Principles of Marketing


Summary of Lecture-2

Road Map Understanding Marketing and Marketing Process Core Marketing Concepts

Core Marketing Concepts

Markets Wants





Today’s Topics

 

Marketing Functions

Customer Relationship Management

Marketing Functions

Costs and Functions of Marketing
On the average, 50% of all product costs can be traced directly to marketing What does the customer receive in exchange for the 50% marketing costs?



Risk Taking

Universal Marketing Marketing Functions Functions


Standardizing and Grading



Eight Universal Marketing Functions

1. Buying 2. Selling 3. Transporting 4. Storing
5. Standardizing and grading

6. Financing
7. Risk Taking 8. Securing Marketing Information

Marketing Management

Marketing management is “the art and science of choosing target markets and building profitable relationships with them.” Creating, delivering and communicating superior customer value is key.

…Marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but only to reduce or shift it.

Relationship Marketing
The process of establishing and maintaining mutually beneficial exchange relationships with customer and other stakeholders Two components: Customer Focus Competitive Advantage

Change In Perspective
Yesterday: Here is this great
product. Don’t you want to buy it? Can you make it?

Today: Here is what I need.

Direct Marketing Channels
Ways to market to your customers on a one-to-one basis – Face-to-face channels – Direct Mail – Catalog – Telemarketing – On-line marketing

Customer Focused Marketing
Basic Philosophy: – It is more profitable to keep loyal customers than to constantly be attracting new ones

Lifetime Value of a Customer
..the revenues and intangible benefits (referrals, customer feedback, etc.) that a customer brings to the seller over an average lifetime in the category, less the amount the company must spend to acquire, market to, and service the customer.

Customer Focused Marketing
How do I go about increasing the average lifetime value of my customers?
2. Identify your most valuable customers 3. Build a learning relationships with them so you can… 4. Provide a sustainable advantage over your competition (Create Value)

Customer Relationship Management

CRM – Customer relationship management . . .
“is the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.”

…the new view is that marketing is the science and art of finding, retaining, and growing profitable customers.

 It

costs 5 to 10 times MORE to attract a new customer than it does to keep a current customer satisfied. must be concerned with the lifetime value of the customer. building blocks: Customer value and Satisfaction

 Marketers

 Relationship

What is CRM?
Strategies focused on increasing customer satisfaction, loyalty, and profitability by leveraging superior customer knowledge acquired, stored, and acted upon with the aid of information technology

What are the goals of CRM?

The idea of CRM is that it helps businesses use technology to gain insight into the behavior of customers and the value of those customers. If it works as hoped, a business can: Provide better customer service Make call centers more efficient Help sales staff close deals faster Simplify marketing and sales processes Discover new customers

   

Value of Loyalty
Firms have realized the value of customer retention - Facts:  Winning a new customer is usually 510 times more costly than retaining an existing customer  Customers are usually more profitable the longer you keep them.  Why?

The Value of Loyalty Goes Beyond Single Customers

Loyal customers provide more and more credible referrals

But the angry gossip of disloyal customers can devastate a firm!

p o t s ’s re t e e h L t i


Marketing in Historical perspective and Evolution of Marketing

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