Marketing Management

What is Marketing?

Creating & Capturing Customer

Value

What is Marketing? * Marketing is building profitable customer relationships * To create value for customers and to capture value Companies know if they take care of their customers (delivering on their promises). market share and profits will follow .

Definitions of Marketing „Marketing is the management process that identifies. anticipates and satisfies customer requirements profitably‟ The Chartered Institute of Marketing .

at the right time.„The right product. in the right place. and at the right price‟ Adcock .

„Marketing is the human activity directed at satisfying human needs and wants through an exchange process‟ Kotler 1980 .

offering and exchanging products of value with others‟ Kotler 1991 .„Marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating.

Implications of Marketing * Who are our existing / potential customers * What are their current / future needs? * How can we satisfy these needs? * Can we offer a product/ service that the customer would value? * Can we communicate with our customers? Can we deliver a competitive product ? * Why should customers buy from us? .

The Marketing concepts Choosing and targeting appropriate customers Positioning your offering Interacting with those customers Controlling the marketing effort Continuity of performance .

Successful marketing requires: Profitable Offensive (rather than defensive) Integrated Strategic (is future orientated) Effective (gets results) Hugh Davidson 1972 .

Why is marketing planning necessary? Systematic futuristic thinking by management Better co-ordination of a company‟s efforts Development of performance standards for control Sharpening of objectives and policies Better prepare for sudden developments .

Ensuring arrival .which way is best? Tactics .where are we now? Objectives .Getting there!) Control .Marketing Management Process Analysis/Audit .where do we want to be? Strategies .how do we get there? (Implementation .

• Construct a marketing program that delivers superior value. • Design a customer-driven marketing strategy. • Capture value from customers to create profits and customer equity. .The Marketing Process • Understand the marketplace and customer needs and wants. • Build profitable relationships and create customer delight.

Marketing process Capture value from Customers to Create profits and Customer quality Build profitable Relationships and Create customer delight Construct a Marketing program That delivers Superior value Design a Customer-driven Marketing strategy Understand The marketplace And customer needs And wants .

1. shelter. wants. safety. – Individual needs: • Learning. • Needs are states of felt deprivation. self-expression .Needs. – Physical needs: • Food. knowledge. and demands.• Understanding the marketplace and consumer needs: There are five core marketplace concepts. All humanity have the same needs. clothing. – Social needs: • Belonging. affection.

Example. wants. Example. Mercedes………. . • Wants. and demands. • Demands are wants combined with buying power.• Understanding the marketplace and consumer needs: There are five core marketplace concepts. are needs shaped by culture and individual personality. Marketers spends time and money for a market research to understand the customer‟s needs. A Chinese needs food but wants frog legs. Audi.

Services.• Understanding the marketplace and consumer needs: • • • • There are five core marketplace concepts. like theater. or experiences offered to a market to satisfy a need. tangible. Experiences consumer needs and wants are fulfilled through a marketing offer. telecom…etc. 2. like food. which is some combination of products. intangible.Products. Brand experiences. Services. services. Experiences. . banking. goods…etc. Products.

” • An article published by Harvard Business school defined the term “marketing Myopia”.Marketing myopia is true for all companies who define their markets too narrowly. . it has continued to grow as new targets are set . They focus on the “wants” and lose sight of the “needs.• Understanding the marketplace and consumer needs: Marketing Myopia • Sellers pay more attention to the specific products they offer than to the benefits and experiences produced by the products. . urging organizations to define their industries broadly to take advantage of growth opportunities. Experience shows that when a business has redefined its market.

. • If the performance and the customer‟s experience exceeds expectations. then customer satisfaction is low. then the customer is satisfied.• Understanding the marketplace and consumer needs: There are five core marketplace concepts.Value and Satisfaction • If the performance and the customer‟s experience is lower than expectations. then the customer is delighted. • If the performance and the customer‟s experience meets expectations. 3.

transactions. • Transaction . The goal of marketers is to build solid relationship with customers and retaining them by delivering superior value.• Understanding the marketplace and consumer needs: There are five core marketplace concepts. and relationships • Exchange.Exchange. .consists of a trade values between two parties. 4. – The act of obtaining a desired object from someone by offering something in return.

