Principles of Marketing

Lecture 2
Shahzad Minhaj
 Need, Want & Demand
• 1. Stated needs (The customer wants an
inexpensive car.)
• 2. Real needs (The customer wants a car whose
operating cost, not initial price, is low.)
• 3. Unstated needs (The customer expects good
service from the dealer.)
• 4. Delight needs (The customer would like the
dealer to include an onboard GPS system.)
• 5. Secret needs (The customer wants friends to
see him or her as a savvy consumer.)
 Designing a Customer-Driven
Marketing Strategy
Selecting Customers to Serve

Market segmentation refers to dividing the

markets into segments of customers
Target marketing refers to which segments
to go after
 Designing a Customer-Driven
Marketing Strategy
Choosing a Value Proposition

The value proposition is the set of

benefits or values a company promises
to deliver to customers to satisfy their
needs
• Marketers
A person whose duties include the
identification of the goods and services desired
by a set of consumers, as well as the marketing
of those goods and services on behalf of a
company.
• Prospects
Potential customer or client qualified on the
basis or his or her buying authority, financial
capacity, and willingness to buy.
• Give example of best marketers
 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Production Product Selling Marketing Societal

concept concept concept concept concept
 Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations
Production concept is the idea that consumers
will favor products that are available or highly
affordable
• E.g.
 Designing a Customer-Driven Marketing
Strategy
Marketing Management Orientations
Product concept is the idea that consumers will
favor products that offer the most quality,
performance, and innovative features.
Organization should therefore devote its
energy to making continuous product
improvements.
• E.g.
 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Selling concept is the idea that consumers

will not buy enough of the firm’s products
unless it undertakes a large scale selling
and promotion effort.
• E.g.
 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Marketing concept is the idea that

achieving organizational goals
depends on knowing the needs and
wants of the target markets and
delivering the desired satisfactions
better than competitors do
 Starting Focu Mean End
s s s
Point

Selling Profits
Selling Existing
Factor and through
product
concepts y
s
promotin Sales
g volume

Profits
Customer Integrated
Marketing Marke through
Concepts t Customer
needs marketing
satisfaction
 Designing a Customer-Driven
Marketing Strategy
Marketing Management Orientations

Societal marketing concept is the idea that a

company should make good marketing
decisions by considering consumers’ wants,
the company’s requirements, consumers’
long-term interests, and society’s long-run
interests
 Society
(Human
welfare)

Societal
Marketing
concepts

Consumers Compan
(Want Satisfaction) y
(Profits)
 Preparing an Integrated Marketing
Plan and Program
The marketing mix is the set of tools (four Ps)
the firm uses to implement its marketing
strategy. It includes product, price,
promotion, and place.
Integrated marketing program is a
comprehensive plan that communicates and
delivers the intended value to chosen
customers.
 Demand States

1. Negative demand
2. No demand
3. Latent demand
4. Irregular demand
5. Full demand
6. Overfull demand
7. Decline Demand
8. Unwholesome demand
Chapter 2: Strategic planning and the marketing
forces
 Strategic Planning Business units, product
And market level
Defining the
Setting company Designing the Planning, marketing and
company
objectives and goals business other functional strategies
mission
portfolio

• Defining company’s mission

• Setting company objectives and goals
• Designing business portfolio
– Business portfolio
• Collection of businesses and products
– Portfolio analysis

– Strategic business unit (SBU)

• Unit of a company having separate mission
• Objectives are planned independently
 The Value chain

• Nine strategically relevant activities

– Primary activities
• Inbound Logistics
• Operations
• Outbound Logistics
• Marketing
• Services
– Support Activities
• Procurement
• Technology Development
• HRM
• Firm Infrastructure
 The BCG matrix approach to
corporate strategy formulation.
 Developing growth strategies
• Ansoff Opportunity Matrix
The Ansoff Opportunity Matrix was created by Igor Ansoff as a way to create
growth strategies for corporations based on markets and products.
According to Ansoff, there are four possible combinations:

Existing New
product product
s s

Market Product
Existin
g development
market penetration
s

New Market
market Diversification
s development
Ansoff Opportunity Matrix

• Marketing penetration – This growth strategy

uses current products and current markets with
the goal to increase market share.
• Market development – This growth strategy uses
existing products to capture new markets.
• Product development – This growth strategy uses
new products in the existing market.
• Diversification – This strategy creates completely
new opportunities for the company by creating
new products and new markets.
Understanding marketing and the
marketing process
Demographic Marketing Technological
Intermediarie natural
economic s environment
environment M
ar
ke

g
pl tin

tin
an g

ke
ni

is
ng
ar

l ys
Produc
M

a
An
t
Target
Public
Pric
Plac Consu s
e
Supplie e mer
r
g
Promotio t in atio
M ke nt
ar
ke
n ar me
tin M le n
co g p
nt
ro im
l
Political Social
legal cultural
Competito
environment environment
r
 4 Cs of the Marketing Mix
❑ Created in 1993 by Robert Lauterborn
❑ Model shifts the focus from the producer to the consumer

❑ Consumer/Customer Satisfaction replaces product

❑ Cost replaces price:

✓ Price is only one factor
✓ Cost reflects the cost of using the product

❑ Convenience replaces place

✓ Geographical/search engines

❑ Communication replaces promotion

✓ From 1 way to 2 way communication
 Marketing Environment
❑ Big, obedient audiences could be reached with big, efficient
media.

According to Brian Featherstonehaugh:

NOW
❑ The consumer has seized control
❑ Audiences have shattered into fragments and slices.
❑ The new ecosystem is millions and billions of unstructured one-to-
one and peer-to-peer conversations

In the digital age, marketing has taken a turn. Your audience can
no longer be primarily reached with a billboard or TV ad.
 4 Es are In
❑ Product to Experience:
✓ Discover the Customer Journey
✓ How customers shop
✓ Determine who influences their purchases
✓ What happens post-purchase
✓ Focus on creating a brand experience

❑ Place to Everyplace:

✓ Retail stores used to be the ‘place’

✓ Consumers create their own paths today
✓ Intercept rather than interrupt

You don't always need print and TV advertisements to reach your audience, Utilize the different outlets to target your audience. Not
everyone is going to spend every second of his or her day on one platform. It's important to know where your audience hangs out.
 Cont….
❑ From Price to Exchange:
✓ Focus was on the cost side of the equation
✓ Keeping costs down to keep prices competitive
✓ Now, marketers need to obtain customer’s attention and permission
through engagement
✓ It's about knowing the value of your visitors, leads, and customers.
✓ What is their engagement worth to your company? That is the
question you have to ask yourself.
✓ Calculate a customers’ worth over a lifetime

❑ Promotion to Evangelism
✓ A single-minded product benefit, creatively and persistently promoted,
was sufficient
✓ Create a brand mission and experience that inspires customers
✓ This E combines word-of-mouth with social networking
 Managing the marketing effort
Analysis

Planning Implementation Control

Develop strategic Carry out the Measure results
plans Plans

Evaluate results

Develop marketing Take corrective

plans actions
• Marketing Control
– Operating control
• Checking ongoing performance
• Evaluating annual plans against performance
• Corrective actions
– Strategic control
• Basic strategies matches with opportunities

– Marketing Audit
• Systematic independent and periodic examination of
– environment,
– objectives,
– strategies
– activities to determine problems and opportunities
• Recommendations to improve company’s performance

Measure Evaluate Take corrective

Set Performanc Performanc action
goals e e
What do we want What should we do
What is happening? Why is it happening?
to achieve about it?