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Introduction to Marketing & Some Key Concepts Session 1

Introduction to

Marketing &

Some Key Concepts

Session 1

What is Marketing? o Marketing is managing profitable customer relationships by • Attracting new customers •

What is Marketing?

o

Marketing is managing profitable customer relationships by

Attracting new customers Retaining and growing current customers Reclaiming lost customers

o

‘Marketing’ is NOT synonymous with ‘sales’ or ‘advertising’

o

Kotler’s definition:

A process by which companies create value for customers and build strong

relationships to capture value from customers in return.

o

A simple Model of ‘Marketing Process’:

 

Create value for customers and

 

build customer relationships

   

Understand

marketplace,

Understand marketplace, Design a customer -driven Construct a marketing program Build profitable relationships and Capture value

Design a customer -driven

Understand marketplace, Design a customer -driven Construct a marketing program Build profitable relationships and Capture value

Construct a marketing program

Understand marketplace, Design a customer -driven Construct a marketing program Build profitable relationships and Capture value

Build profitable relationships and

Capture value from customers in return

and customer

marketing

that delivers

create customer

and customer marketing that delivers create customer

needs & wants

strategy

superior value

delight

Capture value from customers to create profits and customer

 

loyalty

Selling vs. Marketing A. MARKETING CONCEPT Starting Point Focus Means Ends Target Integrated Customer Market Marketing

Selling vs. Marketing

A. MARKETING CONCEPT

Starting Point Focus Means Ends Target Integrated Customer Market Marketing Needs Profit by Customer Satisfaction
Starting Point
Focus
Means
Ends
Target
Integrated
Customer
Market
Marketing
Needs
Profit by
Customer
Satisfaction

B. SELLING CONCEPT

Starting Point Focus Means Ends Factory Selling & Promoting Profit by Products Sales Revenue
Starting Point
Focus
Means
Ends
Factory
Selling &
Promoting
Profit by
Products
Sales
Revenue
Understanding marketplace, and customer needs & wants: Core Marketing Concepts o Needs (feeling), wants (form), and

Understanding marketplace, and customer needs & wants: Core Marketing Concepts

o Needs (feeling), wants (form), and demands (backed by buying power)

o Marketing offers goods, services and experiences to satisfy

o Customer Value and satisfaction (as per expectation)

o Exchange and relationships

Many Things Can Be Marketed!

o Goods o Services o Experiences o Events o Persons

o

Places

o

Properties

o

Organizations

o

Information

o

Ideas

o

Markets (a set of

actual buyer-seller)

Markets to Concentrate o Customer Markets o Referral Markets o Supplier Markets o Internal Markets

Markets to Concentrate

o Customer Markets o Referral Markets o Supplier Markets o Internal Markets

Designing a customer-driven marketing strategy: Marketing Management The art and science of choosing target markets and

Designing a customer-driven marketing

strategy: Marketing Management

The art and science of choosing target markets and

building profitable relationships with them.

o Selecting customers to serve o Choosing a value proposition to deliver o Management Orientations (Concepts)

Plan Evaluate Implement The Process
Plan
Evaluate
Implement
The Process
  • 1. The Production Concept: widely available products with low costs.

  • 2. The Product Concept: Quality, performance and innovative products.

  • 3. The Selling Concept: Aggressive selling & promotion effort

  • 4. The Marketing Concept: Determining needs & wants of target market, delivering desired satisfaction more effectively & efficiently than competitors

Preparing A Marketing Plan & Program MARKETING PLAN Situation Analysis Objectives Target Market Selection Feedback &

Preparing A Marketing Plan & Program

MARKETING PLAN

Preparing A Marketing Plan & Program MARKETING PLAN Situation Analysis Objectives Target Market Selection Feedback &

Situation Analysis

Preparing A Marketing Plan & Program MARKETING PLAN Situation Analysis Objectives Target Market Selection Feedback &

Objectives

Preparing A Marketing Plan & Program MARKETING PLAN Situation Analysis Objectives Target Market Selection Feedback &

Target Market Selection

Preparing A Marketing Plan & Program MARKETING PLAN Situation Analysis Objectives Target Market Selection Feedback &
Preparing A Marketing Plan & Program MARKETING PLAN Situation Analysis Objectives Target Market Selection Feedback &
Preparing A Marketing Plan & Program MARKETING PLAN Situation Analysis Objectives Target Market Selection Feedback &
Preparing A Marketing Plan & Program MARKETING PLAN Situation Analysis Objectives Target Market Selection Feedback &

Feedback & Modification

Marketing Strategy Pricing Promotion Distribution Strategy Strategy Strategy IMPLEMENTATION EVALUATION
Marketing Strategy
Pricing
Promotion
Distribution
Strategy
Strategy
Strategy
IMPLEMENTATION
EVALUATION

Product

Strategy

Building Customer Relationship The development and maintenance of long-term, cost- effective relationships with individual customers, suppliers,

Building Customer Relationship

The development and maintenance of long-term, cost-

effective relationships with individual customers,

suppliers, employees, and other partners, perhaps even with competitors, for mutual benefit.