. both buyers and sellers are carried out by marketing. 5.• Understanding the marketplace and consumer needs: There are five core marketplace concepts. Sellers must search for buyers.Elements of a Modern Marketing systems .Markets The set of all actual and potential buyers of a product.

Elements of a Modern Marketing systems Company Supplier Competitors Marketing Intermediaries Final Consumers .

driven marketing strategy Once it fully understands consumers and the marketplace. • Divide markets into segments. • Building long-term customer relationships . Customer-Driven Marketing. • Offer a unique value proposition.• Designing a customer. • Choose the right segment to target. • Differentiate your offer from competitor offers. • Build customer value and satisfaction. marketing management can design a customer-driven marketing strategy.

_ What customers will we serve? (our target) _ How can we serve them best? ( Value) .driven marketing strategy Marketing Management The art and science of choosing target markets and building profitable relationships with them. Two questions should be asked here.• Designing a customer.

Second select the segment to be our target market. means the company must decide how it will differentiate itself from other competitors. Porsche promises driving performance and excitement. . • Deciding on a value proposition. first dividing the market into segments.• Designing a customer. Porsche company target customers with high income. They say” what a dog feels when the leash breaks”. A set of benefits or values it promises to deliver to consumers to satisfy their needs.driven marketing strategy Segmentation and Targeting Selecting customer to serve.

affordability and availability. 4.A philosophy should guide the marketing strategy to any company.promotion and hard selling. 5. 1. Product -.quality and innovation. Societal – long-term value to both customer and society. 2. 3. . Selling -. Marketing -. The philosophy could be one or more of the following.customer satisfaction and relationships. Production.

to gain market share.1. It’s effective strategy in two situations: -When a demand for a product exceeds the supply. Example. -When the product cost is too high.Production philosophy. it holds that consumers will favor products that are available and highly affordable. . McDonalds. Evian water. and improve productivity is needed to reduce the cost.

In this case the company should focus on the continuous improving..2. Motorola. holds that consumers will favor a products that offer the most in quality. performance. Examples. Sony. and innovative features.Product philosophy. . Nokia Mobile.

Selling philosophy.3. Holds that achieving organizational goals depends on knowing the needs and wants of target markets and deliver value to compete in the marketplace. but the right products for your customers. . Marriott. The job is not to find the right customers for your product. Example. Holds that the customer will not buy enough of the firm’s products unless it under-takes a largescale selling and promotion effort. Disney… Figure 3.Marketing philosophy. Dell. Life-Insurance 4.

company profits and consumer satisfaction Example. Balances human welfare. . and people before profit”. Johnson & Johnson Credo “ honesty. Figure 4 Many calls from the Healthy Associations warn people form the consequences results from Fast Food chains. integrity.5-Societal marketing philosophy.

Figure 3 Selling philosophy Starting point Focus Means Ends Existing Selling Factory products Promoting Profits Through Sales volume Marketing philosophy Customer Integrated Market needs Marketing Profits Through Customer Satisfaction .

Social Marketing philosophy Figure 4 Society (Human being) Consumers Want satisfaction Company (profits) .

Successful relationships are built on: – – – – – – Financial benefits.• Building Relationships Relationships span from the basic to tight integrated relationships. like tracking orders online. like member of clubs. Partner Relationship Marketing . Suppliers are carefully controlled through supply chain management. Airline frequent miles Social benefits. Strategic alliances create new opportunities to delight customers. Every department in an organization contributes to customer satisfaction. like VIP. magazines Structural ties.

electronics. 2. They view customers as an assets need to be maximized. many companies are increasing their variety of products and services to increase their profits form existing customers. beside books.share of market and share of customer . is the total combined customer lifetime values of all the company‟s customers. Figure 5 . 1.Customer loyalty and retention.• Outcomes of creating customer value.customer equity. toys. Amazon offer videos. and turn to be life-time value. delighted customers remain loyal and talk favorably to others about the company and its products. 3.

– Internet and e-commerce/e-business. • International trade is the new frontier. – Fast and global communications.New Marketing Technologies • Technology has changed how marketers build value. • Globalization • “Capitalism” . – Wireless technologies.

Ethics and Responsibility • Worldwide consumerism and environmentalism movements exert. . pressure for greater responsibility • Seeking ways to make a profit by serving the best long-run interests of customers and communities.