in Shenzhen

 In 2007, entered the African markets with dual SIM cards technology.

 In 2012, introduced 3 sub-brands in Africa: TECNO, itel, Infinix

 In 2015, TECNO had the largest market share of 25.3% in Africa (Nokia No. 2)

 In 2016, TECNO introduced the Tecno Camon C9, a selfie phone for African
consumers, which became The new selfie king in Africa

quad-LED flash module

Night Shot Algorithm
25 TECNO
26 Understanding Customer Needs: TECNO

 1. Pricing strategy: low cost, around 100-200 USD

 2. Music phone: audio system with mega bass

 3. Product design: sweat proof

27 Understanding Customer Needs: TECNO

 4. Multiple SIM cards: dual SIM to four SIM

28 Understanding Customer Needs: TECNO

 5. Mass marketing with more offline stores and

after-sale services
29 TECNO Market Share in Africa
Design Customer
Driven Marketing
strategy
 31 Customer-driven Marketing Strategy

 Figure out what customers to serve: segmentation and targeting

 Divide market into smaller groups: demographics; geographic; psychographic, behavioral

 Assess each segment’s attractiveness: market size and growth; attractiveness; goals and
resources

 Figure out how to serve these customers: differentiation and positioning

 Differentiation: product, service, distribution, people

 Positioning: price vs. benefits (<, >, =)

32 Customer-driven Marketing Strategy

Decide what customers Decide how to serve the

to serve customers

Differentiation
Segmentation
Differentiate the market
Divide market into
offering to create superior
smaller groups Create value customer value
for targeted
customers
Targeting Positioning
Assess each segment’s Position the market offering
attractiveness and select in the minds of target
one to enter customers
33 Unique Value propositions (UVP)

Unique Value Proposition (UVP) Why should I buy

your products rather
 Also known as a unique selling than a competitors?
proposition (USP), is a clear statement
that describes the benefit of your offer,
how you solve your customer’s needs, and
what distinguishes you from the
competition.
Integrated
Marketing
Program
 Customer
Relationship
Management
36
Customer Relationship Management

 Customer relationship
management (CRM) is the
overall process of building
and maintaining profitable
customer relationships by
delivering superior
customer value and
satisfaction.
37 Build Customer Relationship

 The key to building lasting

customer relationships is to
Relationship Building Blocks
create superior customer
value and satisfaction. Customer
Customer value
satisfaction

• Value = benefits • The extent to which

received – [price + perceived
hassle (time and performance
efforts)] matches a buyer’s
expectations
38
Build Customer Relationship

 Customer satisfaction: product

performance => customer
expectations
 Satisfied customers: repurchase,
loyalty, positive WOM, constructive
feedbacks

 Dissatisfied customers: switch to

competitors, negative WOM,
boycott;
39
Build Customer Relationship

Customer loyalty program:

 Overall reward system:
 Credits;

 Frequency discount ;

 Membership benefits;

 Selective reward system:

 target fewer yet more profitable
customers
40
Build Customer Relationship

 Research report as well as

market performance have
consistently shown that
customer loyalty programs
benefits the company in
different ways.

 It costs twice more to attract

a new customer than
retaining an existing one.
41
Capturing Value from Customers

 Customer lifetime value is

the value of the entire
stream of purchases that
the customer would make
over a lifetime of
patronage.
42
Capture Customer Value

The value of a customer

varies along with the level
of activity with the brand as
well as the purchasing
power.
43 Summary and Homework
Key concepts Homework
 What is marketing  Find an advertisement, print or video, that you

 Five marketing philosophies think very interesting and creative.

 The Marketing process  Think about what is the unique selling point of

 Customer needs and wants the advertisement, and share it in the class next
week.
 Customer driven marketing
strategy

 Customer relationship
management