Enhancing Retaining Satisfying Getting
Enhancing
Retaining
Satisfying
Getting

Goals of Relationship Marketing

To build & maintain a

base of committed

customers who are profitable for the Organization

Benefits of Relationship Marketing For Customers o Confidence Benefits Feelings of trust in provider, reduced anxiety,

Benefits of Relationship Marketing

For Customers o Confidence Benefits

Feelings of trust in provider, reduced anxiety, great comfort in knowing what to expect.

o Social Benefits

A sense of familiarity, social relationship with providers.

For Organization

o Increasing Sells o Free Advertising through word-of- mouth o Lower Costs o Employee Retention

o Special Treatment Benefits

Getting benefit of the doubt, a special deal or price, preferential treatment.

Transaction & Relationship Marketing Characteristic Focus Orientation Time Customer service priority Customer contact Quality concern Degree

Transaction & Relationship Marketing

Characteristic

Focus

Orientation

Time

Customer service priority

Customer contact

Quality concern

Degree of customer commitment

Transaction Marketing

Single-sell

Product feature

Short-term

Relatively low

Low to moderate

Moderate

Low

Relationship Marketing

Customer Retention

Product benefit

Long-term

Key component

Frequent

High

High

Customer Relationship Management o CRM is the overall process of building and maintaining profitable customer relationships

Customer Relationship Management

o CRM is the overall process of building and maintaining profitable customer relationships by delivering

superior customer value and satisfaction.

o Marketers must be concerned with the lifetime value of the customer.

o It costs 5 to 10 times MORE to attract a new customer than it does to keep a current customer satisfied.

CRM Key Concepts o Attracting, retaining and growing customers o Building customer relationships and customer equity

CRM

Key Concepts
Key Concepts

o Attracting, retaining and growing customers

o Building customer relationships and customer equity

o Customer value/satisfaction

Meeting (exceeding) expectations

creates satisfaction (Customer Delightness!)

Perceptions are key

oLoyalty and retention

Benefits of loyalty Loyalty increases with satisfaction levels Delighting consumers should be the goal

oGrowing share of customer

Cross-selling

CRM Key Concepts o Attracting, retaining and growing customers o Building customer relationships and customer equity

CRM

Key Concepts
Key Concepts

o Attracting, retaining and growing customers

o Building customer relationships and customer equity

o Customer relationship levels and tools

Target market typically dictates type of relationship

Basic relationships Full relationships

Customer loyalty and retention programs

Adding financial benefits Adding social benefits

o Customer equity

The total combined customer lifetime values of all customers.

Measures a firm’s performance, but in a manner that looks to the future.

Lifetime Value of a Customer Creates Life-time Revenue and thus the Profitability of the Customer to

Lifetime Value of a Customer

Creates Life-time Revenue and thus the Profitability of the Customer to the Organization.

o Length of average ‘lifetime’ o Average revenues generated per relevant time period over the lifetime o Sales of additional products/services over time o Referrals generated by the customer over time

Lifetime Value of a Customer: an example o If a 10- persons’ organization had Tk. 1,000

Lifetime Value of a Customer: an example

o If a 10-persons’ organization had Tk. 1,000 per month business for the organization, assuming 10 year lifetime for a customer,

the value of the customer to the organization will become:

Tk. 1,000/month X 12/year X 10 years = Tk. 120,000

o If the happy customer creates at least one new customer via word-of-mouth,

Tk. 120,000 X 2 new customers = Tk. 240,000

o If an average sales person serves 50 customers each day,

Tk. 240,000 X 50 Customers = Tk. 12,000,000

o Thus an average employee of the organization is managing a Tk. 12,000,000 portfolio of lifetime business for it.

Your Customers 1. Existing Customers 2. Potential Customers 3. Lost Customers “Lost Customer” Programs o Know

Your Customers

1. Existing Customers

2.Potential Customers

3. Lost Customers

“Lost Customer” Programs

o Know who the lost customers are o Find out why they left o Establish if the problem can be fixed

Apologize if its our own fault If the problem can be fixed, fix it

If can not, monitor the situation to see if:

Our own abilities change Customer’s preferences or personnel change

Retention Strategies Foundation to Retain: o Quality Offered in the Core Service o Careful Market Segmentation

Retention Strategies

Foundation to Retain:

o Quality Offered in the Core Service o Careful Market Segmentation & Targeting o Continuous Monitoring of Relationships

Customer is NOT Always Right All customer relationship may not be beneficial, and that every customer

Customer is NOT Always Right

All customer relationship may not be beneficial,

and that every customer is not right all the time:

o Customer from the Wrong Segment o If the customer is NOT Profitable in long-run

o If the customer is difficult to work with, placing stress on organization and its employees by:

Refusing to follow policies of organization Verbal/physical abuse of employees